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Preparation
Read "Measuring
and Analyzing Farm Financial Performance" (EC-712).
Review the Financial Basics module
to be familiar with some of the most pervasive measurement
issues.
Review MBC Farms case study. The source numbers for the
sample calculations are from the financial statements. Knowing
where they are located will make the calculations go smoothly.
Purpose of Lecture
This lecture identifies four types of ratios used in financial
management of a farm business and then shows how to calculate
each of them. It is also illustrates the use of benchmarking
the ratios against appropriate comparisons.
Structure of Presentation
First the method to calculate the ratio is shown as well as its
uses, then sample calculations are made on the case study.
Other References
“Understanding Key Financial
Ratios and Benchmarks.” Dave Kohl and Troy Wilson.
Northwest Farm Credit Services. Spokane, WA. Phone the marketing
department at 509-340-5400 to order.
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