Introduction January 10, 2019
|
|
- Ami Mosley
- 5 years ago
- Views:
Transcription
1 Introduction January 10, 2019 Michael Langemeier Department of Agricultural Economics Purdue University Purdue.edu/commercialag
2 White County Farms Enterprises Corn; 1,500 acres Soybeans; 1,500 acres Owned and Rented Acres Owned = 750 Rented = 2,250 Cash Rent = $245 per acre Land Values Beginning of 2018 = $7,774 per acre End of 2018 = $7,815 per acre
3 Financial Ratios Operating Profit Margin Ratio Measures the extent to which a business generates a profit from the use of land, labor, management, and capital. Computed by dividing net farm income plus interest expense minus unpaid family and operator labor by value of farm production. Asset Turnover Ratio Measures the intensity with which a business uses its assets to generate value of farm production. Computed by dividing value of farm production by average total assets.
4 Financial Ratios (continued) Capital Debt Repayment Margin Measures a farm s ability to repay operating loans and to cover the current portion of principal and interest due on noncurrent loans such machinery, building, and land loans. Computed by subtracting principal and interest on term debt, income and self-employment taxes, and family living expenses from the sum of accrual net farm income, off-farm income, and depreciation.
5 Financial Ratios (continued) Replacement Margin Measures a farm s ability to repay operating loans, to cover the current portion of principal and interest on noncurrent loans, and to replace machinery. Computed by subtracting cash used for capital replacement (e.g., depreciation times 1.15) from the capital debt repayment margin. For a farm to grow, the average long-run replacement margin has to be positive.
6 Operating Profit Margin Ratio West Central Indiana Case Farm Annual Average P 19P
7 Asset Turnover Ratio West Central Indiana Case Farm Annual Average P 19P
8 Capital Debt Repayment Margin West Central Indiana Case Farm $800,000 Annual Average $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 -$100,000 -$200, P 19P
9 Replacement Margin West Central Indiana Case Farm $700,000 Annual Average $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 -$100,000 -$200,000 -$300, P 19P
10 Checklist for Loan Renewal Most recent tax return and balance sheet List of all loans, include terms and payments Yield history for each crop produced Marketing plan for each crop produced Crop insurance documentation Projections and budgets for the upcoming year Net farm income Repayment capacity Working capital Enterprise costs and returns
11 Checklist for Loan Renewal (continued) Narrative that includes: Issues that you have recently encountered (e.g., personnel, machinery, storage, weather, etc.) Future goals Management structure and future changes Management succession plan
12 Focus of this Workshop Financial Analysis Use tax return and balance sheets to create accrual net farm income and compute financial ratios Examine repayment capacity Financial Projections Enterprise budgets Pro-forma financial statements Income statement Sources and uses of funds statement Repayment capacity Working capital
13 Financial Analysis January 10, 2019 Michael Langemeier Department of Agricultural Economics Purdue University
14 Case Farm File: White County Farms Market Value Balance Sheets, 2018 Notes for Market Value Balance Sheet, 2018 Schedule F, 2018 Repayment Capacity Measures, 2018
15 Balance Sheet 15
16 Beginning of Year BALANCE SHEET Assets Current $2,943,939 Noncurrent $7,403,296 Liabilities Current $567,538 Noncurrent $848,926 Equity $8,930,772 End of Year BALANCE SHEET Assets Current $3,073,558 Noncurrent $7,481,611 Liabilities Current $576,546 Noncurrent $915,832 Equity $9,062,790 Precise classification of assets & liabilities is important! Identifying reason(s) for equity change is also important!
17 Problems with Some Balance Sheets 1) Not completed the same time each year ü Seasonal changes in inventories make it important to complete balance sheet at the same time each year 2) Do not include notes or comments ü Difficult to figure out what prices were used to value inventories ü Difficult to analyze change in land values 3) Use tax rather than economic depreciation ü Using tax depreciation understates net farm income ü Benchmarks use economic depreciation rather than tax depreciation
18 Loan Structure: White County Farms 1) Operating Loan Balance outstanding at the end of the year 2) Machinery Loan Revolving loan on machinery Loan-to-value ratio for machinery is currently 28% 3) Land Loan Loan on 300 acres of cropland Current land loan balance is 21% of market value Has zero debt on another 450 acres
19 Current Assets Item 1/1/18 12/31/18 Cash 1,993,837 2,095,165 Fertilizer and Supplies 52,955 53,733 Investment in Growing Crops 0 0 Crops Held for Sale and Feed 897, ,660 Market Livestock 0 0 Total 2,943,939 3,073,558
20 Non-Current Assets Item 1/1/18 12/31/18 Breeding Livestock 0 0 Machinery and Equipment 1,480,910 1,533,069 Buildings 91,886 87,292 Land 5,830,500 5,861,250 Total 7,403,296 7,481,611
21 Current Liabilities Item 1/1/18 12/31/18 Accounts Payable 0 0 Notes Due within One Year 500, ,000 Current Portion of Term Debt 40,860 47,895 Accrued Interest 26,678 28,651 Total 567, ,546
22 Non-Current Liabilities Item 1/1/18 12/31/18 Notes Payable 355, ,928 Real Estate Debt 493, ,904 Total 848, ,832
23 Liquidity and Solvency White County Farms Current Ratio CR = (current assets / current liabilities) CR = 3,073,558 / 576,546 CR = 5.33 Solvency DTAR = (total liabilities / total assets) DTAR = 1,492,378 / 10,555,168 DTAR = Evaluation?
24 Schedule F 24
25 Schedule F Gross Income = $2,009,135 Total Expenses = $1,844,182 Net Farm Profit = $164,953 How is Net Farm Profit from a Schedule F related to Net Farm Income?
26 Problems with Schedule F 1) Ignores accrual adjustments Fertilizer and Supplies Investment in Growing Crops Crops Held for Sale and Feed Market Livestock Accrued Expenses 2) Tax depreciation is substantially different than economic depreciation 3) Operator and family labor is not included
27 Computing Accrual Net Farm Income 27
28 Using Schedule F and Balance Sheets to Compute Net Farm Income The next four slides use information from the Schedule F and balance sheets for White County Farms to compute: Gross Revenue Operating Expense Interest Expense EBITA Net Farm Income Purdue Farm Financial Performance Spreadsheet
29 Computation of Gross Revenue Item Source Operation Amount Cost of Livestock Sold Schedule F 0 Gross Income Schedule F + 2,009,135 Breeding Livestock Sales Form Change in Current Assets (exclude cash, supplies, and prepaid expenses) Balance Sheet (E-B) + 27,513 Gross Revenue = 2,036,648
30 Computation of Operating Expense Item Source Operation Amount Cost of Livestock Sold F 0 Total Expenses F + 1,844,182 Depreciation F - 167,966 Mortgage Interest F - 53,355 Other Interest Paid F - 33,807 Change in Accounts Payable Change in Prepaid Expenses BS (E-B) + 0 BS (E-B) Operating Expense = 1,588,276
31 Computation of Interest Expense Item Source Operation Amount Mortgage Interest F 53,355 Other Interest Paid F + 33,807 Change in Accrued Interest BS (E-B) + 1,973 Interest Expense = 89,135
32 Computation of EBITA and Net Farm Income Item Operation Amount Gross Revenue 2,036,648 Operating Expense - 1,588,276 EBITA = 448,372 EBITA 448,372 Interest Expense - 89,135 Depreciation (exclude section 179 expense) - 167,966 Net Farm Income = 191,271
33 Net Farm Income Uses Along with off-farm income, net farm income is used to pay income and self-employment taxes Net farm income is used to make principal payments on term debt Net farm income is used to replace machinery and buildings, and for expansion As a rule of thumb, a farm needs approximately 110 to 120% of depreciation to replace machinery and buildings
34 Miscellaneous Information Item Amount Principal on Term Debt 40,860 Cash Used for Capital Replacement 193,161 Off-Farm Income 0 Income and Self-Employment Taxes 0 Family Living Expenses 90,000
35 Repayment Capacity 35
36 Capital Debt Repayment Margin Net Farm Income plus Net Off-Farm Income plus Depreciation minus Owner Withdrawals minus Principal on Term Debt minus Unpaid Operating Debt from Prior Period equals Capital Debt Repayment Margin
37 Capital Debt Repayment Margin Why is this margin so important? It clearly illustrates that net farm income, net off-farm income, and depreciation have to be large enough to cover owner withdrawals and principal on term debt Positive margin is needed to replace machinery and grow the business
38 Item Capital Debt Repayment Capacity White County Farms Net Farm Income (1) 191,271 Off-Farm Income (2) 0 Income and Self-Employment Taxes (3) 0 Interest Expense on Term Debt (4) 55,329 Depreciation (5) 167,966 Family Living Expenses (6) 90,000 Capital Debt Repayment Capacity {( )-6} 324,566
39 Capital Debt Repayment Margin and Replacement Margin Item White County Farms Capital Debt Repayment Capacity (7) 324,566 Principal on Term Debts and Capital Leases (8) 40,860 Unpaid Operating Debt from Prior Period (9) 0 Capital Debt Repayment Margin (7-(4+8+9)}; ,377 Cash Used for Capital Replacement (11) 193,161 Replacement Margin {10-11} 35,216
40 Repayment Capacity for White County Farms What does the capital debt repayment margin and replacement margin tell us about the repayment capacity of White County Farms? Does White County Farms have the capacity to repay debt? Does White County Farms have the capacity to replace machinery and buildings? Does White County Farms have the capacity to expand?
41 EC-712-W Measuring and Analyzing Farm Financial Performance 41
42 EC-712-W Spreadsheet Enter Schedule F and balance sheet information Outputs: Financial Ratios Repayment Capacity Sensitivity Analysis Breakeven Gross Revenue
43 Financial Projections January 10, 2019 Michael Langemeier Department of Agricultural Economics Purdue University
44 Enterprise Analysis 44
45 Introduction An enterprise budget is an organization of revenue, expenses, and net return for a single enterprise. Uses: Identify bottlenecks to profitability Identify the more profitable enterprises to be included in a whole-farm plan
46 Opportunity Cost The income that could be received by employing a resource in its most profitable alternative. Examples: Unpaid operator labor Interest charge on owned assets
47 Opportunity Cost of Management Often omitted from enterprise budgets. Opportunity charges on operator labor and owned assets are typically included. If no opportunity cost for management is shown in the budget, the estimated profit or earnings should be interpreted as estimated net return to management.
48 Organization Gross Revenue (GR) Variable Costs (VC) Contribution Margin (CM) Overhead Costs (OC) Earnings
49 Gross Revenue (GR) Crop Revenue Government Payments Crop Insurance Indemnity Payments Miscellaneous Revenue
50 Variable Costs (VC) Fertilizer Seed Pesticides Dryer fuel Machinery fuel Machinery repairs Hauling Interest Insurance and miscellaneous
51 Contribution Margin (CM) Definition CM = GR - VC Interpretation For a farm to produce in the short-run, it needs to be able to cover all variable costs. A positive contribution margin, however, does not ensure that the farm is earning an economic profit.
52 Fixed or Overhead Costs (OC) Machinery Ownership Labor Land
53 Earnings Definition Earnings = GR VC OC Earnings = CM - OC Interpretation For a farm to produce in the long-run, it needs to cover all costs (i.e., earnings are greater than or equal to zero).
54 Long-Run Cash Rent Spreadsheet 2019 Crop Budgets Corn/Soybean Rotation High Productivity Soil Percent of Acres Included in Analysis = 25% Outputs: Projected Earnings Breakeven Rents Working Capital Analysis
55 Pro-Forma Financial Statements 55
56 Pro-Forma Financial Statements Historical financial statements are often the starting point for developing a financial plan. Pro-forma financial statements can be used in conjunction with capital budgeting to examine the feasibility of expansion or the purchase of a major asset.
57 Pro-Forma Financial Statements To achieve goals, changes to the operation and/or farm growth are often necessary. Review strengths, weaknesses, opportunities, and threats Consider alternatives: Change enterprises Add value Restructure debt Increase farm size
58 Pro-Forma Financial Statements Sensitivity Analysis Analyzing how changes in key assumptions affect income, cost, and profitability objectives. Construct several financial plans using different values for production levels, key prices, and interest rates.
59 Pro-Forma Financial Statements Most Likely Scenario Planning Model Examine impact of most likely scenario on financial statements. Use sensitivity analysis to vary the assumptions made in the financial plan. Revenue assumptions Cost assumptions
60 Pro-Forma Financial Statements Spreadsheet Inputs Inventories and Financing Crop Acres Crop Income Other Income Expenses Tax Estimate Non-Farm
61 Pro-Forma Financial Statements Spreadsheet (continued) Outputs Income Statement Sources and Uses of Funds Statement Repayment Capacity Working Capital
62 Pro-Forma Spreadsheet Base Case Crop Prices and Yields Rotation Corn: Fall Crop Sales = $3.77 Ending Inventory = $3.78 Crop Yield = Rotation Soybeans: Fall Crop Sales = $9.25 Ending Inventory = $9.30 Crop Yield = 56.0
63 Pro-Forma Spreadsheet Crop Yield Scenarios 10% Lower 5% Lower Base Case 5% Higher 10% Higher
64 Crop Yield Scenarios Financial Metric 10% Lower 5% Lower Base Case 5% Higher 10% Higher Net Farm Income Profit Margin Ratio Working Cap. per Crop Acre (2018=$832) -$202,507 -$111,173 -$19,840 $71,493 $162, % -6.2% -0.9% 3.9% 8.2% $776 $791 $806 $822 $837 Capital Debt Repayment Margin -$167,662 -$76,328 $15,005 $106,338 $197,671
65 Key Points Pro-forma financial statements are useful in forecasting profitability, net cash flow, repayment capacity, and changes in working capital. Pro-forma financial statements should be used to gauge whether net cash flow is strong enough to purchase additional assets.
Measuring Risk and Uncertainty Michael Langemeier, Associate Director, Center for Commercial Agriculture
February 2015 Measuring Risk and Uncertainty Michael Langemeier, Associate Director, Center for Commercial Agriculture This article is the second in a series of articles pertaining to risk and uncertainty.
More informationRevenue and Costs for Illinois Grain Crops, Actual for 2012 through 2017, Projected 2018 and 2019
CROP COSTS Department of Agricultural and Consumer Economics University of Illinois Revenue and Costs for Illinois Grain Crops, Actual for 2012 through 2017, Projected 2018 and 2019 Department of Agricultural
More informationRevenue and Costs for Corn, Soybeans, Wheat, and Double-Crop Soybeans, Actual for 2011 through 2016, Projected 2017 and 2018
CROP COSTS Department of Agricultural and Consumer Economics University of Illinois Revenue and Costs for Corn, Soybeans, Wheat, and Double-Crop Soybeans, Actual for 2011 through 2016, Projected 2017 and
More informationFinancial Planning and Cash Flow Budgeting for 2006
Financial Planning and Cash Flow Budgeting for 2006 Hands-on Applications By Paul Ellinger and Bruce Sherrick Outline FAST Tools overview Benefits of financial planning Components of financial plan Getting
More informationBalance Sheet-A Financial Management Tool
Balance Sheet-A Financial Management Tool Robin Reid (robinreid@ksu.edu) and Kevin Herbel (kherbel@ksu.edu) Revision of MF-291 by Dr. Michael Langemeier Kansas State University Department of Agricultural
More informationFarm Income Statement 2015 Moorhead Farm Business Management Annual Report (Farms Sorted By Net Farm Income) Number of farms
Farm Income Statement Cash Farm Income Barley 5,929 2,010 - - 12,581 14,753 Beans, Black Turtle 350 - - - - 1,723 Beans, Navy 3,627 13,512 - - 5,385 - Corn 168,160 172,777 84,655 79,253 289,902 214,568
More informationIncome Statement-A Financial Management Tool
Income Statement-A Financial Management Tool Robin Reid (robinreid@ksu.edu) and Kevin Herbel (kherbel@ksu.edu) Revision of MF-294 by Dr. Michael Langemeier Kansas State University Department of Agricultural
More informationCost Concepts Key Questions Chapter 9, pp
Cost Concepts Key Questions Chapter 9, pp. 137-141 How do operating and ownership costs differ? How are ownership costs calculated? In the short run? In the long run? How do cash and noncash costs differ?
More information2000 Sole Proprietor Financial Summary
2000 Sole Proprietor Financial Summary KENTUCKY FARM BUSINESS MANAGEMENT PROGRAM Agricultural Economics Extension No. 2001-16 December 2001 By: GREGG IBENDAHL University of Kentucky Department of Agricultural
More informationWelcome to a brief discussion of income statements. The income statement is a critical record-keeping tool in evaluating the profitability of your
Welcome to a brief discussion of income statements. The income statement is a critical record-keeping tool in evaluating the profitability of your business. As with the other statements, you may choose
More informationThe Farm Safety Net: The Good and Not So Good Michael Boehlje and Michael Langemeier Center for Commercial Agriculture Purdue University
The Farm Safety Net: The Good and Not So Good Michael Boehlje and Michael Langemeier Center for Commercial Agriculture Purdue University USDA recently announced that they project net farm income to decline
More informationDairy Grazing Farms in Michigan, Sherrill B. Nott. Staff Paper # October, 2002
Staff Paper Dairy Grazing Farms in Michigan, 2001 by Sherrill B. Nott Staff Paper #2002-30 October, 2002 Copyright: 2002 by Sherrill B. Nott. All rights reserved. Readers may make verbatim copies of this
More informationPLANNING FOR YOUR AGRIPRENEURSHIP BUSINESS
PLANNING FOR YOUR AGRIPRENEURSHIP BUSINESS 1 Creating a basic business plan: Understanding your financials Introduction: Welcome to How to Write Your Business Plan 101! As agricultural entrepreneurs, or
More informationFarm Financial Management Case: Mayer Farm 2013
Farm Financial Management Case: Mayer Farm 2013 The Mayer Farm Case is provided to you as an alternative to using your own financial data. Using the Mayer Farm Case data you can complete the following
More informationFall 2017 Crop Outlook Webinar
Fall 2017 Crop Outlook Webinar Chris Hurt, Professor & Extension Ag. Economist James Mintert, Professor & Director, Center for Commercial Agriculture Fall 2017 Crop Outlook Webinar October 13, 2017 50%
More informationEvaluating the Financial Viability of the Business
Evaluating the Financial Viability of the Business Just as it is important to construct a new building on a strong foundation, it is important to build the economic future of your business on a sound financial
More information2009 Michigan Upper Peninsula Dairy Business Analysis Summary. Eric Wittenberg And Christopher Wolf. Staff Paper December, 2010
2009 Michigan Upper Peninsula Dairy Business Analysis Summary Eric Wittenberg And Christopher Wolf Staff Paper 2010-08 December, 2010 Department of Agricultural, Food, and Resource Economics MICHIGAN STATE
More information2010 Michigan Upper Peninsula Dairy Business Analysis Summary. Eric Wittenberg And Christopher Wolf. Staff Paper December, 2011
2010 Michigan Upper Peninsula Dairy Business Analysis Summary Eric Wittenberg And Christopher Wolf Staff Paper 2011-12 December, 2011 Department of Agricultural, Food, and Resource Economics MICHIGAN STATE
More informationIncome Statement. Are you making a profit? Income Statement Adjustments
The Farm Financial Standards Committee recommends four measures of profitability: 1. Net Farm Income 2. ROA 3. ROE 4. OPMR Income Statement Are you making a profit? The income statement is used to determine
More informationAVERAGE GRAIN FARMER 5/18/2018 KENTUCKY BUSINESS FARM ANALYSIS BALANCE SHEET For Year Ending December 31, 2017
BALANCE SHEET Current Assets Current Liabilities Bank Balance 89,593 Accounts Payable with Merchants & Dealers 37,635 Savings & CD's 58,735 Lease Payment 6,706 Hedging Account Balance 5,836 Feed Accounts
More informationCROP BUDGETS, ILLINOIS, 2017
CROP BUDGETS Department of Agricultural and Consumer Economics University of Illinois CROP BUDGETS, ILLINOIS, 2017 Department of Agricultural and Consumer Economics University of Illinois July 2017 Introduction
More informationCROP BUDGETS, ILLINOIS, 2019
CROP BUDGETS Department of Agricultural and Consumer Economics University of Illinois CROP BUDGETS, ILLINOIS, 2019 Department of Agricultural and Consumer Economics University of Illinois September 2018
More informationCROP BUDGETS, ILLINOIS, 2018
CROP BUDGETS Department of Agricultural and Consumer Economics University of Illinois CROP BUDGETS, ILLINOIS, 2018 Department of Agricultural and Consumer Economics University of Illinois February 2018
More informationA B C D E F G H I Dairy Code: XXX Dairy Business Analysis Project version 8/19/2002 Page 1 Dairy Description /16/2002
1 1 1 1 0 1 0 1 A B C D E F G H I Dairy Code: XXX Dairy Business Analysis Project version /1/00 Page 1 Dairy Description 001 /1/00 Milk Production Prod. Record. System Milking System Milking Frequency
More informationFAST Tools Planning Beyond Paul Ellinger and Travis Farley Department of Agricultural and Consumer Economics University of Illinois
FAST Tools Planning Beyond 2008 Paul Ellinger and Travis Farley Department of Agricultural and Consumer Economics University of Illinois Executive Summary FAST Tools are a set of spreadsheet-based computer
More informationUnderstand Financial Statements and Identify Sources of Farm Financial Risk
Agricultural Finance Understand Financial Statements and Identify Sources of Farm Financial Risk By analyzing a complete set of your farm s financial statements you can identify sources and amounts of
More information2005 Michigan Feeder Steers Business Analysis Summary. Eric Wittenberg and Roy Black. Staff Paper December, 2006
2005 Michigan Feeder Steers Business Analysis Summary Eric Wittenberg and Roy Black Staff Paper 2006-31 December, 2006 Department of Agricultural Economics MICHIGAN STATE UNIVERSITY East Lansing, Michigan
More informationFarm Financial Risk Management: Introduction to Farm Financial Statements for New and Beginning Farmers
Farm Financial Risk Management: Introduction to Farm Financial Statements for New and Beginning Farmers Kim Morgan, Assistant Professor, Agricultural and Applied Economics, Virginia Tech; Peter Callan,
More information2006 Michigan Cash Grain Farm Business Analysis Summary. Eric Wittenberg And Stephen Harsh. Staff Paper December, 2007
2006 Michigan Cash Grain Farm Business Analysis Summary Eric Wittenberg And Stephen Harsh Staff Paper 2007-11 December, 2007 Department of Agricultural Economics MICHIGAN STATE UNIVERSITY East Lansing,
More informationFarm Business Analysis Ch.18
Farm Business Analysis Ch.18 What are the strengths and weaknesses of the farm business? How can we measure how well the farm is doing? Which farm would you prefer? Farm A Net worth $400,000 Total acres
More informationChapter 11- Analizing Quicken Farm Records with FINPAK Chapter 11- Analyzing Quicken Farm Records with FINPACK
Chapter 11- Analyzing Quicken Farm Records with FINPACK FINPACK is a computerized farm financial planning and analysis system. It will help you evaluate your financial situation, explore alternatives,
More informationODAP-S. Ontario Data Analysis Project - Swine FARM SUMMARY. For 2002 Tax Year. Prepared by: Lynn Marchand. Economics and Business Section
ODAP-S Ontario Data Analysis Project - Swine FARM SUMMARY For 22 Tax Year Prepared by: Lynn Marchand Economics and Business Section RIDGETOWN COLLEGE, UNIVERSITY OF GUELPH DECEMBER 23 TABLE OF CONTENTS
More informationEvaluating the New Century Go-Go Farmer
Evaluating the New Century Go-Go Farmer Bob Craven Center for Farm Financial Management University of Minnesota 612-625-6701 rcraven@umn.edu www.cffm.umn.edu www.finbin.umn.edu Data providers: MNSCU Farm
More informationAgricultural Accounting
Agricultural Accounting Steven M. Bragg Chapter 1 Introduction to Agricultural Accounting... 1 Learning Objectives... 1 Introduction... 1 A Note on Terminology... 1 The Economic Entity Concept... 1 Financial
More informationFinancial Ratios Used in Financial Management
Financial Ratios Used in Financial Management Robin Reid (robinreid@ksu.edu) and Kevin Herbel (kherbel@ksu.edu) Revision of MF-270 by Dr. Michael Langemeier Kansas State University Department of Agricultural
More informationAEC 851 BUDGETING ACTIVITY ANALYSIS INTRODUCTION TO BUDGETING AND
AEC 851 BUDGETING ACTIVITY ANALYSIS INTRODUCTION TO BUDGETING AND ACTIVITY ANALYSIS P Concepts presented are not complex but important to operations management < A logical way of organizing information
More informationCurrent assets include cash, bank accounts, crops, livestock, and supplies that will normally be sold or used within a year.
Farm Financial Management Your Net Worth Statement Would you like to know more about the current financial situation of your farming operation? A simple listing of the property you own and the debts you
More informationFinance Implications of Intergenerational Transfer of US Farms. Freddie Barnard and Elizabeth Yeager. Introduction
Finance Implications of Intergenerational Transfer of US Farms Freddie Barnard and Elizabeth Yeager Introduction Background The intergenerational transfer of capital assets can be accomplished through
More informationFRUIT FARM BUSINESS SUMMARY LAKE ONTARIO REGION NEW YORK October 2009 E.B Gerald B. White Alison M. DeMarree James Neyhard
BUSINESS SUMMARY FRUIT FARM October 2009 E.B. 2009-19 LAKE ONTARIO REGION NEW YORK 2008 Gerald B. White Alison M. DeMarree James Neyhard Department of Applied Economics and Management College of Agriculture
More informationFRUIT FARM BUSINESS SUMMARY LAKE ONTARIO REGION NEW YORK October 2007 E.B Gerald B. White Alison M. DeMarree James Neyhard
October 2007 E.B. 2007-15 FRUIT FARM BUSINESS SUMMARY LAKE ONTARIO REGION NEW YORK 2006 Gerald B. White Alison M. DeMarree James Neyhard Department of Applied Economics and Management College of Agriculture
More informationSTANDARDIZED PERFORMANCE ANALYSIS
STANDARDIZED PERFORMANCE ANALYSIS SPA-6 COW-CALF ENTERPRISE FINANCIAL PERFORMANCE MEASURES WORKSHEET (SPA-FCC) * 6-16-06 SPA is a standardized cow-calf enterprise production and financial performance analysis
More informationThe Cash Flow Statement
The Cash Flow Statement This statement is also known as the Statement of Changes in Financial Position Statement of Changes in Financial Position A statement of changes in financial position reports the
More informationDairy Proforma Calculator (DPC) Instructions Gary G. Frank, Center for Dairy Profitability, UW-Madison August 1, 1998
Dairy Proforma Calculator (DPC) Instructions Gary G. Frank, Center for Dairy Profitability, UW-Madison August 1, 1998 When loading DPC and this message appears, click the No button. Worksheet Appearance
More information2002 Michigan Dairy Farm Business Analysis Summary. Staff Paper No November Eric Wittenberg and Christopher Wolf
2002 Michigan Dairy Farm Business Analysis Summary Staff Paper No. 03-14 November 2003 by Eric Wittenberg and Christopher Wolf Copyright 2003 by Eric Wittenberg and Christopher Wolf. Readers may make verbatim
More informationAgriculture & Business Management Notes...
Agriculture & Business Management Notes... Partial Budgeting Quick Notes... By employing budget principles, a manager can compare costs and returns of alternative plans for a farm or ranch. A partial budget
More informationWhole-Farm Reports. Farm Income Statement
Whole-Farm Reports The whole-farm reports summarize the financial performance of FBMA member farms in 2005. Each table includes the average of the 97 farms included in the report and the average of four
More informationMaking Your 2017 Crop Insurance Decisions
Making Your 2017 Crop Insurance Decisions Michael Langemeier, Professor & Associate Director James Mintert, Professor & Director Purdue Center for Commercial Agriculture $850 $800 $750 $700 $650 $600 $550
More informationProfitability is the primary goal of all business
Understanding Profitability File C3-24 December 2009 www.extension.iastate.edu/agdm Profitability is the primary goal of all business ventures. Without profitability the business will not survive in the
More informationYear End Balance Beginning Balance 12/31/2015 1/1/2015 Crops and Feed Hay 0 0 Silage 0 0 Grain 0 0
Page 1 Year End Balance Beginning Balance 12/31/2015 1/1/2015 Crops and Feed Hay Silage Grain Livestock Held for Sale Steers Accounts Receivable Rusty's Restaurant 0 600 Total 0 600 Other Inventory Ground
More informationDeveloping a Cash Flow Plan
Developing a Cash Flow Plan Oklahoma Cooperative Extension Service Division of Agricultural Sciences and Natural Resources F-751 Damona G. Doye Extension Economist and Professor Acash flow plan is a recorded
More informationFile: Organic_Dairy_Transition User: Tim Beck, Penn State Cooperative Extension FINPACK Printed 11/05/2007 3:18:10 PM
Organic_Dairy_Transition FINLRB: Options File: Organic_Dairy_Transition User: Tim Beck, FINPACK Printed 11/05/2007 3:18:10 PM PLAN DESCRIPTION Buy Corn $25 Milk $27 Milk $29 Milk Organic Total crop acres
More informationIn this section of our overall farm management educational series we focus on evaluating farm financial performance, or figuring out how we are doing
In this section of our overall farm management educational series we focus on evaluating farm financial performance, or figuring out how we are doing financially. This is important because often indicators
More informationMANAGING THE RISK CAPTURING THE OPPORTUNITY IN CROP FARMING. Michael Boehlje and Brent Gloy Center for Commercial Agriculture Purdue University
MANAGING THE RISK CAPTURING THE OPPORTUNITY IN CROP FARMING by Michael Boehlje and Brent Gloy Center for Commercial Agriculture Purdue University Farming has always been a risky business with the returns
More informationManagerial Accounting Using QuickBooks Pro TM
Managerial Accounting Using QuickBooks Pro TM This manual is intended as a reference in furthering knowledge of management accounting for agricultural producers using QuickBooks Pro TM. Historically, agricultural
More information2017 MN State Farm Business Management Exam MULTIPLE CHOICE (Score 2 points per question)
2017 MN State Farm Business Management Exam MULTIPLE CHOICE (Score 2 points per question) Select the most correct answer and bubble it in on your scantron. 1. When local basis increases, it is an indication
More informationWelcome to a brief discussion of balance sheets. The balance sheet is a summary of the things owned and owed by a business. You may choose whether it
Welcome to a brief discussion of balance sheets. The balance sheet is a summary of the things owned and owed by a business. You may choose whether it focuses on the business only or is a combined personal
More informationSession 5: Financial Management
Session 5: Financial Management Session 4: Enterprise Budget Develop enterprise budget Decide on Production System How did they decide on pricing Where will they market Fixed cost Revenue = Price X Quantity
More informationInvestment Analysis and Project Assessment
Strategic Business Planning for Commercial Producers Investment Analysis and Project Assessment Michael Boehlje and Cole Ehmke Center for Food and Agricultural Business Purdue University Capital investment
More informationBalance Sheet and Schedules
Balance Sheet and Schedules CURRENT ASSET SCHEDULE DOLLAR VALUE CASH AND EQUIVALENTS A $ MARKETABLE EQUITIES B $ ACCOUNTS RECEIVABLE C $ MARKET LIVESTOCK $ PRODUCE OR BY-PRODUCTS $ CROP INVENTORY D $ CROP
More informationFarm Enterprise Budgeting: Should I Grow Corn, Convert to Pasture
Farm Enterprise Budgeting: Should I Grow Corn, Convert to Pasture or? Paul Dietmann, Emerging Markets Specialist Badgerland Financial Paul.dietmann@badgerlandfinancial.com WI Land + Water Conservation
More informationBalancing Business and Financial Risk Michael Langemeier, Associate Director, Center for Commercial Agriculture
July 2014 Balancing Business and Financial Risk Michael Langemeier, Associate Director, Center for Commercial Agriculture This article is one of a series of financial management articles that will examine
More informationFinance 411. Presented By: Dawn Edmonds & Angela Barsuglia
Finance 411 Presented By: Dawn Edmonds & Angela Barsuglia Finance 411 What is Farm Credit East and what services does it provide? A non-depository farm bank Operating, Capital, and Farm Ownership Loans
More informationCredit Analysis Solutions COMMERCIAL
Credit Analysis Solutions COMMERCIAL FINPACK 130 Ruttan Hall 1994 Buford Avenue St. Paul, Minnesota 55108 Phone: (612) 625-1964 Toll-Free: (800) 234-1111 Fax: (612) 625-3105 Email: FINPACK@umn.edu Online:
More informationSECTION B: SUMMARIZATION AND ANALYSIS Page B-1
SECTION B: SUMMARIZATION AND ANALYSIS Page B-1 This section of the Oklahoma Farm and Ranch Account Book provides for the summarization and analysis of the farm or ranch s financial and production data
More informationSix Year Trend Analysis New York State Dairy Farms Selected Financial and Production Factors
January 2018 EB 2018 01 Six Year Trend Analysis New York State Dairy Farms Selected Financial and Production Factors Dairy Farm Business Summary New York State Same 138 Farms 2011 2016 Jason Karszes Kayla
More informationAgricultural Economy in Southern Minnesota PAUL LANOUE
Agricultural Economy in Southern Minnesota PAUL LANOUE DEAN OF MANAGEMENT MINNESOTA WEST Where are we at? Variability Yields Weather Financial health Commodities Land Ownership Debt load Tax planning 2015
More informationExecutive Women in Agriculture
Executive Women in Agriculture FINANCIAL STATEMENT FUNDAMENTALS Understanding what your lender needs 1 OR How can this benefit me? What does 2014 have in store? Lower commodity prices Increasing input
More informationACCRUED INCOME STATEMENT
Iowa Farm Business Association ACCRUED INCOME STATEMENT IOWA STATEWIDE Page: 1 Size 1 Avg Size 2 Avg Size 3 Avg Size 4 Avg Size 5 Avg Group Avg 144 Farms 109 Farms 188 Farms 219 Farms Farms 72 Farms 101
More informationGrassfed Beef Ranch QuickBooks Setup Accounts
Grassfed Beef Ranch QuickBooks Setup Accounts The business accounting system first must provide the data for compliance reporting following the expense accounts in the Internal Revenue (IRS) Tax Profit
More information2014 Iowa Farm Business Management Career Development Event. INDIVIDUAL EXAM (150 pts.)
2014 Iowa Farm Business Management Career Development Event INDIVIDUAL EXAM (150 pts.) Select the best answer to each of the 75 questions to follow (2 pts. ea.). Code your answers on the answer sheet provided.
More informationEnding Balance Sheet Page 13 of 21
Farm Name Ending Balance Sheet Page 13 of 21 Current Assets Ending Balance Sheet Date: / / 201 Schedule A: Cash, Savings, and Checking Farm cash, checking and savings account balances as of the balance
More informationAGRICULTURAL BUSINESS AND ECONOMICS AG
Student's Name AGRICULTURAL BUSINESS AND ECONOMICS AG 0660 Directions: Rating Scale: Evaluate the trainee using the rating scale below and check the appropriate number to indicate the degree of competency
More informationSix Year Trend Analysis New York State Dairy Farms Selected Financial and Production Factors
January 2018 EB 2018 08 Six Year Trend Analysis New York State Dairy Farms Selected Financial and Production Factors Dairy Farm Business Summary New York State Same 128 Farms 2012 2017 Jason Karszes Dyson
More informationOlericulture Hort 320 Lesson 10, Enterprise Budgets
Olericulture Hort 320 Lesson 10, Enterprise Budgets Jeremy S. Cowan WSU Spokane County Extension 222 N. Havana St. Spokane, WA 99202 Phone: 509-477-2145 Fax: 509-477-2087 Email: jeremy.cowan@wsu.edu Purpose
More informationDeveloping a Cash Flow Plan
Oklahoma Cooperative Extension Service AGEC-751 Developing a Cash Flow Plan Damona G. Doye Extension Economist and Professor A cash flow plan is a recorded projection of the amount and timing of all cash
More information2017 NATIONAL FFA FARM AND AGRIBUSINESS MANAGEMENT CAREER DEVELOPMENT EVENT
Participant s Name (please print clearly). Important: Before you start this portion of the event, please write your participant number and state abbreviation on the blanks provided at the top of each page.
More informationMark Dikeman Associate Director KFMA
Mark Dikeman Associate Director KFMA Tedious requires attention to detail Complex some knowledge of accounting (and farm accounting) is needed Time consuming when more than tax records are needed A valuable
More informationEnterprise Budgets. How is it constructed?
Enterprise Budgets An enterprise budget is an estimate of projected income and expenses associated with the production of a commodity. Most agricultural operations are made up of a combination of several
More informationCredit Analysis Solutions AGRICULTURE
Credit Analysis Solutions AGRICULTURE University of Minnesota 130 Ruttan Hall 1994 Buford Avenue St. Paul, Minnesota 55108 Phone: (612) 625-1964 Toll-Free: (800) 234-1111 Fax: (612) 625-3105 Email: FINPACK@umn.edu
More informationODAP-S. Ontario Data Analysis Project - Swine FARM SUMMARY. For 2003 Tax Year. Prepared by: Lynn Marchand. Economics and Business Section
ODAP-S Ontario Data Analysis Project - Swine FARM SUMMARY For 2003 Tax Year Prepared by: Lynn Marchand Economics and Business Section RIDGETOWN COLLEGE, UNIVERSITY OF GUELPH DECEMBER 2004 TABLE OF CONTENTS
More informationEconomics 330 Name Fall 2004 Exam 1 PART I. Multiple Choice. Indicate the best answer. (3 points each)
Economics 330 Fall 2004 Exam 1 Name PART I. Multiple Choice. Indicate the best answer. (3 points each) 1. We discussed the aspect of establishing S.M.A.R.T. goals. Examples of S.M.A.R.T. goals would include:
More informationSession Objectives. The Balance Sheet. Basic Financial Framework Business Abilities & Financial Statements 11/23/2015
Session Objectives Introduction to Financial Statement Learn the 5 essential financial statements necessary for planning and monitoring farm profitability. Chris Bruynis, Assistant Professor & Extension
More informationDairy Business Analysis Project: 2005 Summary for Florida and Georgia Dairies
Dairy Business Analysis Project: 005 Summary for Florida and Georgia Dairies R. Giesy, L. Ely, B. Broaddus, C. Vann, A. Bell, and A. De Vries Introduction The Dairy Business Analysis Project (DBAP) was
More information2.1. A Brief History of Our Farm Operation
.1 A Brief History of Our Farm Operation Write a brief history describing the important events and decisions in your life and operation.why did you make the choices you did? What have been the most important
More informationPrepare, print, and e-file your federal tax return for free!
Prepare, print, and e-file your federal tax return for free! www.freetaxusa.com SCHEDULE F (Form 1040) Department of the Treasury Internal Revenue Service (99) Name of proprietor Profit or Loss From Farming
More informationA Financial Analysis Program That Will PASS the Farm Manager Interest Test
A Financial Analysis Program That Will PASS the Farm Manager Interest Test By Christine Wilson, Freddie Barnard, and Michael Boehlje Abstract This paper discusses a farm financial analysis program, along
More informationDairy Business Analysis Project: 2007 Financial Summary 1
AN23 Dairy Business Analysis Project: 2007 Financial Summary A. De Vries, R. Giesy, M. Sowerby, and L. Ely 2 Introduction The Dairy Business Analysis Project (DBAP) was initiated in 996 by the University
More informationNET WORTH STATEMENT - FARMERS AND RANCHERS Name: Date of Statement: Valuation Method: Market Cost
NET WORTH STATEMENT - FARMERS AND RANCHERS Name: Address: Phone: Date of Statement: Valuation Method: Cost Note: This net worth statement should be filled in as a single entity. If you are able to separate
More informationWorksheet 1* Historic and Projected Out-of-Pocket Cost of Production
Worksheet 1* Historic and Projected Production Records used for a sole proprietorship with most of the income coming from the dairy enterprise: Federal Income Tax Schedule F, Form 4797, year beginning
More informationWhat is in Store for the Agricultural Land Market?
February 2015 What is in Store for the Agricultural Land Market? Michael Langemeier, Associate Director, Center for Commercial Agriculture Michael Boehlje, Distinguished Professor, Center for Commercial
More informationCash Flow Projection
Name Address City, State Preparer Cash Flow Projection Farm Financial Planning Input Forms Farm No. (3 digit) Beginning Cash Flow Date Version 1 Month Year The Cash Flow Projection Program is designed
More informationA Checkup On Your Financial Health. Paul Ellinger Bruce Sherrick
A Checkup On Your Financial Health Paul Ellinger Bruce Sherrick Outline Key performance measures What lenders look at? Tools to monitor your health and assist decision making 2 Questions -- Perceptions
More informationModule 5 Preparing Agricultural Financial Statements: The Income Statement and Cash Flow Module Outline
Module 5 Preparing Agricultural Financial Statements: Module Outline Introduction Income Statement Overview Cash Income Statement What is not included on an income statement? Roadside Chat #1 Limitations
More informationRelationship between Cash Rent and Net Return to Land
April 2017 Relationship between Cash Rent and Net Return to Land Nathan Carson, Graduate Research Assistant, Center for Commercial Agriculture Michael Langemeier, Associate Director, Center for Commercial
More information2015 Iowa Farm Business Management Career Development Event. INDIVIDUAL EXAM (150 pts.)
2015 Iowa Farm Business Management Career Development Event INDIVIDUAL EXAM (150 pts.) Select the best answer to each of the 75 questions to follow (2 pts. ea.). Code your answers on the answer sheet provided.
More informationJOHN AND MARY FARMER (Farm Business Only) BALANCE SHEET AS OF 12/31/X1 AND 12/31/X2
JOHN AND MARY FARMER (Farm Business Only) ASSETS 12/31/X2 12/31/X1 12/31/X2 12/31/X1 LIABILITIES Cash $ 101,743 $ 113,421 Accounts Payable $ 6,578 $ 0 Inventories (Schedule 1) 180,581 149,557 Notes Due
More informationAccrued rents & Lease payments Other (including relatives)
Balance Sheet Financial Statement Name: As Of: Name Home Phone: Address: Email Address First Merchants Bank SSN# Cell Phone: SSN# Cell Phone: Current Assets Market Value Current Liabilities Market Value
More informationRecord Keeping 101. Small and Beginning Farmers Workshop Milledgeville, GA February Ag & Applied Economics
Record Keeping 101 Small and Beginning Farmers Workshop Milledgeville, GA February 2014 Overview of Today Why keep records Production records Financial records Five easy steps to record keeping Schedule
More informationFarm Business Planner
COMPREHENSIVE GUIDE TO FARM FINANCIAL MANAGEMENT Farm Business Planner www.saskatchewan.ca/agriculture 1 Summary Net Worth Statement This worksheet is intended to help you establish the present financial
More informationStatement of Assets Client: as of. Current Assets. INTERMEDIATE ASSETS: Breeding Livestock. Market Livestock. Farm Machinery
Statement of Assets as of Current Assets Current Assets Cash on hand Investments Accounts Receivable Supplies Prepaid Expenses Growing Crops Current Assets Grain & Hay Inventory Grain & Hay on Hand Quantity
More information