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January 1, 1999
Financial Statements and Ratios
generated by
business sales and other
receipts minus cash
operating … that the
business has for meeting cash flow requirements.
Cash … of cash that is needed
to meet all of the cash needs of …
November 10, 2016
2016 Crop Insurance Workshop Presentations
not qualify as market readiness
operations (minimal, on farm, in field or close proximity to field)
must be adjusted out of the commodity’s revenue. This is
because these costs are not at risk from a commodity production
point of view and are not allowed to be covered under the
Federal Crop Insurance Act. Leaving market readiness costs in
the insured revenue was a change provided by the 2014 Farm Bill
to help make whole‐farm insurance more convenient and
simpler for producers growing specialty crops for specialty
markets.
If other crop insurance is purchased at the CAT level, the farm is
not eligible for WFRP.
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10
If a farm has allowable revenue higher than the maximum, it is
not eligible for WFRP.
If farms have too much revenue from animals/animal products
or greenhouse/nursery, they are not eligible for WFRP.
If growing the actual crop (not just the plant) then the crop
would be listed as, for example, tomatoes, not
greenhouse/nursery.
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12
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Revenue for the year will be determined using …
December 4, 2020
Ag Law Issues
many farm and
ranch (and other) estate plans. If farmland … eligible to be
exchanged for other real property and have the … trust for estate planning (or other) reasons doesn’t eliminate …
November 3, 2023
Ag Law Issues
and speaking schedule, and
other duties that I have. But … livestock, which may be in a year other than the year in which the … one purpose but are not for other purposes. The issue of what …
December 1, 2016
KFMA Research
and eroding
capacity to meet debt obligations. For example … bankers, consultants, and others in the ag. industry an opportunity … Depending on the selection, other options
appear such as “Category” …
September 1, 2022
2022 Ag Lenders Conference Presentations
2022/2023
KSU Agricultural Lenders Meetings
Garden City & Manhattan … Continued high 2023 Fertilizer & other Crop Input Costs….
• … Continued high 2023 Fertilizer & other Crop Input Costs….
• …
May 1, 2023
Ag Law Issues
taxpayer’s main home and one other
residence. See, e.g., Boehme … residence interest). If the other residence is rented out … for a fair rent to persons
other than family members. The …
February 19, 2024
Ag Law Issues
affidavit, refund, claim, or other document related to the
ERC” … the amount of the credit or meets a gross receipts test.
The … test.
The bill also makes other changes to the ERC relevant …
June 17, 2015
Commodity Program Papers
decisions. In total, 231 meetings were conducted by Agricultural … base acres versus 85% in the other
programs, but also the sheer … communicated at educational meetings that the later 4 years of …
August 28, 2015
Financial Management
Executive Summary
Solvency ratios are normally used as an indicator of the long‐term viability of the farm business. Farms with
high leverage have a greater likelihood of going bankrupt. Bankruptcy occurs because a farm loses its equity.
However, for a farm to lose equity, it must generate negative profits, which might imply that highly leveraged farms
are earning less profit than those farms without debt. Thus it might be possible to predict future profitability based on
solvency ratios. This paper tests that hypothesis but finds a naïve model of looking at past profit to predict future
profits works the better than using solvency ratios.
Introduction
The Farm Financial Standards Council currently lists 21 ratios that can be used to evaluate a farm business.
Three of these ratios are solvency ratios. Solvency ratios assess the amount of debt capital used by a farm business
and help determine whether the business can meet long‐term obligations. Any business that uses debt capital incurs
an obligation to make principle and interest payments. If a business has too much debt, periods of low profitability
can lead to insufficient cash flow to cover the principle and interest. Thus, the use of debt increases the financial risk
of a farm business and the likelihood the farm business might become insolvent.
While solvency ratios are designed to measure a company’s financial health, can they also be used to predict
future profitability? Because debt capital introduces interest expense to a farm business, net farm income will be
lower compared to a farm with just equity capital (everything else being equal). Going forward though, future net
farm income might not always be lower for higher leveraged farms as these farms may have taken on more debt in
order to fund profitable segments of their business.
Another potential complication of using solvency ratios to predict future farm profitability is farmland
control. As land is the most valuable asset class on most crop farms, controlling that land is an important decision.
Few farms have enough of their own equity to supply all the land they need without either purchasing land with debt
capital or renting land. Farms that have taken on more debt to purchase land will need to rent less land than a similar
farm with lower debt levels and farming the same acreage base. The interest rate and the cash rental rate, determine
Kansas State University Department Of Agricultural Economics Extension Publication …