Investing in capital replacement or new investments is appealing, but building working capital and paying off dead-weight debt may be the more prudent financial decision.
Farmers are notorious for preferring to farm while leaving business dealings to trust, fate or chance. Afterall, there are only so many hours in a day, and when farm families work near each other all day, it is tempting to believe that assumptions or verbal communication may replace written text. Farmers must remember, however, that every business entity carries legal and tax implications, and the written operating agreement may save a lot of headaches and heartaches when legal and tax issues arise.
Business strategies are practical actions that communicate how a business plans to reach its goals. Thinking strategically about the farm business as a whole helps determine emerging themes, issues, patterns, and opportunities. This allows for proactive management and helps maintain more control over what happens to the farm. Goals are of little value if there […]
Regular family money meetings can help divide the stress of the financial burden into more manageable challenges.
Regardless of the time of year, it is important for farm operators to spend some time in their office completing their least favorite activity – paperwork. Most farmers enjoy getting their hands dirty, from digging in the soil, repairing machinery, or working with livestock. They will reluctantly compile the necessary information for income tax preparation, credit borrowing, and crop reporting.
With economists at the U.S. Department of Agriculture predicting farm debt will reach a record high this year, Wisconsin agricultural leaders are warning farmers against the dangers of unregulated lenders.
The ﬁrst ﬁnancial management report often created for the farm business is the Balance Sheet. It provides insight of farm solvency and liquidity. What is meant by Solvency and Liquidity? The balance sheet is a report of the farm business’ financial position (strength) at a point in time. Position can be analyzed and interpreted using […]
Accrual adjustments are made in the Income Statement. How are these adjustments made? What do the Income Statement calculations tell us? Accrual adjustments are made on the income statement to better reflect earned profitability performance of the farm business. This factsheet provides more detail about the non-cash accrual adjustments, introduced in Part I of this […]
The first primary financial management report often created for the farm business is the Balance Sheet. It provides insight of farm liquidity and solvency. What is the Concept and Structure of the Balance Sheet? The balance sheet is a report of the farm business’ financial position (strength) at a point in time. It is referred […]
The Income Statement is a report of the farm business’ ﬁnancial performance during a given time frame. What is the Concept and Structure of the Income Statement? Farm performance is measured using the Income Statement. The Income Statement answers the question, did the farm generate an adequate return on the investment of your money, labor […]