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financial management

Catalogue: GRDC Factsheets
It is important to understand gross margin budgets and their role in farm financial analysis... Having all positive enterprise gross margins in a farming business does not necessarily mean the total business is profitable, as other costs such as overhead costs and financing costs are not taken into account in gross margins... As gross margins only assess variable costs, they should not be the sole information used to calculate the cost of production...
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Catalogue: GRDC Factsheets
UNDERSTANDING YOUR KEY FINANCIAL RATIOS HELPS MANAGE YOUR FARM BUSINESS SUSTAINABILITY As farm businesses become more sophisticated and owners strive ever harder to improve profitability and create wealth, the move beyond simple measures of physical production to whole business analysis is gaining momentum... Calculating financial ratios is quite simple - with a little explanation... In summary, the above business has performed at a less than optimal level in the year under analysis...
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Catalogue: GRDC Factsheets
Understand gross margin budgets for cropping... The two areas where gross margins are misused are: (1) when they are used to calculate the cost of production; and (2) when the sensitivity analysis of price and yield is used to indicate enterprise profitability... The GRDC will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on the information in this publication...
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Catalogue: GRDC Factsheets
Successful farm businesses know the cost of production of each commodity they produce... Copies of all the above fact sheets are FREE plus P&H and available from: Ground Cover Direct Freephone: 1800 11 00 44 or email: ground-cover-direct@canprint.com.au These can also be downloaded from www.GRDC.com.au/fbm could be made that the figures are giving barley a bad rap, due to it being the crop of choice when 'rolling the dice' in a tight season... For example, if you have $1m of machinery and $800k of it is solely cropping related, then apportion the depreciation to the cropping enterprise...
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Catalogue: GRDC Factsheets
Maintaining strong control of the cash flow means planning (estimating) and monitoring the cash flow... Cash flow is a key measure to show banks whether the business can service its debt... Once farmers have put together this budget and the bank has ticked off all financial questions, it often goes into the farm office top drawer and is not seen again for another year, or until the bank wants another cash flow budget put together for the next season...
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Catalogue: GRDC Media
Caption: Macquarie Franklin consultant Basil Doonan told the GRDC Farm Business Updates that a 'systems' approach to the decision making process can help farmers achieve consistently high profitability... Mr Doonan told the recent Updates that farming systems would continue to evolve as growers capitalised on new technologies and techniques emerging from research... Mr Doonan said the environment that farm businesses operated in was dynamic, which meant that any decision needed to take into account how it would impact on the whole farming system...
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Catalogue: GRDC Factsheets
The reality is that the balance sheet is the only record that indicates the growth in wealth of the business over time, and indicates a farming business's performance and ability to manage risk... As the farmer was focused on the important indicators of both net profits and net worth, the bank could see that the business was still viable, and capable of continuing to farm even though the run of seasons though this period was unusually poor... The value of land is important as it generally has the largest share of the total assets of the farm business, and it is recommended that land value estimates be as accurate as possible...
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Catalogue: GRDC Factsheets
Profit and loss is the the true measure needed to determine business long-term sustainability... While the commodity sales income is relatively straight forward to assess, inco of lamb ewes were held back to build up the breeding ewe component of the A profit and loss needs to value this 'one-off' increase in retained ewe lambs (.. Return on capital is calculated by farm EBIT divided by total assets owned...
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Catalogue: GRDC Media
Caption: Macquarie Franklin consultant Basil Doonan told the GRDC Farm Business Updates that a 'systems' approach to the decision making process can help farmers achieve consistently high profitability... Mr Doonan told the recent Updates that farming systems would continue to evolve as growers capitalised on new technologies and techniques emerging from research... Mr Doonan said the environment that farm businesses operated in was dynamic, which meant that any decision needed to take into account how it would impact on the whole farming system...
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