Farm Business Analysis for Twin Pines Farm

Farm Business Analysis for Twin Pines Farm

How did Twin Pines Farm do this year compared to other similar farms? Fill in the blanks, using information from the financial statements on the back and other information given below to calculate key ratios.

Twin Farms / Comparison
Size of business
Output:Gross farm revenue / $ / $502,042
Number of pigs sold / 1,200 / 1,834
Resources:Total farm assets (market value) / $ / $1,072,592
Number of sows / 100 / 119
Crop acres (240 acres owned, 500 acres rented) / 740 / 675
Labor months used / 15 / 20
Were they larger or smaller?

Solvency

Total debt-to-asset ratio (total liabilities / total assets, market value) / ______% / 33%
Net Worth (market value) / $______/ $774,589
Evaluation?

Liquidity

Working capital (current assets______– current liabilities______) / $______/ $168,560
Current ratio (current assets / current liabilities) / ______ / 2.44
Evaluation?
Profitability
Net farm income / $______/ $33,758
Return on assets (net farm income______+ interest paid______
– labor value @ $2,000 per month ______) / $______total assets = / ______% / 4.0%
Evaluation?
Economic efficiency
Asset turnover ratio (gross farm revenue______/ total assets______) / ______% / 27%
Gross farm revenue per person ($______/______persons) / $______/ $302,917
(12 months of labor = 1 person)
Evaluation?
Physical efficiency
Crops (bushels per acre):corn yield / 131 / 143
Soybeans yield / 45 / 46
Livestock: (pigs weaned per litter) / 8.5 / 8.26
(lb. feed fed per lb. gain)
(______bu. corn fed x 56 lb.) + 200,000 lb. of supplement =______lb. feed
Divided by ______lbs. of hog production = / ______ / 3.1
Evaluation?
Prices received (sales / units sold)
Corn, $/bu. ($______sales / ______bu. Sold) / $______/ $1.81
Soybeans, $/bu. / $4.81 / $4.66
Market hogs, $/cwt. ($ sold ______/ lbs. sold ______) / $ ______/ $.41
Evaluation?
Prices paid
Land (cash rent per acre) / $127 / $130
Cost of feed per pound fed
(______bu. corn fed @ $1.85 + $32,000 for supplement) = $______/984,000 lb.fed / $______/ $.06
Evaluation?

Net Worth Statement

Name: Twin Pines FarmDate: 12/31

Assets(market value)Liabilities

Current assets / $302,750 / Current liabilities / $130,250
Intermediate assets / $306,000 / Intermediate liabilities / $ 40,000
Long-term assets / $510,000 / Long-term liabilities / $ 92,000
Total farm assets / $1,118,750 / Total liabilities / $242,250
Net Worth / $869,450

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Net Income Statement

Name: Twin Pines FarmYear: 200X

Cash farm income: Corn sales

/ $ 37,000
Soybean sales / 40,500
Hog sales / 122,500
Accrual adjustments / 42,500
Gross farm revenue / $242,500
Cash farm expenses (except interest) / $134,000
Interest paid / 16,000
Accrual adjustments / - 43,230
Depreciation / 23,000
Gross farm expenses / $216,230
Capital gains / 8,000
Net farm income / $ 34,270

Corn and Hog Inventories

Sources and Uses: 200X

Corn—bushels

/ Market hogs
Head / Market hogs
Pounds / Market hogs—$

Sources

Beginning inventory / 44,000 / 1,600 / 120,000 / $ 90,000
Production / 48,400 / 1,132 / 380,200 / 124,000
Total / 88,000 / 2,732 / 500,200 / $214,000

Uses

Sold / 20,000 / 1,200 / 326,000 / $122,500
Fed / 14,000 / Death loss 32 / xx / xx
Ending inventory / 54,000 / 1,500 / 174,200 / 91,500
Total / 88,000 / 2,732 / 500,200 / $214,000

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