AGEC 432 – FinanceSpring 2007

Structure of Financial Statements

Annual Consolidated Balance Sheet

Basic Structure of the Balance Sheet

Assets: Liabilities and Net Worth:

Current assets Current liabilities

plus Intermediate assets plus Intermediate liabilities

plus Long term assets plus long term liabilities

plus Net worth

equals Total assets equals Total liabilities and net worth

Assets: Liabilities and Net Worth:

Current assets Current liabilities

plus Intermediate assets plus Intermediate liabilities

plus Long term assets plus long term liabilities

plus Net worth

equals Total assets equals Total liabilities and net worth

Basic Structure of Income Statement

Value of farm productionMinus Farm expensesEquals Income from operationsPlus Gain (loss) on sale of intermediate and long term assetsEquals Net farm incomePlus Nonfarm incomeEquals Income (loss) before taxes and extraordinary itemsMinus Provision for income taxesEquals Income before extraordinary itemsPlus Extraordinary itemsEquals Net income

Value of farm productionMinus Farm expensesEquals Income from operationsPlus Gain (loss) on sale of intermediate and long term assetsEquals Net farm incomePlus Nonfarm incomeEquals Income (loss) before taxes and extraordinary itemsMinus Provision for income taxesEquals Income before extraordinary itemsPlus Extraordinary itemsEquals Net income

Basic Structure of Cash Flow Statement

Cash availableMinus Cash requiredEquals Cash available less cash requiredPlus Savings withdrawalsEquals Cash positionPlus Net borrowingMinus Other uses of cashMinus Additions to savingsEquals Ending cash balance

Cash availableMinus Cash requiredEquals Cash available less cash requiredPlus Savings withdrawalsEquals Cash positionPlus Net borrowingMinus Other uses of cashMinus Additions to savingsEquals Ending cash balance

Cash Available Segment

Cash available:  

Beginning cash $0

Crop receipts $0

Livestock receipts $0

Breeding livestock receipts $0

Livestock product receipts $0

Other cash farm revenue $0

Nonfarm wages and salaries $0

Other nonfarm cash revenue $0

Gain on asset sale $0

Gifts and other cash available $0

Total cash available $0

Cash Required SegmentCash required:  Total operating expenses $0Income tax payments $0Intermediate term loan payments:   Interest payments $0 Principal payments $0Long term loan payments:   Interest payments $0 Principal payments $0Capital expenditures:   Machinery and motor vehicles $0 Breeding livestock $0 Buildings and improvements $0 Land $0   Family living expenses $0Other cash required $0 Total cash required $0

Annual Ending Cash Balance

Cash available minuscash required    + Savings withdrawal $0= Cash position   + New borrowing: $0 Intermediate term loans $0 Long term loans $0 Short term loans $0 Total new borrowing   - Other uses of cash: $0 Short term loan payments: $0 Interest payments $0 Principal payments $0 Additions to saving $0   = Ending cash

$0

$0

$0

$0

Monthly Cash Available

 

January

February March

Cash available:      

Beginning cash

Crop receipts

Livestock receipts

Breeding livestock receipts

Livestock product receipts

Other cash farm revenue

Nonfarm wages and salaries

Other nonfarm cash revenue

Gain on asset sale

Gifts and other cash available

Total cash available

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

Monthly Cash RequiredCash required:  Total operating expenses $0Income tax payments $0Intermediate term loan payments:   Interest payments $0 Principal payments $0Long term loan payments:   Interest payments $0 Principal payments $0Capital expenditures:   Machinery and motor vehicles $0 Breeding livestock $0 Buildings and improvements $0 Land $0   Family living expenses $0Other cash required $0 Total cash required $0

January February March

Monthly Cash PositionJanuary February March

Cash availableCash requiredSavings withdrawalCash position

Indicates monthly cash flowsurpluses or deficits beforeborrowing on a LOC…

Indicates monthly cash flowsurpluses or deficits beforeborrowing on a LOC…

Debt Repayment Capacity Statement

Repayment Capacity from Operations…..

Debt Repayment Capacity Report   

Farm sources of term debt repayment capacity:    Net income     Adjustments to net income:     Plus Depreciation   Less (plus) the gain (loss) on sale of assets   Less Nonfarm income   Less Family living withdrawals   Less Gifts to others   Subtotal     Term debt repayment capacity from operations  

$0 $0

$0$0$0$0$0$0 $0

$0

Remaining Capacity from Operations….

Uses of farm term debt repayment capacity:

   

Principal payments on term debt  

Downpayments on new capital purchases  

Deliquent notes payable  

Current uses

     

Farm capacity less current payments  

$0

$0

$0

$0 $0

$0

Term debt repayment capacity fromoperations less current uses…

Term debt repayment capacity fromoperations less current uses…

Total Repayment Margin

Other sources of term debt repayment capacity:

   

Gain (Loss) on sale of intermediate and long term assets  

Nonfarm income  

Other sources (e.g., gifts received)  

Subtotal

     

   

Capital replacement and term debt margin  

$0

$0

$0

$0 $0

$0

Funds available after accountingFor other sources…

Funds available after accountingFor other sources…