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Disk(s) under separate cover





... ....... . '. FM.M - .G R :
.i .:: :".S : .
, ,:..:..:: ."..:... :.,..,:..:: :....: ... :: .... .. . -


Circular 648


8 a or Decision Support,

S Financial Statement Analysis

... ....

SERIES

i, .;; .. ;.;Rorn A d .:erm..an
i SSussan:P i"ps


..:' ; ^.' : Pii ::.: ^.. :. '' :;" :':'. ".. .:"..': .' ". . . .. ....






ID!-b...,, '".':".,." ell; A3tem I,'tural .eltf" I Ui arlWy of F.oride / John T. Wo". Dean
'^ .. : .. :] : : ': : .: ::*" ''; .'.: ...:. '::. ...' '.. ". .. : .




f;48
gu ide : .:: . . .
i..:.f" :,'' ....: ,.:;'.:." ."'. .: ..."..:.:. .. :" .: .. ." . .
;:':, "." "i~ :, : ": ,,:.'" ..:'." : :L ':.. ",. " ." :.
;" ;!:: :!? : :.:i:".:.". "". .: .. :. ..: : .: .
,.;.'.: : ? .., :..f. !:. ;: : . .::. : .:,, :.. ..: :: ,. ". ..,. :.L ,. .....
,i .!.:!: :i ;:.; ;'; i:'. :::. i :, .. :; .: .. = ," .: ':. .
i ; :.i'i:. .. .::!. :.,... :..:. .,.: : .


'"!-W:!..'S' !*;**- *'. ".s ;.-* ** *<* ''*('*' .Jfe^













S hi. eal explains the.. use of ALMR, a colectio :. ..
...:,:^ analysisi tools which facilitate the creation, intl
t'iem ea o tomination of operating budgets, cost recovery .
h ".. l it .. la schedules, cashflows, balance sheets, income
st IIImRnts, atios and other financial analyses needed by farmers
SA::n.;:; those fimncing and/or advising them on their financial

S D'Cai htlea ~w, Financial .Statements, Budgeting, Cost
:cm:e::::y,:i : atios, Decision Support, Financial Analysis.


ACJ2NOWLEDGMB.W.S

uy:' thanaS ace due to Dr. Bill Boggess and Dr. Jon van Blokland
.: .. viwag and commenting on FAOEWMR and also to many other :
.eM9t. sasassnd RMcc Econoaics personnel who informally reviewed and
,::::gas;m e feeanshlo h antks also go to Cathy Collins, Charlie Pierce, ;
a wd i a. Pia.rish, student employees of FARM Lab.






.. .... .. .;.... .. ".. ..

:. *::i''i:;., :* .. a.d.i n 'o t a y o*. ,4



















::::::::::: :::::: I:: ::.** : : : : o go o y o a *ie e,








TABLE OF CONTENTS



Page
LIST OF FIGURES ................................. ...... 4
INTRODUCTION................................ ....... .. 5
PROGRAM START-UP.................................... 6
PROGRAM OVERVIEW......................................... 9
Decision Tools
RATES........................ ............ . ... 11
LOANS........... ................. ......... ...... 13
STOCKER ............. .......... ......... ..... 14
CROP........................... .. .............. 17
HEDGE......................... ... ..... ..... 18
STATEMENTS .................................... 20
Budgets .......... .... .......... ........ . 21
Recovery ................................... 24
Loans................... ... ......... .... 27
Start Bal........... ......... ............ 29
Cashflow................ ............. .... 31
Ending Bal................................... 32
Income.............. .............. .......... 34
Other........ ..... ............. ......... 36
Graph.................... ............. 38
Calc................................. 39
Print ............... ....... ........ 40
Save/Exit........................... 41
OTHER .......................................... 42
Checkbook................................. 42
Asset.......... ....................... ...... 43
MISCELLANEOUS NOTES.................................. 45
Printing Graphs............................... 45
Reserved Menu Choices.......................... 45
Advanced Lotus Users......................... 45
CONCLUSION....................... .. ............... 46
REFERENCES.......................................... 47
APPENDIX A.......................................... 49
APPENDIX B..... .................................. .. 53
APPENDIX C.......................................... 69














3UNIVRAR
UNIVERSITY OF FLORIDA 1188Ri










LIST OF FIGURES


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FIGURE 31.


FIGURE
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32.
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Sample FARMMGR Title Page......................
FARMMGR Menu Tree...............................
FARMMGR Main Menu Screen........................
RATES Menu Screen..............................
Sample AMORTIZED Option.........................
Sample NPV & IRR Screen.........................
Example Future Value Calculation................
Sample Amortized Loan Analysis..................
Sample 1 Year Unamortized Loan Analysis.........
Sample 10 Year Unamortized Loan Analysis........
Sample STOCKER Return Sensitivity Analysis......
Sample CROP Return Sensitivity Analysis.........
Sample HEDGE Analysis...........................
Example of a Hedging Analysis...................
STATEMENTS Start-up.............................
STATEMENTS Menu..................................
Sample Livestock Budget Option .................
Sample Expense Budget Option....................
Sample Cropt#l Budget Option....................
Sample RECOVERY Option Menu....... .........
Sample Machinery/Equipment RECOVERY Screen......
Sample Livestock & Buildings/Improvements
RECOVERY Screen...............................
Sample Amortized Loan Schedule..................
Sample Unamortized Loan Schedule................
Sample First Screen of Beginning Balance Sheet..
Sample Second Screen of Beginning Balance Sheet.
Sample First Screen of CASHFLOW.................
Sample Second Screen of CASHFLOW................
Sample Third Screen of CASHFLOW.................
Sample First Screen of Ending Balance Sheet.....

Sample Second Screen of the Ending Balance
Sheet.........................................
Sample First Screen of Income Statement..........
Sample Second Screen of Income Statement........
OTHER Menu.... .. ...................... ........
Market Value Balance Sheets.....................
Statement of Owner Equity.......................
Financial Ratio Analysis.......................
Graph Submenu...................................
Calc Submenu With "Manual" Option Description...
Print Submenu....................................
Selectively Choose Reports......................
Save/Exit Options...............................
Sample CHECKBOOK Reconciliation.................
Sample ASSET Decision Aid.......................
Sample ASSET Summary............................
Sample ASSET Yearly Summary.....................


Page
7
8
9
11
11
12
12
13
14
14
16
17
18
19
20
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21
22
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25
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31
31
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33


33
34
34
36
36
37
37
38
39
40
40
41
42
43
44
44












INTRODUCTION


Description

FARMMGR (Farm Manager Decision Support, Budgeting and Finan-
cial Statement Analysis) is a powerful collection of decision
support tools. Included in this collection are tools that calcu-
late and integrate investment rates, loan amortization, stocker
returns, crop returns, hedging transactions, budgets, deprecia-
tion schedules, loan repayment schedules, balance sheets, income
statements, cashflows, financial ratios, checkbook reconciliation
and asset purchase analysis.

It is the intention of the authors to provide a friendly,
yet powerful, program that appeals to both farmers and bankers.
Individual farmers can use FARMMGR to analyze the production,
financial and management situations of their farms and to
evaluate the impact that changes could have on the farm opera-
tion. Lending institutions can use FARMMGR to evaluate loan
proposals and to monitor the condition of a loan and thus be
alerted to changes that could affect loan repayment.



Specifications

FARMMGR requires 320k memory, runs under MS-DOS using Lotus
1-2-3 version 1.A integrated software, and is available for the
IBM-PC, DEC Rainbow, Zenith and others (see Appendix A for a list
of Lotus compatible computers).

Lotus 1-2-3 is an integrated software package written by
Lotus Development Corporation which combines state-of-the art
graphics and information management capabilities with a highly
advanced electronic spreadsheet. Since 1983 it has been one of
the top two selling software packages for microcomputers. Little
or no programming knowledge is required to use 1-2-3. The
FARMMGR program requires no previous experience with micro-
computers or special programming skills.

Lotus 1-2-3 was chosen as the programming environment not
only for its popularity, but because farmers and lending institu-
tions will find its powerful spreadsheet ability very useful for
other applications. As the user becomes more familiar with using
Lotus and FARMMGR, the two programs will provide a framework from
which individuals can modify or create decision tools designed to
meet their own preferences and needs.









PROGRAM START-UP


Making Backup Copies

Before starting your first FARMMGR session you should pro-
tect your FARMMGR program disk by making a backup copy of it.
Making this backup is important for two reasons. One, your
original distribution disk will give you a write protect error if
you try to save your work on it. And two, if your disk develops
a fatal error you will always have the original disk. The orig-
inal FARMMGR program disk should be put in a safe location and
never used for day-to-day work.

Making a backup copy is easy when following these simple
step-by-step instructions:

1- Put your 1-2-3 Utility Disk in drive A (left side)
and turn the power on. For IBM PC users ,if the
power is already on press the
keys simultaneously. For non-IBM PC users, check
the owner's manual for rebooting procedures.

2- Label a blank disk as "FARMMGR Working Copy" and
put this disk in drive B (right side). For single
drive users 1-2-3 will prompt you to appropriately
swap disks as needed.

3- Use the arrow keys to select the Disk Manager option
and press .

4- Use the arrow keys again to select the Disk Copy
option and press .

5- When prompted, remove the Utility Disk from drive A,
insert your original FARMMGR program disk and
press the key.

6- When the copy is complete remove the original
FARMMGR disk from drive A and put it in a safe
location.

7- Use your working copy of FARMMGR as the daily
working copy.












Starting FARMMGR

To start a FARMMGR session follow these simple instructions:

1- Put your 1-2-3 disk in drive A and turn the power
on. For IBM PC users if the power is already on
press the keys simultaneously.
For non-IBM PC users, check the owner's manual for
rebooting procedures.

2- Put your FARMMGR working copy in drive B.

3- Press to select the 1-2-3 option.

4- When the program is loaded the title page will be
displayed, see Figure 1. You are now ready to begin
using FARMMGR.


FIGURE 1. Sample FARMMGR Title Page

Al: CMD MENU
RATES LOANS STOCKER CROP HEDGE STATEMENTS OTHER RETURN
Loan Pmts, Present Value, Future Value, Net PV, Internal Rate of Return
A B C D E F G H
1
2
3
4 FARMMGR
5
6 FARM MANAGER DECISION SUPPORT,
7
8 BUDGETING AND
9
10 FINANCIAL STATEMENT ANALYSIS
11
12
13
14
15
16 Developed by FARM Lab,
17 Food and Resource Economics Department,
18 University of Florida
19
20



A Word About Menus

The ease of data entry and report generation is partially
due to menus. You might think of a computer menu as you would a
restaurant menu. You make a selection from the choices available
and then tell the waiter or waitress or computer, whichever the
case may be, what your selection is. You tell FARMMGR which
selection you want by using the left and right arrows to high-
light the desired selection and then pressing the key.

All work done in FARMMGR is accomplished by using 1-2-3's
"range input" facility. This facility allows only the high
intensity green cells, or contrasting color cells for color
monitors, to accept input. High intensity cells, as the name
implies, appear brighter than low or normal intensity cells. The
difference in intensities for monochrome monitors and color for
color monitors is easily distinguishable on the monitor display.









FIGURE 2. FARMMGR MENU TREE


AMORTIZED
>>>> NPV
SAVE
RETURN




AMORTIZED LOANS
UNAMORITIZEDC1YR)
>>>> UNAMORITIZED(1OYR)
SAVE
RETURN
......................


LIVESTOCK
EXPENSE
>>>> CROP#1
CROP#2
RETURN



MACHINERY/EQUIPMENT
>>> LIVESTOCK & BUILDING/IMPROVEMENT
RETURN


I STOCKER |



| CROP |




HEDGE |




STATEMENTS >>>>






















*o I| OTiER : >>>| >



I QUIT |


CASHFLOW
BALANCE
INCOME
CURRENT
LEVERAGE
PROFIT
>>>> EFFICIENCY
RETURN



MANUAL
>>>> AUTOMATIC
RETURN



ALL
>>>> CHOOSE
RETURN



CANCEL
SAVE ONLY
>>> SAVE & EXIT
EXIT ONLY
YEAR


BUDGETS






RECOVERY


LOANS

START BAL.

CASHFLOW

ENDING BAL.

INCOME






OTHER




CHECKBOOK
ASSET
RESERVED
RESERVED
RESERVED
RESERVED
RESERVED
RETURN


RATES








LOANS
...........--M


MARKET

EQUITY

FINANCIAL

GRAPH





CALC





PRINT






SAVE/EXIT

RETURN


CASHFLOW
BUDGETS
RECOVERY
>>> LOANS
SHEETS
INCOME
MARKET
RETURN
--..........









PROGRAM OVERVIEW


Menu Tree

FARMMGR is composed of a hierarchy of menus. Figure 2 is a
visual representation of the menu layout. The eight boxes on the
left make up what is called the Main Menu. Figure 3 shows how
the Main Menu will look on your monitor. Each of the additional
boxes to the right of the Main Menu boxes in Figure 2 represent
different levels or submenus available. The arrows ( >>>> )
indicate the location of a branch from one level to another.



FIGURE 3. FARMMGR Main Menu Screen

Al: CMD MENU
RATES LOANS STOCKER CROP HEDGE STATEMENTS OTHER RETURN
Loan Pmts, Present Value, Future Value, Net PV, Internal Rate of Return
A B C D E F G H
1
2
3
4 FARMMGR
5
6 FARM MANAGER DECISION SUPPORT,
7
8 BUDGETING AND
9
10 FINANCIAL STATEMENT ANALYSIS
11
12
13
14
15
16 Developed by FARM Lab,
17 Food and Resource Economics Department,
18 Institute of Food and Agricultural Sciences
19 University of Florida (c)1984
20


Brief Topic Description

To help you become familiar with the tools in FARMMGR, the
next section briefly describes each option that is available.
For a more detailed discussion including examples, refer to the
specific topic discussion.

RATES: This Main Menu selection lets you calculate loan
payments received, present value of a future sum, future value of
a present sum, net present value and the internal rate of return
on an investment.

LOANS: This Main Menu selection has one submenu with 5
options. These options let you analyze amortized loans, 1 year
unamortized loans, 10 year unamortized loans, save the data, and
return to the Main Menu.

STOCKER: This Main Menu selection lets you analyze returns
received from the purchase and resale of stocker animals.

CROP: This Main Menu selection lets you analyze returns
from growing a crop.







HEDGE: This Main Menu selection compares returns from hedg-
ing on the futures market versus selling on the cash market.

STATEMENTS: This Main Menu selection is the largest and
most complex of the decision tools. Looking at Figure 2 you can
see that STATEMENTS has four menu levels with a total of 9 diffe-
rent menus. The STATEMENTS selection lets you calculate budgets,
depreciation schedules, loan schedules, beginning and ending
balance sheets, income statements and cashflows, which integrate
to produce a complete financial picture.

OTHER: This Main Menu selection includes checkbook recon-
ciliation and capital asset purchase evaluation. Five menu
options have been reserved for future versions of FARMMGR and to
allow the user to create individual applications.

QUIT: This Main Menu selection lets you quit Lotus 1-2-3.




Getting Around FARMMGR

To select a menu option in FARMMGR use the left and right
arrows to point to your desired selection and press the
key. To move to the next screen of a program module or to return
to the most recent menu from within a program module press a
"null return". A null return is simply an key with no
data input. To move from a submenu to a higher level menu select
the RETURN option available on all menu displays.

One special note. Getting out of the STATEMENTS option can
be tricky at first. From the first submenu level select the
OTHER option. From this new level select the Save/Exit option.
From this third new level select the appropriate option. Cancel
returns you to the previous menu level, Save Only saves your data
and returns you to the previous menu level, Save & Exit saves
your data and returns you to the Main Menu, Exit does not save
the data and returns you to the Main Menu, Year lets you change
the year for which your information applies.












RATES


This tool helps you calculate amortized payments, present
values (PV), future values (FV), net present value (NPV) and
internal rates of returns (IRR). This option assumes that the
user is familiar with time value of money theories. The RATES
option menu has two selections that the user may choose, see
Figure 4.


FIGURE 4. RATES Menu Screen

A21: CMD MENU
Amortized NPV & IRR Save Return
Payment, Present Value, and Future Value amortization calculations.
A B C D E F G
21
22
23
24
25
26
27 RATES OF RETURNS
28
29
30
31
32
R Developed by FARM Lab,
35 Food and Resource Economics Department
36 University of Florida
37
38
39
40



The first choice, AMORTIZED lets you calculate amortized
payments, PV and FV, see Figure 5. The amortized payments calcu-
lation requires data on rate of return per period, number of
periods and amount. To calculate the present value of a future
sum or the future value of a present sum you simply supply the
rate of return per period, number of periods and cash inflows or
outflows.


FIGURE 5. Sample AMORTIZED Option

E7: (P2) U 0.12/12 CMD READY
A B C D E F G
1
2
3 Amortized Present Future
4Payment Value Value
5 PMT PV FV
7 RATE OF RETURN/PERIOD 1.00% 12.00% 1.00%
8
9 NUMBER OF PERIODS 360 10 360
10
11 AMOUNT 100,000 5,650 3,494,964
12
13 PAYMENTS (FLOWS) 1,029 1,000 1,000
14
15
16
17
18
19
20









By pressing a null return you will return to the RATES menu
where you can select the second option NPV & IRR, see Figure 6.
To calculate NPV you must supply the rate of return and all
inflows and outflows. To find the IRR of an investment you
supply all inflow and outflow values. The parenthesize indicate
a net outflow..

FIGURE 6. Sample NPV & IRR Screen


J3: (P2) U 0.08
H I J K
1 (Net Present Value) NPV
2 ------------ ----- ---- -----------------
3' Rate of Return 8.00%
4
5 NET PRESENT VALUE = 1,010
6
7 INITIAL FLOW (6,000)
8 PERIOD ENDING 1 1 500
9 2 1 500
10 3 1 500
11 4 1 500
12 5 3,000
13 6 0
14 7 0
15 8 0
16 9 0
17 10 0
18 11 0
19 12 0
20 3 0


CMD READY
L M N
IRR (Internal Rate of Return)
IRR = 13.56%
GUESS (to Resolve Multi-valued
answer)-> 10.00%
INITIAL (5,000)
Period 1 1,000
2 950
3 975
4 (1 000)
5 1,110
6 1 200
7 1 080
8 990
9 1 150
10 1,240
11 1 000
12 1,000
13 1.000


Example:

Let's assume that you invest $1,000 a year for the next 10
years. If you can earn 12% interest how much will your invest-
ment be worth at the end of 10 years? To solve this problem
select the RATES option from the Main Menu. Press the right
arrow key twice to highlight the rate of return row and the FV
column (row 7, col G). Type <.12>, press the down arrow, type
<10>, press the down arrow, type <1000> and press . The
amount displayed on your screen should be 17,549, see Figure 7.
For IBM PC users if you want a quick printout of this screen
press . To return to the Main Menu enter two null
returns.

FIGURE 7. Example Future Value Calculation


G13: (,0) U 1000
A B C D
2


7 RATE OF RETURN/PERIOD
8
9, NUMBER OF PERIODS
10
11 AMOUNT
12
13 PAYMENTS (FLOWS)


CMD READY


Amortized Present Future
Payment Value Value
MT PV FV
1.00% 12.00% 12.00%
360 10 10
100,000 5,650 17,549
1,029 1,000 1,000


__


CY












LOANS


The second tool in the FARMMGR tool box is the LOANS option
which calculates amortized loans, 1 year unamortized loans, 10
year unamortized loans and also allows you to save the data for
later use. The LOANS option is similar to the loan analysis
available under the STATEMENTS option. This tool is helpful for
determining the impact of loan activity on monthly cash require-
ments.

The amortized loan analysis calculates monthly payments for
up to 10 intermediate items and up to 3 long term items. The
user supplies the name of the item, the year and month of pur-
chase, the amount of the loan, the interest rate and the useful
life of the loan. See Figure 8 for a sample screen.




FIGURE 8. Sample Amortized Loan Analysis


B4: U '150 h.p tractor


CMD READY


A B CD E
1 AMORTIZED INTERMEDIATE LOANS
2 # NAME YR MTH AMOUNT
3 .. .............. .. ... ............
4 1 150 h.p tractor 84 9 $36,500
5 2 100 hp tractor 84 9 $25,000
6 3 subsoiLer 84 9 $6,000
7 4 M.B.PLow 84 9 $2,750
8 5 Combine 84 9 $50,000
9 6 T.Disk 84 9 $2,750
10 7 Field Cultivator 84 9 $6,275
11 8 Truck 84 9 $17,000
12 9 Pickup 84 9 $9,500
13 10 Other Equipment 84 9 $7,950
14 SUBTOTAL
15 LONG-TERM LOANS
16 1 FLB 84 1 $240,000
17 2 HOUSE MORTGAGE 84 1 $45,000
18 3 OTHER
19 SUBTOTAL
20 TOTAL


F G H
RATE LIFE MONTHLY
(X) mths PAYMENT
13.00% 120 545
13.00% 120 373
13.00% 48 161
13.00X 48 74
13.00% 120 747
13.00% 48 74
13.00% 48 168
13.00% 48 456
13.00% 48 255
13.00% 48 213
3066


13.00% 240
13.00% 240


2812
527
0
3339
6405


__ _____









The 1 year unamortized loan analysis calculates, for a 12
month period, the monthly interest due, accured interest, out-
standing principal, ending loan balance for the month and the
amount of principal that was amortized during the 12 month
period. The user supplies the name of the loan, interest rate,
number of months for amortization, month the loan was initiated
if for the current year, percent PCA stock required if any,
beginning outstanding principal and the previous interest due if
any. See Figure 9 for a sample screen.


FIGURE 9. Sample 1 Year Unamortized Loan Analysis

K3: U 'COUNTY PCA CMD READY

I J K L M N 0
1
2 If toan initiated this year,
3 Name of Loan: COUNTY PCA which month ?: 0
4 Interest Rt.: 10.00% PCA Stock (X): 10%
5 Actual PCA Rt: 11.11% Prin. Remain.: 20.000
6 12 Mths Amortizations 1 769 Prev. Int.Due: 2 000
7 TH Ending Payments Curr.nt. Acc.Int. Principal ENDING AL.
$ 1 0 204 2,204 20,000 22,204
10 2 0 226 2,430 20,000 2 430
11 3 0 230 2,660 20 000 22 660
12 4 0 234 2,894 20,000 22,894
13 5 0 239 3133 20,000 23 133
15 7 0 248 3 624 20 000 23,624
16 8 0 252 3 876 20 000 23,876
17 9 5,000 257 0 19 133 19,133
18 10 177 177 19,133 19,310
19 11 0 180 358 19,133 19,491
20 12 0 184 541 19 133 19675



The 10 year unamortized loan analysis calculates, on a
yearly basis, the current interest due, delinquent interest if
any, outstanding principal, ending loan balance for each year and
the amount of principal that was amortized each year. The user
supplies the name of the loan, amount to be amortized, year the
loan started, initial loan amount, percent PCA stock required if
any, beginning principal remaining and the amount of delinquent
interest if any. See Figure 10 for a sample screen.


FIGURE 10. Sample 10 Year Unamortized Loan Analysis

022: (FO) U 1976 CMD READY

I J K L MH 0
21
22 CURRENT YEAR: 1983 Year Loan Started: 1976
23 Initial Loan Amt.: $500,000
24 Name of Loan: LOCAL PCA COW PURCHA PCA Stock (%): 10%
25 Interest Rt.: 12.00% Cash Received: $450,000
26 Amortization Amount = $215,000 Principal Remain.: $215,000
27 for 10.00 Years = 39 939 Deinquent Int.: $0
28 Year Ending Payments Curr.fnt. Del.Int. Principal ENDING BAL.
29 ... ..-- ..*..... -........ . ." ....... .........
30 1983 39939 28380 0 203,441 203,441
31 198 39,939 26854 0 190,356 190,356
32 1985 39939 25127 0 175,544 175,544
33 1986 39 939 23,172 0 158,777 158,777
34 1987 39,939 20,959 0 139,797 139,797
35 1988 39,939 18453 0 118,311 118,311
36 1989 39,930 15 617 0 93 998 93,998
37 1990 39 939' 12408 0 66,467 66,467
38 1991 39 939 8 774 0 35,301 35,301
39 1992 39 961 4660 0 (0) 0
40 1993rl 0 0 (0) 0








Example:


You are considering buying a new pickup truck. If you buy
the truck in January 1984 how much will the monthly payments be
on a 4 year loan at 11.95%? You estimate that the truck will
cost $10,000. From the Main Menu select the LOANS option. From
the LOANS menu select the AMORTIZATION option. Move the cursor
to row 4, column B. Enter the item name and press the
right arrow, enter the year of purchase <84> and press the right
arrow. Continuing in the same manner, enter the month of pur-
chase <01>, loan amount <10000> and interest rate <.12>. Enter
the life of the loan <4> and press the key. The monthly
payments should be $263. With this information you can now
determine if your monthly cash flow is sufficient to cover loan
payments on the truck.





STOCKER


The third decision making aid in FARMMGR is the STOCKER
option. This option calculates returns received from the pur-
chase and resale of stocker animals.

The user supplies information on six items including, the
purchase price ($/LBS), the purchase weight (LBS), expenses asso-
ciated with the total number of head to be purchased, the number
of head purchased, the expected selling price ($/LBS) and the
expected selling weight (LBS). The computer uses this infor-
mation to construct a return sensitivity table, see Figure 11.
The user may elect to enter variable expenses or total expenses
in which case the analysis would apply to returns over variable
costs for the former and returns to management and risk for the
latter.


FIGURE 11. Sample STOCKER Return Sensitivity Analysis

B2: (F2) U 0.65 CMD READY

A B C D E F
2 PURCHASE $/LB 0.65 EXPENSES 0 SELLING $/LB 0.60
3 PURCHASE LBS 250 # OF HEAD 100 SELLING LBS 500
5
6 RETURN SENSITIVITY
7
8 PURCHASE PRICE
9 ........................................................
10 SELLING PRICE | 0.61 0.63 0.65 0.67 0.69
12
13 0.57 13 250 12,750 12,250 11,750 11,250
14 0.58 13,750 13,250 12 750 12,250 11750
15 0.59 14 250 13 750 13,250 12 750 12 250
16 0.60 14,750 14,250 13 750 13,250 12,750
17 0.61 15 250 14,750 14 250 13 750 13 250
18 0.62 15 750 15 250 14:750 14 250 13 750
19 0.63 16,250 15,750 15,250 14,750 14,250
20 ....................................-......-----------..............





Example:

Figure 11 above shows the return sensitivity for stockers
weighing 250 LBS purchased at $0.65/LBS. It was expected that
these stockers would sell for $0.60/LBS and weigh 500 LBS. The
table indicates that at the expected purchase and selling prices
the return on 100 head would be $13,750 (column D, row 16).

If expenses were $25/head and the expected selling price
increased to $0.62/LBS what would our sensitivity analysis look
like? Enter <2500> for expenses (100 x 25) and <.62> for selling
price. The return sensitivity analysis now tells us that given
the new conditions the return using a $0.65 purchase price and
$0.62 selling price is $12,250..






CROP

The next FARMMGR tool, CROP, is similar in concept to the
STOCKER option discussed above. CROP calculates returns received
from growing a crop. A return sensitivity analysis shows the
effect that different conditions will have on the returns.

The user supplies four pieces of information including the
expected selling price ($/unit, a unit could be bushels, lbs,
bales, cwt, etc.), the expected cost/acre (variable or total),
the expected yield (expressed in the same units as the selling
price) and the number of acres to be planted. The computer uses
this information to calculate the sensitivity table as shown by
Figure 12.



FIGURE 12. Sample CROP Return Sensitivity Analysis

C2: (F2) U 2.8 CMD READY

A B C D E F
-- - -- - - -- -- -- - -----------------------------------
2 I SELL PRICE ($/BU LBS Etc) 2.80 I EXPECTED COST/ACRE 220
3 YIELD (BU,LBS,Etc) 80 # OF ACRES 100
5
6 RETURN SENSITIVITY
7
8 SELLING PRICE
9
10 EXPECTED YIELD I 2.76 2.78 2.80 2.82 2.84
12
13 68 (3,232) (3,096) (2,960) (2,824) (2,688)
14 72 (2128) (1 984) (1 840) 1 696) (1 552)
15 76 (1,024) (872) (720) (568) (416)
16 80 80 240 400 560 720
17 84 1,184 1,352 1,520 1,688 1,856
18 88 2,288 2,464 2 640 2:816 2 992
19 92 3,392 3,576 3,760 3,944 4:128
20 -----------------------------------------------------------------


The sensitivity analysis is also helpful in determining
break-even prices. If you look at Figure 12 you can see that
when yields are 76 or less returns were negative for every
selling price analyzed.

Example:

Under the conditions shown by Figure 10, the return for this
crop at a yield of 80 and an expected selling price of $2.80 is
$400. What happens if the expected selling price increases while
the expected yield decreases? Enter <3.00> for the expected
selling price and <75> for yield. When the selling price is
$3.00 and the yield is 75 the returns increase from $400 to
$500.






HEDGE


FARMMGR's fifth tool, HEDGE, shows how hedging contracts in
the futures market affects returns as opposed to participating in
the cash market only. The user should already have a basic
understanding of how the futures market can be used to reduce
risk before using this decision making tool. For background
information refer to vanBlokland.

The user enters the futures contract price, the size of the
contract, brokerage fee ($/unit), basis, anticipated futures
buy-back price, expected cost/acre for producing the commodity
(variable or total) and the number of acres to be planted. The
computer calculates the cash market price (using the basis),
total commodity produced, break-even price, cash market return,
futures market return and the combined market return. In addi-
tion, a sensitivity analysis is calculated and displayed using
various contract buy-back prices and contract sizes. The sensi-
tivity analysis assumes that the basis remains constant, however,
this may not always be true in actual markets. Figure 13 shows
the returns and sensitivity analysis for an example hedge.






FIGURE 13. Sample HEDGE Analysis


C7: (F2) U 3.15 CMD READY

A B C D E F
1 HEDGING FUTURES MKT IVS.I CASH MKT SALES ONLY
3 FUTURES PRICE(SELL CONTRACT) 3.25 EXPECTED COST/ACRE 240
4 SIZE OF FUTURES CONTRACT 5000 NUMBER OF ACRES 100
5 BROKERAGE FEE ($/BU,LB,etc) 0.01 EXP. YIELD (BU,etc) 75
6 BASIS (DIF FUT & CASH PRICE) 0.25 EXP. CASH MKT PRICE $2.90
7 EXAMPLE FUT BUY-BACK PRICE 3.15 TOTAL PRODUCTION = 7500
8 ........................................ BREAK-EVEN PRICE $3.20
9 1 NET RETURN PER CONTRACT $450 NET RETURN-CASH MKT ($2,250)
10 NET RETURN BOTH MARKETS COMBINED .....------- -> ($1,800)<------
11
12 FUT PRICE BUY-BACK 2.95 3.05 3.15 3.25 3.35
13 EXP CASH MKT PRICE 2.70 2.80 2.90 3.00 3.10
14 ---- .....- .......- ............- ..----....--....--- --............-.-... .-
.' 15 QUANTITY CONTRACT NET RETURN BOTH --\/- MARKETS COMBINED I
16 5000 (2,300) (2,050) (1,800) (1,550) (1,300)
17 10000 (850) (1,100) (1,350) (1,600) (1,850)
18 20000 2,050 800 (450) (1,700) (2,950)
19 40000 7,850 4,600 1,350 (1,900) (5,150)
20 80000 19.450 12.200 4.950 (2.300) (9.550)








Example:


Let's assume that you are going to plant 100 acres of
irrigated corn and that you expect to get 75 Bu/Acre. You
estimate the production costs to be $240 /acre. You check with
your local broker and find that you can sell futures contracts
for $3.50. Should you hedge?

Enter <3.50> for the futures price, <5000> for the size of
futures contract (1 corn contract = 5000 bu), <.01> for the
brokerage fee and <.25> for the basis. Since you will eventually
sell your corn on the cash market you will need to buy back your
contract which you estimate that you can do at $3.40 /Bu.
Knowing that the buy-back price is $3.40 and the basis is $0.25
the computer calculates the cash market price to be $3.15. How
did you do?

The net return in the cash market is -$375. But because you
were able to buy back your corn contract for less than what you
sold it for you gained $450 in the futures market. The combined
effect from participating in both markets was a positive $75.
The gain in the futures market offset the loss in the cash mar-
ket. See Figure 14 for a sample printout of the HEDGE worksheet
using the example discussed above.


FIGURE 14. Example of a Hedging Analysis


C3: (F2) U 3.5 CMD READY

A B C D E F
1 HEDGING FUTURES MKT IVS. CASH MKT SALES ONLY
2 ........................................................................
3 FUTURES PRICE(SELL CONTRACT) 3.50 EXPECTED COST/ACRE 240
4 SIZE OF FUTURES CONTRACT 5000 NUMBER OF ACRES 100
5 BROKERAGE FEE ($/BU,LB,etc) 0.01 EXP. YIELD (BU,etc) 75
6 BASIS (DIF FUT & CASH PRICE) 0.25 EXP. CASH MKT PRICE $3.15
7 EXAMPLE FUT BUY-BACK PRICE 3.40 TOTAL PRODUCTION = 7500
8 ---------------------------------------- BREAK-EVEN PRICE $3.20
9 I NET RETURN PER CONTRACT $450 NET RETURN-CASH MKT ($375)
10 NET RETURN BOTH MARKETS COMBINED J -------------> $75 < --.----
12 FUT PRICE BUY-BACK 3.20 3.30 3.40 3.50 3.60
13 EXP CASH MKT PRICE 2.95 3.05 3.15 3.25 3.35
14 ..............- .....-.- .... ... .--- ---...- ...--..- .........--- ...--......
15 QUANTITY CONTRACT NET RETURN BOTH --\- MARKETS COMBINED
16 5000 (425) (175) 75 325 575
17 10000 1,025 775 525 275 25
18 20000 3,925 2,675 1,425 175 (1,075)
19 40000 9,725 6,475 3,225 (25) (3,275)
20 80000 21,325 14.075 6.825 (425) (7.675)





STATEMENTS


The STATEMENTS option of FARMMGR is the largest and most
complex of the decision tools and requires the user to have a
more thorough understanding of Lotus. Because of its complexity
the STATEMENTS option uses multi-tiered menus. Refer back to
Figure 2, on page 4. Several sections are available under the
STATEMENTS option including budgets, depreciation schedules, loan
analysis, beginning cost basis balance sheet, cashflow, ending
cost basis balance sheet, income statement, market value balance
sheets, owner equity statement and financial ratios, which work
together to produce a complete financial picture. In addition
several functions are available including graphing routines,
2 choices of recalculation mode, hard copy print routines and a
save/exit option. Each major section will be discussed, but
first let's look at how FARMMGR starts the STATEMENTS option.

Year and Name

When you select the STATEMENTS option from the main menu you
are asked to enter the year and name for the analysis, see Figure
15. Type in the appropriate information and press a "null
return".
FIGURE 15. STATEMENTS Start-up

fMU: (PU) U VI LMCOD READ
E F G H I J
61 ****** ENTER THE YEAR AND NAME OF ANALYSIS ******
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
71
W7 FOR: JOHN Q. PUBLIC FARMER
74
75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
79,
80

When the STATEMENTS menu appears at the top of the monitor,
see Figure 16, you are ready to select any of the sub-options.

FIGURE 16. STATEMENTS Menu

E61: CMD MENU
BUDGETS RECOVERY LOANS START BAL. CASHFLOW ENDING BAL. INCOME OTHER
Go to. the Budgets menu
E F G H I J
61
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
7W FOR: JOHN Q. PUBLIC FARMER
74
75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Flortlda
79
80









BUDGETS

The BUDGETS option helps you to develop enterprise budgets
for livestock and crops. Let's look at the livestock budget
first. The livestock budget has two sections, one labeled
Livestock and another labeled Expenses. Because of the amount of
information needed for livestock budgets this budget is divided
into two sections for completeness and simplicity. Figure 17
shows a sample of the first section labeled Livestock. The user
enters production information here including the animal type, its
weight in pounds, and the price per hundred weight. To move over
to the monthly columns press a null return. These columns are
used to record the timing and number of head sold. The user may
enter up to 12 animal types including breeding stock.




FIGURE 17. Sample Livestock BUDGET Option


TS: U 'Steers CMD READY

T U V U X Y Z AA AB
1 LIVESTOCK PRODUCTION # of Hea
3 Animal Type Total VaL/H Lbs/H S/CwtI JAN FEB MAR
4 ................. .... .. ..... ...... . .... .... ...
5 Steers S19,663 303 500 60.50
6 Heifers $18,850 290 500 58.00
7 Fed Steers S13,680 456 800 57.00 30
8 SO 0
9 $S 0
10 SO 0
11 $0 0
12 s0 0
13 Breeding stock:
14 Cull cous $16,500 550 1100 50.00
15 Bulls $4,620 770 1400 55.00
16 s0 0
17 SO 0
18 Other SO 0
19 ........
20 TOTAL LVST. SALES $73.313



You will notice that as you make new entries and changes to
this worksheet that the values are not automatically recalcu-
lated. This has been done for the sake of speed. Each recalcu-
lation takes about 20 seconds. If you are entering several
values the time delay would become intolerable. After you have
made all the changes to your worksheet press a null return to
return to the STATEMENTS menu. Select the last option, OTHER,
and then select the Calc option. Press enter to choose the
Manual calculation and all your worksheets within STATEMENTS will
be recalculated. Sensitivity analysis can be done by choosing
the automatic option, which will recalculate the analysis each
time a new entry is made. Advanced users may find this particu-
lar menu method cumbersome, they should refer to the section
labeled "Miscellaneous Notes".











The EXPENSES option is associated with the livestock produc-
tion information that you entered for the Livestock option. The
expense categories used in this budget are similar to the IRS
Schedule F used for income tax purposes. The user may enter any
unit name that is appropriate, however, FARMMGR will truncate the
name to ten characters so we suggest using abbreviations. For
example, you may want to enter the units for labor hired as
dollars per hour per herd. This could be abbreviated to:
$/HR/HRD. Enter the number of hours per herd under the monthly
columns, enter the number of herds under the #Units column and
enter dollars per hour under the Price column. Using this method
line 24 of Figure 18 would indicate that in March, 200 hours were
used for 1 herd and the price was $4.00 per hour.



FIGURE 18. Sample Expense BUDGET Option


V24: (FO) U 'S/hr/herd CMD READY

T U V W X Y Z AA AB
21 . ..... .... ...
22 LVST OPER. EXPENSES: Units #Units Price JAN FEB MAR
23
24 Labor hired $3,600 S/hr/herd 1 4.00 200
25 Repairs machinery $5,000 $/$/herd 1 1.00 1100 200 300
26 Repairs buildings $1,800 S/S/herd 1 1.00 400 400
27 Rent/Leases $1,200 S/ac/herd 1 12.00 100
28 Seed $8,500 S/Lb/ac 100 1.00 35
29 Fertilizer & Lime S8,400 S/Lb/ac 100 0.70 30
30 Chemicals $9,000 $/lb/ac 100 3.00 30
31 Custom machine hire $660 $/$/herd 1 1.00
32 Feed Expense $2,700 $/$/herd 1 1.00 700 100 400
33 Lvst exp.(vet&other) $5,100 S/head/hea 170 10.00 1
34 Gas, fuet, oil $6,120 S/S/herd 1 1.00 600
35 Mktg & trans. exp. $800 $/S/herd 1 1.00
36 Other $400 S/$/herd 1 1.00 400
37 TOTAL LVST EXPENSE $53,280
38
39 NET RETURNS LVST $20,033
40



Pasture expense can be handled two different ways. It can
be entered as an expense to raising livestock. Or it can be
treated as a separate crop with an individual budget prepared
under the Crop options.

The Crop options are similar to the Livestock options with
only a few differences. First, both production and expense
information are entered on one screen. Second, new column head-
ings have been added: these will be discussed below. And third,
two expense items related to livestock have been replaced with
two new expense items that relate to crops.










A sample of a corn budget using the Crop#l option is shown
in Figure 19. Crop#l through Crop#5 options operate identically.
The user enters values in the #Acre, Un. and S/Unit columns for
rows 43 and 46-58. To move to the monthly columns press a null
return. Column U, #Acres, refers to the total number of acres to
be planted in this crop. Column V, Un., refers to the units of
measure for each row. Column W, $/ac, is calculated by the
computer and is only valid if quantities in the monthly columns
are entered as units per acre. Column X, S/Unit, refers to the
price received per the unit specified in column V.





FIGURE 19. Sample Crop#1 BUDGET Option


T43: U 'CORN (BU) CMD READY

T U V W X Y Z AA AB
41 CROP PRODUCTION #1 Total #Acres Un. S/ac $/Unit JAN FEB MAR
42 ......... ...... .. ... ..... .... .. -...
43 CORN (BU) $22,000 100 $/BU 220 2.75
44
45 CROP OPER. EXPENSES: Acres Un. S/ac $/Unit
46 Labor hired $2,000 100 $/S 20 4.00 1.0
47 Repairs machinery $2,000 100 $/$ 20 1.00 5.0 2.0 2.0
48 Repairs buildings $1,200 100 $/S 12 1.00 4.0 4.0
49 Rent/Leases $800 100 $/$ 8 1.00 0.0 8.0
50 Seed $1,150 100 $/lb 12 1.15 0.0 0.0 10.0
51 Fertilizer & time $1,680 100 S/lb 17 1.20 0.0 0.0 10.0
52 Chemicals $6,500 100 S/gi 65 1.00 0.0 0.0 25.0
53 Custom machine hire $600 100 $/$ 6 1.00 0.0 0.0 0.0
54 Supplies $2,100 100 $/S 21 1.00 0.0 5.0 4.0
55 Storage & drying $200 100 $/S 2 1.00 2.0 0.0 0.0
56 Gas, fuel, oil $1,008 100 $/gl 10 1.12 0.0 0.0 3.0
57 Mktg & trans. exp. $100 100 $/$ 1 1.00 0.0 0.0 0.0
58 Other $300 100 $/S 3 1.00 0.0 0.0 0.0
59 TOTAL CROP EXPENSE $19,638 $196
60 NET RETURNS-CROP #1 $2.362 $24



For example, line 50 of Figure 19 reads: in March 10 pounds
of seed were purchased per acre. Each pound cost $1.15, there-
fore the cost per acre was $12 and the total cost for 100 acres
was $1,150. (The discrepancy between $12/acre times 100 acres
and a total cost of $1,150 is due to rounding error when the
price per pound, $1.15 was multiplied by the pounds applied per
acre, 10. Since the $/ac column only allows integer numbers the
computer displays $11.50 as $12.)



Total crop expense and net returns are shown in lines 59 and
60, respectively. Column T reflects values based on the total
number of acres planted while column W reflects values on a per
acre basis. Remember that column W is only valid if every
monthly quantity value is entered in units per acre.









RECOVERY

The RECOVERY option lets you calculate depreciation for
machinery, equipment, livestock, buildings and farm improvements
based on the Accelerated Cost Recovery System (ACRS). There are
two methods for computing depreciation under the ACRS.

For this decision tool these methods have been assigned a
number. Method "1" is the straight-line method and "2" is the
accelerated option. The life categories for the accelerated me-
thod are 3, 5, 10 and 15 years. FARMMGR will force your property
life to the closest younger life category.

For example, if you enter a life of 8 years it will calcu-
late ACR for 5 year property. For a more detailed explanation of
the ACRS refer to the "Farmers Tax Guide" published by the Inter-
nal Revenue Service.

Two worksheets are available for the RECOVERY tool. These
are shown as menu choices on your monitor when you select the
RECOVERY option from the STATEMENTS menu, see Figure 20. Both
the Machinery/Equipment and Livestock & Buildings/Improvements
options require the same type of information.

The user will enter the name of the item to be depreciated,
the month and year in which the asset was purchased, the useful
life or life category, the original purchase price, the market
value at the end of the budget year and the ACRS method number
"1" or "2".





FIGURE 20. Sample RECOVERY Option Menu


E61: CMD MENU
MACHINERY/EQUIPMENT LIVESTOCK BUILDINGS/IMPROVEMENTS Return
E F G H I J
61
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER
73
74
75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
79
80











Figure 21 shows a sample screen from the Machinery/Equipment
worksheet. Notice that the computer will calculate the ACR, or
depreciation, to be claimed for the budget year, the accumulated
ACR and the investment tax credit. The tax credit is only
calculated if the asset was purchased during the current budget
year. (Please see the note on investment tax credits at the end
of this section.)

Up to 30 items can be entered on this worksheet. To allow
more items to be entered you may group assets purchased in the
same year that have the same useful life together as one entry.


FIGURE 21. Sample Machinery/Equipment RECOVERY Screen

AN6: U 'CHEVY TRUCK CMD READY

AM AN AO AP AQ AR AS AT AU AV AW
1 COST RECOVERY
2
3 MACHINERY/EQUIPMENT Purch. Purch. MKT ACR ACR ACCUM Tax
4 Nun NAME Yr Nth Life Price Value Meth 83 ACR Credit
5 *... ................------- -- ---- ----- ---- --- -..... .....- ......------ -----.....
6 1 CHEVY TRUCK 82 6 5 11000 7000 1 2200 3300 0
7 2 FORD TRACTOR 80 3 5 30000 6000 1 6000 21000 0
8 3 COMBINE 80 8 5 30000 10000 2 6300 23700 0
9 4 FERTILIZER SPREADER 83 3 5 1000 700 1 100 100 100
10 5 0 0 0
11 6 0 0 0
12 7 0 0 0
13 8 0 0 0
14 9 0 0 0
15 10 0 0 0
16 11 0 0 0
17 12 0 0 0
18 13 0 0 0
19. 14 0 0 0
20 15 0 0 0

AN25: U 'PLANTER CMD READY

AM AN AO AP AG AR AS AT AU AV AU
21 ...CONTINUED C O S T R E C O VE R Y
22 MACHINERY/EQUIPMENT Purch. Purch. MKT ACR ACR ACCUM Tax
23 Nun NAME Yr Mth Life Price Value Meth 83 ACR Credit
24 -------------- -- --- ---- ----- ------ --- -. --- ---- ----
25 16 PLANTER 82 7 5 4000 3000 2 880 1480 0
26 17 0 0 0
27 18 0 0 0
28 19 0 0 0
29 20 0 0 0
30 21 0 0 0
31 22 0 0 0
32 23 0 0 0
33 24 0 0 0
34 25 0 0 0
35 26 0 0 0
36 27 0 0 0
37 28 0 0 0
38 29 0 0 0
39 30 0 0 0
40 TOTAL MACHINERY COST RECOVERY 76000 26700 15480 49580 100










Figure 22. shows a sample screen from the Livestock &
Buildings/Improvements worksheet. You can see that the same type
of information is required here as was required for the Mach-
inery/Equipment worksheet. Up to fifteen items can be entered
for breeding livestock and for buildings and improvements.

FIGURE 22. Sample Livestock & Buildings/Improvements
RECOVERY Screen


AN4D: U 'UW MHIKU UUU,) %.M1u M
AM AN AO AP AQ AR AS AT AU AV AW
41 COST RECOVERY
42 BREEDING LIVESTOCK Purch. Purch. MKT ACR ACR ACCUM Tax
43 Num NAME Yr Mth Life Price Value Meth 83 ACR Credit
45 31 COW HERD (100HD) 81 3 5 30000 30000 2 6300 17400 0
46 32 0 0 0
47 33 0 0 0
48 34 0 0 0
49 35 0 0 0
50 36 0 0 0
51 37 0 0 0
52 38 0 0 0
53 39 0 0 0
54 40 0 0 0
55 41 0 0 0
56 42 0 0 0
57 43 0 0 0
58 44 0 0 0
59 45 0 0 0
60 TOTAL LIVESTOCK 30000 30000 6300 17400 0


AN65: U 'BARN CMD READY
AM AN AO AP AQ AR AS AT AU AV AW
61 C OST RECOVERY
62 BUILDING/IMPROVEMENTSPurch. Purch. MKT ACR ACR ACCUM Tax
63 Nun NAME Yr Mth Life Price Value Meth 83 ACR Credit
65 46 BARN 78 1 15 10000 9000 1 667 3666 0
66 47 0 0 0
67 48' 0 0 0
68 49 0 0 0
69 50 0 0 0
70 51 0 0 0
71 52 0 0 0
72 53 0 0 0
73 54 0 0 0
74 55 0 0 0
75 56 0 0 0
76 57 0 0 0
77 58 0 0 0
78 59 0 0 0
79 60 0 0 0
80 TOTAL BUILDINGS/IMPROVEMENTS 10000 9000 667 3666 0


Remember that these worksheets will not automatically recal-
culate each time a value is entered. Use the Calc facility under
the Other option of the STATEMENTS menu to recalculate the
worksheets.

The recovery/depreciation tools are designed to aid in
decision making and are not suitable for income tax purposes.
For example, when an investment tax credit is taken for income
tax purposes under current tax laws, you must deduct an amount
equal to 50% of the tax credit from the purchase price to deter-
mine the initial depreciable basis. The worksheets, however, do
not consider this when calculating the allowable depreciation.
In addition, taking advantage of Section 179, the expense
write-off allowance, will also affect the initial depreciable
basis. You can, however, adjust the purchase price to reflect
the ACR basis.


A/UI







LOANS

The LOANS option calculates loan schedules for amortized and
unamortized loans. The information generated with the LOANS
option is used for the starting and ending balance sheets.
Because the amortized loan schedule is the easiest to understand
we will discuss that schedule first.

The amortized schedule calculates equal monthly payments for
a loan when the following information is provided: the name of
the item that the loan is for, the month and year the item was
purchased, the purchase price, the annual interest rate of the
loan and the life of the loan in months. The monthly payment and
the beginning principal due for the budget year will be calcu-
lated and displayed, see Figure 23. The ending principal for the
current budget year and for the next year are also calculated.
To view these two additional columns see Appendix B and refer to
the Advanced Lotus Users Section. Up to 10 intermediate loans
and three long-term loans can be evaluated.






FIGURE 23. Sample Amortized Loan Schedule


AY4: U 'FORD TRACTOR CMD READY

AX AY AZ BA BB BC BD BE BF BG
1 AMORTIZED INTERMEDIATE LOANS RATE LIFE MONTHLY BEG.PRIN.
2 # NAME YR MTH AMOUNT (%) mths PAYMENT 1983
3 .. ..............-.- ... ............ ..... ... ..... ......
4 1 FORD TRACTOR 80 4 $28,000 12.90% 48 750 10336
5 2 CHEVY PICKUP 82 8 $10,000 11.95% 48 263 9166
6 3 FERT. SPREADER 83 3 $1,000 12.00% 48 26 0
7 4 equipment 79 2 $60,000 12.00% 48 1580 1564
8 5 0 0
9 6 0 0
10 7 0 0
11 8 0 0
12 9 0 0
13 10 0 0
14 SUBTOTAL 2619 21066
15 LONG-TERM LOANS
16 1 LVST LOAN 79 1 $30,000 12.00% 60 667 7511
17 2 mortgage 78 1 $100,000 12.00% 360 1029 97663
18 3 0 0
19 SUBTOTAL 1696 105174
20 TOTAL 4315 126240










The unamortized loan schedule is a bit more complicated than
the amortized loan schedule. You are allowed to analyze 3 loans:
2 intermediate and 1 long-term. See Figure 24 for a sample of an
unamortized loan analysis.






FIGURE 24. Sample Unamortized Loan Schedule


BL3: U 'COUNTY PCA


CMD READY


SJ BK BL BM
Intermediate Loan # 1
Loan number: 1
Name of Loan: COUNTY PCA
Interest Rt.: 12.00%
Actual PCA Rt: 13.33%
12 Mths Amortization= 1789
MTH Ending Payments Curr.Int.
1 0 244
2 0 272
3 0 278
4 0 284
5 0 291
6 0 297
7 0 304
8 0 310
9 5,000 317
10 0 218
11 0 223
12 0 228


BN BO


Acc.


If Loan initiated this year,
which month 7:
PCA Stock (%): 1
Prin. Remain.: 20,00
Prev. Int.Due: 2,00'
Int. Principal ENDING BAL
2,244 20,000 22,24
2,517 20,000 22,51
2,795 20,000 22,79'
3,079 20,000 23,07
3,370 20,000 23,371
3,667 20,000 23,66
3,970 20,000 23,971
4,281 20,000 24,28
0 19,598 19,59(
218 19,598 19,81<
440 19,598 20,03!
668 1Q 598 20 26&


0
0%
0
0

4
7
5
9
0
7
0
1
8
6
9
B
5


For each type of loan you will need to enter the name of the
loan, the annual interest rate, the month the loan was initiated
if it was in the current budget year, the percent of stock re-
quired, the principal outstanding at the beginning of the current
budget year and the accrued interest due at the beginning of the
current budget year. If the loan was initiated prior to the
current budget year enter a zero for the initiated month. Any
payment made during the budget year should be entered next to the
month in which it was paid. You may also determine the size of
amortized payments using a specific number of months in cell BJ6,
see Figure 24.


66 1958 2 6











START BAL

The START BAL option calculates the beginning cost basis
balance sheet. FARMMGR fills in the majority of the balance
sheet using values calculated in other schedules within STATE-
MENTS. The user is responsible for supplying values in high
intensity or color contrasting cells.

The balance sheet is divided into 2 screens. The first
screen, illustrated by Figure 25, records current assets and
current liabilities.









FIGURE 25. Sample First Screen of Beginning Balance Sheet


88: (,0) U 2387 CMD READY
A B C D
1
2 BALANCE SHEET- DECEMBER 31, 1982
3
4 ASSETS LIABILITIES
5 .............................. ...........................................
6 CURRENT ASSETS I DEBIT | CURRENT LIABILITIES I CREDIT
7 ---.. .. ..------- --------o ----------.....------ ------ ------------------------.
8 CASH (checking...) 2,387 ACCOUNTS PAY. 3,000
9 SAVINGS ACCT/TIME CERT 50,000 OPERATING LOAN 10,000
10 HEDGING ACCT EQUITY 2,000 ACCRUED INT. (Oper.Ln) 0
11 NOTES & ACCTS RECEIVABLE 6,000 INTMED. LOANS (Due 12mo) 10,967
12 LIVESTOCK RAISED FOR SALE 4,000 LONG-TERM LNS (Due 12mo) 7,451
13 CROP INVENTORY 5,000 REAL ESTATE TAX LIAB. 1,000
14 SUPPLIES/FEED INVENTORY 2,000 RENT & LEASE PAYMENTS 1,000
15 OTHER CURRENT ASSETS 0 OTHER 0
16 ................................... ......................... ..
17 TOTAL CURRENT ASSETS 71,387 TOTAL CURRENT LIAB. 33,418
18 ----------..--- ---. --------... .---..------ -------------------------
19 ..---------------------------------- -----------------------............
20











The second screen of the beginning balance sheet records
intermediate and fixed assets and intermediate and long-term
liabilities, see Figure 26.






FIGURE 26. Sample Second Screen of Beginning Balance Sheet


024: (,0) U 100

A
21 ................. .....
22 INTERN. & FIXED ASSETS
23 ..........................
24 MACHINERY EQUIP (CR Sch.)
25 BREEDING STOCK (CR Sch.)
26 RETIREMENT ACCTS.
27 OTHER INTERIM. ASSETS
28 ........................
29 TOTAL INTERMEDIATE ASSETS
30 .....................
31 NOTES RECEIVABLE
32 FARM LAND (cost:non-depr.)
33 BUILD./IMPROVE. (CR Sch.)
34 OTHER FIXED ASSETS
35 ..........................
36 TOTAL FIXED ASSETS
37 ..........................
38 TOTAL ASSETS


40 ............................. .................................. .........
.................................................................
40 --- -- ----------


CMD READY

C D
...........- ............. ........-...


B


DEBIT

40,900
18,900
10,000
0

69,800

0
200,000
7,001
0

207,001

348,188


INTERIM. & LONG TERM LIAB.

NOTES PAYABLE
INTERMEDIATE LOANS
OTHER INTERMEDIATE LIAB.

TOTAL INTERMEDIATE LIAB.
.-...................
LONG TERM LOANS
OTHER LONG TERM LIAB.

TOTAL LONG TERM LIAB.

TOTAL LIABILITIES
NET WORTH

NET WORTH + LIABILITIES


CREDIT

100
32,099
0

32,199

147,723
0

147,723

213,340
134,848

348,188


The beginning balance sheet is a much abbreviated version of
the actual balance sheet that would be done for a lending insti-
tution. The idea here was to keep the sheet as small as possible
while retaining the essence of the balance sheet. For a complete
discussion on balance sheets and income statements for the farm
refer to Frey and Klinefelter, "Coordinated Financial Statements
For Agriculture".











CASHFLOW

The CASHFLOW option generates a month-by-month detailed
cashflow for the budget year. This option is divided into 3
screens and, as with the beginning balance sheet, only the high
intensity or color contrasting cells accept data. Use the right
and left arrows to scroll the month columns from Jan to Dec.

The first screen, as shown by Figure 27, requests the mini-
mum beginning cash balance. The remainder of the sheet contains
information on operating receipts and other cash inflows and
calculates the total cash available.





FIGURE 27. Sample First Screen of CASHFLOW


12: (FO) U 5000
E
2 CASH FLOW STATEMENT -
3
4
5 Beginning Cash Balance
6 OPERATING RECEIPTS:
7 Crops & feed
8 Livestock & poultry
9 Custom work
10 Govt. payments
11 Hedging acct. withdrawals
12 OTHER INFLOWS:
13 Breeding Stock Sales
14 Mach Bld,Land Sale(sub.BV)
15 New Loans
16 Owner Contributions
17 Interest & Hedge Income
18 Inflows from savings
19
20 TOTAL CASH INFLOW
91 n2PCdATIlMR FXPFN~S.


CMD READY
F G H I J
minimum Beg. Cash Balance 5000
TOTAL JAN FEB MAR APR
2,387 2387 5000 5000 5000
36,750 0 0 0 0
52,193 0 0 13680 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0


21,120 0 0
0 0 0
11,000 0 0
0 0 0
0 0 0
0 0 0
123 450 2387 5000
TOTAL JAM FFR


19680 5000
MAr ADD


The second screen, shown by Figure 28, contains information
pertaining to operating expenses and calculates the total cash
required to meet operating expenses.


FIGURE 28. Sample Second Screen of CASHFLOW


G36: (FO) U 0
E
21 OPERATING EXPENSES:
22 Labor hired
23 Repairs machinery
24 Repairs buildings
25 Rent/Leases
26 Seed
27 Fertilizer & time
28 Chemicals
29 Custom machine hire
30 Supplies/Feed
31 Lvst exp.(vet&other)
32 Storage & drying
33 Gas fue, oil
34 Marketing & trans. expense
35 Other
36 Taxes (RE & Property)
37 Insurance
38 Utilities
39 Other (unallocated)
40 TOTAl cASH nPFRATING EXP.


CMD READY
F G H I J
TOTAL JAN FEB MAR APR
6,400 0 0 1200 0
8 200 1600 400 500 700
3,300 800 800 0 0
2,800 0 2800 0 0
10,800 0 3500 1150 0
10,800 0 0 3300 2580
16 500 0 0 11500 2000
1 860 0 0 0 0
6 100 700 600 800 550
5;500 1900 0 0 0
8,248 0 0 936 704
900 0 0 0 0
1,100 400 0 0 300
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
82.508 5.400 8.100 19.386 6.834


~ . .. 1 _ ;nrr -*****---** -- *- i- .. __ ^ ... *


_ _I_ __ ______ __ ______ _____ ___







The third screen, shown by Figure 29, includes information
for purchases and other outflows and calculates the total cash
requirements. In addition, loan activity is recorded, including
new borrowing and principal and interest payments of operating
loans.









FIGURE 29. Sample Third Screen of CASHFLOW


G42: (FO) U 0


CMD READY


E F
PURCHASES & OTHER OUTFLOWS TOTAL
Feeder livestock
Machinery & equipment 1,0
Breeding livestock
Buildings and improvements
Land purchases
Hedging acct. deposits
Owner withdrawals
Outflows to savings
Outflows to retirement acc
Inter & Long Term Loan Pay 51,3
TOTAL CASH OUTFLOW 134,8
Ending cash bat. w/o loan
OPERATING LOAN:
Operating loans needed 76,51
Interest pay. (oper. loan) 3,8:
Principal pay.(oper. Loan) 56,3;
Ending cash balance 501
ACCRUED INTEREST (Beg Mth.)
OPERATING LOAN BALANCE (End Mth.)


0
00
0
0
0
0
0
0
0
49
57

80
35
37
00


G H I
JAN FEB MAR
0 0 0
0 0 1000
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
4289 2709 2735
9,689 10,809 23,121
-7302 -5809 -3441
Interest %: 15.45%
12302 10809 8441
0 0 0
0 0 0
5000 5000 5000
0 287 713
22302 33111 41552


J
APR
0
0
0
0
0
0
0
0
0
2735
9,569
-4569

9569
0
0
5000
1248
51121












ENDING BAL

The ENDING BAL option is identical to the START BAL option
except, of course, that it is for the end of the budget year.
Because of this the user will enter even less information than
for the beginning balance sheet. Figures 30 and 31 show the
first and second screens of the ending balance sheet. The high
resolution or color contrasting cells represent the values that
the user supplies.




FIGURE 30. Sample First Screen of Ending Balance Sheet


D48: (,0) U 2500 CMD READY
A B C D
41
42 BALANCE SHEET -DECEMBER 31, 1983
43
44 ASSETS LIABILITIES
45 ......................................................................
46 CURRENT ASSETS DEBIT CURRENT LIABILITIES I CREDIT
48 CASH (checking...) 5,000 ACCOUNTS PAY. 2,500
49 SAVINGS ACCT/TIME CERT 50,000 OPERATING LOAN 12mns. 30,242
50 HEDGING ACCT EQUITY 2,000 ACCRUED INT. (Oper.Ln) 967
51 NOTES & ACCTS RECEIVABLE 8,000 INTMED. LOANS (Due 12mo) 5,576
52 LIVESTOCK RAISED FOR SALE 3,000 LONG-TERM LNS (Due 12mo) 1 396
53 CROP INVENTORY 4,500 REAL ESTATE TAX LIAB. 1,100
54 SUPPLIES/FEED INVENTORY 1,500 RENT & LEASE PAYMENTS 1,000
55 OTHER CURRENT ASSETS 0 OTHER CURRENT LIABILITY. 0
56 -....... ............... -- ....................... .......
57 TOTAL CURRENT ASSETS 74,000 TOTAL CURRENT LIAB. 42,782
58
58 - --***-.... ... ... -......--- ----.... --.-..- -------....- --- -.-
59 .......
60




FIGURE 31. Sample Second Screen of the Ending Balance Sheet


064: (,0) U 200 CMD READY
A B C D
62 INTERIM. & FIXED ASSETS DEBIT INTERIM. & LONG TERM LIAB. CREDIT
63 ............................
64 MACHINERY EQUIP (CR Sch.) 26 420 NOTES PAYABLE 200
65 BREEDING STOCK (CR Sch.) 12,600 INTERMEDIATE LOANS 34,438
66 RETIREMENT ACCTS. 10,000 OTHER INTERMEDIATE LIAB. 0
67 OTHER INTERM. ASSETS 0------------- ---- -----
68 ---- -----------................. . TOTAL INTERMEDIATE LIAB. 34,638
69 TOTAL INTERMEDIATE ASSETS 49,020 ............... ....-.........
70 ....- .............................. LONG TERM LOANS 143,176
71 NOTES RECEIVABLE 1,000 OTHER LONG TERM LIAB. 0
72 FARM LAND (cost:non-depr.) 200,000 -------- -*-----. --. .........
73 BUILD./IMPROVE. (CR Sch.) 6,334 TOTAL LONG TERM LIAB. 143,176
74 OTHER FIXED ASSETS 0 .................................
75 .......................... ......... TOTAL LIABILITIES 220,596
76 TOTAL FIXED ASSETS 207,334 NET WORTH 109,758
77 --- ....-------.. ........ .- ........... ..... ......... .".......
78 TOTAL ASSETS 330,354 NET WORTH + LIABILITIES 330,354
80 ------. --------------.... ------ -..... .................................











INCOME


The INCOME option constructs
the beginning and ending balance
statement requires two screens as
below.


FIGURE 32. Sample First Screen of


198: (,0) U 0


an income statement,
sheets together. The
shown by Figures 32


linking
income
and 33


Income Statement


CMD READY


E F G
INCOME STATEMENT- FOR YEAR 1983
REVENUES
CROPS
,cash sales 36,750
inventory change (500)
LIVESTOCK & POULTRY SALES
cash sales 52,193
inventorychange (1,000)
CAPITAL SALES (gain a 40%)
breeding stock 21,120
,*Mach,Bld,Land Sale (net of BV) 0
CUSTOM WORK: CASH
GOVT. PAYMENTS
INTEREST (Sav,Retire) & HEDGING INCOME
OTHER
ADJUSTMENTS IN RECEIVABLES


H I J

Accrual Cash
.. ..... .. ....


36,250

51,193


36,750

52,193


21,120 21,120
0 0
0 0
0 0
0 0
3,000 N/A


FIGURE 33. Sample Second Screen of Income


H116: U '


Statement


CMD READY


E F
101 GROSS REVENUE
102 Less livestock purchased for resale
103 Less feed expense
104 VALUE OF FARM PRODUCTION
105 less CASH OPER EXPS (cashflow sch.)
106 Less INTEREST EXPENSE
107 GROSS MARGIN
108
109 OTHER EXPENSES
110 ASSET ADJ. (sup.,prepaids,& other)
111 PAYABLES ADJ. (taxes,rent,payroll)
112 COST RECOVERY:
113 Machinery & equip.
114 Breeding Livestock
115 Buildings/Improvements
116
117 NET FARM INCOME
118 Capital Gain Adj. (60% nontaxable)
119
12n TAYABRIF IkNmMF(l n S -FARM OPERATIONS


G H I J
111,563 110,063
(0) (0)
(2,700) (2,700)
108 863 107 363
(79 808)(77,108)
(31, 98)(29,707)
(2,443) 547

(500) N/A
300 N/A


15,480
6,300
667


(22,447)(22,447)
(25 090)(21,900)
12:672 12,672
r73 762)(34 572)


'IUV ,


120-TAXAMI : INi-ME('OqS'-FARM OPERATIONS


f-7 7 -1f4









Because most of the information for the income statement
comes from other schedules the user is confronted with only one
empty cell, the category "Other". Whatever value the user is
tempted to enter at this location, should be examined carefully.
Most likely it belongs in a previous schedule, thus maintaining
the income statement link between the balance sheets.

This particular income statement makes an adjustment to net
farm income that considers capital gains from the sale of farm
assets. Under current tax laws only 40% of capital gains real-
ized from assets held at least one year are taxable. Therefore,
the computer searches for any income derived from capital gains
and makes the adjustment to arrive at a taxable income value.










OTHER

The OTHER option on the STATEMENT menu includes several
sub-options and functions. These options and functions are dis-
played by a menu, as illustrated by Figure 34, and include the
market value balance sheet (Market), the statement of owner' s
equity (Equity), financial ratio analysis (Financial), a menu to
print or display graphs (Graphs), a mode of recalculation
selector (Calc), a menu to print hard copies of schedules and
analyses (Print) and an option to save all the STATEMENTS
worksheets with the numbers you have most recently entered
(Save/Exit).

FIGURE 34. OTHER Menu
E61: CMD MENU
MARKET EQUITY FINANCIAL GRAPH CALC PRINT SAVE/EXIT Return
Look at the market value balance sheets
E F G H I J
61
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER
73
74
75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
79
80


The first selection on the OTHER menu is Market. Market
calculates beginning and ending market value balance sheets.
There are two major differences between the market value balance
sheet and the cost basis balance sheet. One, the user enters the
value that land assets are expected to bring on the open market.
And two, the computer calculates the contingent tax liability on
marketable assets like machinery, breeding stock, land and build-
ings. The market value balance sheets are shown by Figure 35.


FIGURE 35. Market Value Balance Sheets
888: (FO) U 200000 CMD READY
A B C D
81 MARKET VALUE BALANCE SHEETS
82 (includes market values of machinery, breeding stock land, buildings
83 and their contingent tax Liability if liquidated)
84
85 BEGINNING BALANCE SHEET
86 Current Assets 71387 Current Liabilities 33418
87 Intermediate Assets 66 000 Intermediate Liabilities 32199
88 Land (market value) 206000 Long Term Liabilities 147723
89 Buildings & Other 9000 TOTAL Liabilities 213340
90 TOTAL Assets 346387 NET WORTH (MKT value) 133047
91 Contingent Income Tax 53219
92 NET WORTH (TAX value) 134848
93 ENDING BALANCE SHEET
94 Current Assets 74000 Current Liabilities 42782
95 Intermediate Assets 66700 Intermediate Liabilities 34638
96 Land (market value) 200000 Long Term Liabilities 143176
97 Buildings & Other 10000 TOTAL Liabilities 220596
98 TOTAL Assets 350700 NET WORTH (MKT value) 130104
99 Contingent Income Tax 52041
100 NET WORTH (TAX value) 109758











The second selection on the OTHER menu is Equity. Equity
computes both the tax value net worth and the market value net
worth, see Figure 36. All values for the statement of owner
equity come from the balance sheets and income statement, the
user does not need to enter any values.




FIGURE 36. Statement of Owner Equity


8118: (CO) U
A B
101 STATEMENT OF
102 -------.....--...-----...-------------------.....
103 BEG NET WORTH (TAX Value) $134,848
104
105 ADD:
106
107 OWNER CONTRIBUTIONS $0
108 NET FARM INCOME ($25,090)
109
110
111
112
113
114 LESS:
115 OWNER WITHDRAWALS $0
116
117 EQUALS $109,758
118
119 END. NET WORTH (TAX Value)S109,758
120 ................


CMD READY


C D
OWNER EQUITY
BEG NET WORTH(TAX Value) $134,848
ADD:
OWNER CONTRIBUTIONS $0
NET FARM INCOME ($25,090)
MARKET VALUE ADJUSTMENTS
MACHINERY & EQUIPMENT $280
BREEDING STOCK $17,400
LAND $0
BUILDING/IMPROVEMENTS $2,666
LESS:
OWNER WITHDRAWALS $0
EQUALS $130,104
END NET WORTH(Mkt Value) $130,104
. ..... ....... o....................


Financial is the third choice on the OTHER menu and calcu-
lates liquidity, solvency, profitability and financial efficiency
ratios. All financial ratios are based on market values. Figure
37 shows an example of the financial ratio analysis. The N/A
means "not available". Because all the values needed to calcu-
late the ratios come from the balance sheets and income state-
ments the user does not need to enter any values.


FIGURE 37. Financial Ratio Analysis


AN82: U
AM AN AO AP AQ AR AS AT AU
81 FINANCIAL RATIOS (using market values)
82 LIQUIDITY BEG.
83 CURRENT RATIO = Current Assets/Current Liab = 2.14
84 CURRENT DEBT = Current Liab./Total Liab. = 0.16
85
86 SOLVENCY
87 LEVERAGE RATIO = Total Liab./Net Worth = 1.60
88 NET CAPITAL RATIO = Total Assets/Total Liab. = 1.62
89 EQUITY-VALUE RATIO= Net Worth/Total Assets = 0.38
90
91 PROFITABILITY
92 RETURN ON EQUITY = NET FARM INCOME/NET WORTH = -0.16
93 RETURN ON INVSTMT = Income + Interest/Total Assets = -0.15
94
95 FINANCIAL EFFICIENCY DUR
96 GROSS RATIO = Operating Exp./Value Farm Prod = N/A
97 TURNOVER RATIO = Value Farm Prod./Total Assets = N/A
98 DEBT SERVICING = Loan Payments/Value Farm Prod. = N/A
99 EXPENSE STRUCTURE = Loan Pay./Loan Pay. + Oper Exp = N/A
100


CMD READY
AV AW
ENDING
1.73
0.19

1.70
1.59
0.37

N/A
N/A
ING
0.72
0.31
1.04
0.59


100-










Graph


The next choice on the OTHER menu is Graph. This option
draws graphs on the monitor. A color graphics monitor is re-
quired for this option. If you have a nongraphics monitor and
select this option the computer will simply beep and return you
to the menu. The user can select any of the graphs from the
Graph submenu, see Figure 38.



FIGURE 38. Graph Submenu

E61: CMD MENU
CASHFLOW BALANCE INCOME CURRENT LEVERAGE PROFIT EFFICIENCY Return
Show this Graph G H J
61
62
63

67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
SIN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER
73
74
76 Developed by FARM Lab,
7 Food and Resource Economics Department
78 University of Florida
79
80




The graphs available are briefly described below.

Cashflow graphs cash available, cash required and
cash surplus (deficit) on monthly basis.

Balance graphs market value balance sheet data.
Income graphs accrual and cash income statement
information.

Current graphs beginning and ending current ratios.

Leverage graphs beginning and ending leverage
ratios.

Profit graphs two profitability ratios, return
on equity and return on investment.

Efficiency graphs several financial efficiency
ratios including the gross ratio,
turnover ratio, debt servicing ratio
and the expense structure ratio.

To print the graphs using a graphics printer and the PrintGraph
facility of Lotus see the section labeled "Miscellaneous Notes".







Calc


The fifth option on the OTHER menu is Calc. Calc lets the
user select the mode of recalculation, either manual or automa-
tic. The manual setting is the default setting for the entire
STATEMENTS worksheet.

When the recalculation mode is set to "Manual" the work-
sheets do not recalculate after a new entry has been made. To
recalculate the entire STATEMENTS worksheet takes approximately
20 seconds. When several entries are to be made this waiting
period can become a nuisance, thus the recalculation mode has
been set to "Manual". After you have entered all your data into
STATEMENTS exit the current work section and select the Calc
option. The Calc menu selection briefly explains the function of
the "Manual" choice, see Figure 39. When you select the "Manual"
option the entire STATEMENTS worksheet is recalculated. You can
now return to any STATEMENTS worksheet to view the new results.





FIGURE 39. Calc Submenu With "Manual" Option Description

E61: CMD MENU
Manual Automatic Return
Calculate the worksheet NOW and turn off the AUTOMATIC recalculation.
E F G H I J
61
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER

75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
79
80






If you decide that you want to immediately view the results
of any changes made in STATEMENTS select the "Automatic" option.
Now each time an entry is made the entire STATEMENTS worksheet
will automatically be recalculated.












When you have entered all the relevant information for
STATEMENTS you will probably want to print a hard copy of the
results. This can be accomplished by choosing the Print option
from the OTHER menu. As Figure 40 shows, you can print all the
reports available or selectively choose a single report. Samples
of all the reports available are provided in Appendix B.

FIGURE 40. Print Submenu


E61: CMD MENU
ALL CHOOSE Return
Print all the statements
E F G H I J
61

64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69"
70 IN YEAR: 1983
71
SFOR: JOHN Q. PUBLIC FARMER
74
75
Developed by FARM Lab
77 Food and Resource Economics Department
78 University of Florida
80


To selectively print reports choose the "Choose" option. A
menu of reports will be displayed, see Figure 41. You can now
select a single report to be printed. You can print the cash
flow analysis (Cashflow), the commodity budgets (Budgets), the
cost recovery schedules (Recovery), the loan schedules (Loan),
the beginning and ending cost basis balance sheets (Sheets), the
income statement (Income) or the market value balance sheet,
equity statement and financial ratios (Market).

FIGURE 41. Selectively Choose Reports

E61: CMD MENU
CASHFLOW BUDGETS RECOVERY(DEPR) LOANS SHEETS INCOME MARKET Return
Print the cashfLow statement
E F G H I J
61
62
63
64
65
66
67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69,
70 IN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER

75
76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
79
80










Save/Exit

To exit the STATEMENTS decision tool select the Save/Exit
from the OTHER submenu. You have 5 options as shown in Figure
42. These options are described below.

Cancel return to the OTHER submenu, no action taken.

Save Only save the most recently entered data and
return to the OTHER submenu.

Save & Exit save the most recently entered data and
return to the Main Menu.

Exit Only do not save any changes and return to the
Main Menu.

Year change the year for which the STATEMENTS
information applies. Returns to the STATEMENTS
menu.



FIGURE 42. Save/Exit Options

E61: CMD MENU
CANCEL SAVE ONLY SAVE & EXIT EXIT ONLY YEAR
Return to the previous menu
E F G H I J
63
64
63

67 BUDGETING AND FINANCIAL STATEMENT ANALYSIS
68
69
70 IN YEAR: 1983
71
72 FOR: JOHN Q. PUBLIC FARMER

76 Developed by FARM Lab,
77 Food and Resource Economics Department
78 University of Florida
80










OTHER


CHECKBOOK

The CHECKBOOK option of the OTHER submenu (do not confuse
'the major topic OTHER with the minor subtopic OTHER in the
STATEMENTS tool) reconciles the checkbook register with the bank
statement. This particular checkbook balancer was modified from
: a template presented in the July/August 1983 issue of AgriComp
magazine.

This tool is quick and easy to use and encourages monthly
checkbook reconciliation. To use CHECKBOOK enter the statement
date, the balance as shown on the bank statement, any applicable
service charges, and interest paid but not recorded. To properly
balance the checkbook, enter all checks written but not cleared
and all deposits 'made but not posted. The value in column C row
13 should be the balance shown in the checkbook register. See
Figure 43 for a sample checkbook balance.







FIGURE 43. Sample CHECKBOOK Reconciliation


C3: U "03/06


CMD READY


A B C


CHECKS


OK BALANCE


STATEMENT DATE: 03/06
BALANCE ON STATEMENT: 680.62
-OUTSTANDING CHECKS 176.48
*OUTSTANDING DEPOSITS 2000.00
ACTUAL NEW BALANCE 2504.14
+SERVICE CHARGE 1.00
*INTEREST 0.00
EQUAL TO OLD CHECKBOOK 2505.14
........-...
..-..--...-.


E F G
OUTSTANDING ITEMS
CHECK NO. OR
CHECKS DEP'S DEPOSIT DATE
65.00 1401
8.00 1407
25.00 1408
0.00 2000.00 APR 14
16.00 1412
13.79 1413
30.77 1414
17.92 0.00 1415
0.00 0.00




176.48 2000.00


*1
2
3
4
5
6
7
8
9
10
11
12
14


18
19
20


;


17 4a 2066..










ASSET

The ASSET decision aid calculates the net present value of
investing in a single capital asset. The user must enter the
list price of the asset, the individual tax bracket, the interest
rate charged on the loan, the expected rate of return from owning
the asset, the percent allowable investment tax credit and the
number of years the asset will be financed. See Figure 44 for a
sample ASSET worksheet with representative data. The computer
calculates the interest factor, the depreciation factor, the down
payment amount, the amount to be borrowed and the yearly princi-
pal and interest loan payments and the adjusted basis for
depreciation calculation.







FIGURE 44. Sample ASSET Decision Aid

C6: (F2) U 30000 CMD READY

A 8 C D E F a H
2 NET PRESENT VALUE OF CASH OUTLAYS TO PURCHASE CAPITAL ASSETS
5 *. .*-.**-. .-- ..- .. . ..-***..T.****** -**.*.... ****.*..... .. ...* ...
4
5 .... .... ................ DATA ............. .........................
6 Price 30000.00 List price of new asset
7 Tax Rate 0.25 Your tax bracket
8 Interest Rate 0.13 Interest rate paid
9 Rate of Return 0.11 Interest rate earned
10 Down Payment 0.10 Down payment
11 Invest. Tax Credit 0.08 Investment Tax Credit Rate
12 Years Financed 7 Life of loan (15 max w/o modification)
14 Interest Factor 0.884955
15 Depre Factor 0.900900 Assume a 5 year IRS cost recovery
16 -****..............................................**** *** ..** .....*....
17 Down Payments== 3000.00 Initial down payment, $
18 Borrowed=-"--= 27000.00 Amount borrowed, $
19 Yearty Payments 6104.99 Annual payment, principal & interest
20 30000 Adjusted Basis










The second page of the ASSET decision tool displays a
summary of relevant information including the total interest to'
be paid over the life of the loan, the amount of principal to be
repaid, the total cash outlays, the total depreciation to be
taken over the useful life, the amount of taxes saved by making
this investment and the net cash flows to be received. Finally,
the net present value of the asset is displayed, see Figure 45.



FIGURE 45. Sample ASSET Summary

A21: U '==auu=r= CMD READY

A B C D E F G H
21 taa=aaaaas=aIvII...aaa atai= .= a
22
23 =
24 SUMMARY OF TOTALS FROM WORKSHEET
25 ............ ........ .. .. .......
26 INTEREST $ 15734.94
27 DRINCIPAL $ 27000.00
28 OUTLAYS S 45734.94
29 DEPRECIATION $ 30000.00
30 TAXES SAVED $ 13833.74
31 NET CASH FLOW $ 31901.21
32
33 NET PRESENT VALUE $ 21256.38
34
36
37
38
39
40 .-



The last page of the ASSET worksheet shows a year by year
summary and total for the interest and principal amounts, the
remaining loan balance, the investment outlay, the depreciation
allowed, the taxes saved, the net cash flow and the current
year's net present value. See Figure 46 for a sample analysis.


FIGURE 46. Sample ASSET Yearly Summary

01: U CMD READY

0 R S T U V W X Y Z
1 DEPREC- TAXES NET CASH
2 YR DISC. INT. PRINT. BAL. OUTLAY :ATION SAVED FLOW NPV
4 0 1 27000 3000 2400 3000.00 3000.00
5 1 0.8849 3510 2595 24405 6105 4500 4403 1702.49 1533.78
6 2 0.7831 3173 2932 21473 6105 6600 2443 3661.83 2972.02
7 3 0.6930 2791 3314 18159 6105 6300 2273 3832.13 2802.02
8 4 0.6133 2361 3744 14415 6105 6300 2165 3939.82 2595.28
9 5 0.5427 1874 4231 10184 6105 6300 2043 4061.51 2410.31
10, 6 0.4803 1324 4781 5403 6105 0 331 5774.02 3057.03
11 7 0.4250 702 5403 0 6105 0 176 5929.41 2555.95
12 8 0.3761 0 0 0 0 0 0 .00 .00
13 9 0.3328 0 0 0 0 0 0 0.00 0.00
14 10 0.2945 0 0 0 0 0 0 0 .00 0.00
15 11 0.2606 0 0r 0 0 0 0 000 0.00
16 12 0.2307 0 0 0 0 0 0 0.00 0.00
17 130.2041 0 0 0 0 0 0 0.00 0.00
18 14 0.1806 0 0 0 0 0 0 0.00 0.00
19 15 0.1598 0 0 0 0 0 0 0.00 0.00
20 TOTAL 15735 27000 45735 30000 13834 31901.21 21256.38









MISCELLANEOUS NOTES


Printing Graphs

Each of the graphs discussed in the STATEMENTS tool can be
printed using the PrintGraph program included with the Lotus
program package. To print graphs using the most recently entered
data you must first view the graphs using the Graph option. This
must be done even if you do not have a graphics monitor, in which
case the computer will just beep and the disk drive activity
light will come on for a few seconds. To actually print the
graphs exit the FARMMGR program and select the PrintGraph option
from the main Lotus menu. When prompted remove the Lotus disk
from drive A and replace it with the PrintGraph disk.

From the PrintGraph menu choose the SELECT option. Follow
the instructions on the screen to mark the graphs that you would
like to print. Press the key when you are finished
making your selections. From the menu line select the GO
option. The graphs will now print. Samples of all the graphs
available are provided in Appendix C. To return to FARMMGR
remove the PrintGraph disk from drive A and replace it with the
Lotus disk. Select the 1-2-3 option.



Reserved Menu Choices

The menu choices reserved under the OTHER option are for
future versions of FARMMGR. These sections can also be used by
the more advanced Lotus users for .personal customization,
expansion or modification.


Advanced Lotus Users

A primary intent of the tools is to provide a starting
framework from which users may customize to better meet specific
needs and preferences. The person attempting to customize and/or
directly control the program should have advanced knowledge of
Lotus, especially concerning macros, menus and range names.

As was mentioned earlier in the STATEMENTS section, it can
be cumbersome to choose manual calculation, since under "Range
Input" the calc key {f9} only works while in edit. For advanced
users, it may be faster to break out of the macros (Ctrl)(Break),
at the time you wish to calc and press (f9). At this point you
are in full control, which will allow you move anywhere including
the protected cells, so you need to be careful. Holding down the
{Alt) key and pressing "M" will give control back to the macros
and bring up the main menu.






Using this same {Ctrl}{Break} is the starting point for
customizing the program. The macros serve as a kind of step by
step documentation along with the formulas and range names. Each
tool has the Lotus auto-execute macro "\0", which immediately
gives control to the program upon loading. Other useful
facilities are the single-step mode and the print formulas
option. Whenever modifications are made, be sure the named
ranges still encompass the desired area. The single-step mode
will help pinpoint any problems of this type.

Before attempting to make changes to your FARMMGR program,
be sure that you have at least one back-up copy.



CONCLUSION




FARMMGR provides a variety of tools for analyzing financial
decisions in agriculture. Farmers can use these tools as support
for their decisions and documentation for their creditors. Con-
versely, creditors can use FARMMGR to analyze loan applications,
especially through the use of the STATEMENTS tool. Although the
tools enhance the amount of information, analysis and calcula-
tions that can be done, the user should rely on personal experi-
ence and expertise when making the final decision.





Ordering Information

For information on how to obtain this and other IFAS
agricultural software, please contact your county extension
office or write to:

IFAS Software Communication and Distribution
G022 McCarty Hall
University of Florida
Gainesville, FL 32611









REFERENCES


Bentley, Ernest. "Capital Investment Template Update",
AcriComp. Volume 1, No. 6. May/June 1983. PP 24-27.

Frey, Thomas L. and Klinefelter, Danny A. Coordinated
Financial Statements for Agriculture. 2nd Edition. Skokie, IL:
AgriBusiness Publications. 1980.


Internal Revenue Service. Farmer's Tax Guide. Publication
225. Department of the Treasury. Rev. Oct. 83.


vanBlokland, P.J. "Hedging For Beginners". Fact Sheet FRE
47. Food and Resource Economics Department, Institute of Food
and Agricultural Sciences, University of Florida, Gainesville,
Florida. September 1982.


Wilsdorf, Mark. "Visicalc Checkbook Balancer", AcriComp.
Volume 2, No. 1. July/August 1983. PP 38-39.























APPENDIX A

COMPATIBLE COMPUTERS










The following is a listing
1-2-3 is compatible.


IBM PC
IBM XT
COMPAQ
TEXAS INSTRUMENTS PC
ZENITH Z-100



BYTEC HYPERION

DEC RAINBOW 100
DEC RAINBOW 100+
WANG PC
GRID COMPASS
HEWLETT PACKARD 150




IBM 3270 PC
TANDY MODEL 2000


of the computers with which LOTUS


Immediately*
Immediately*
Immediately
Immediately
Immediately (Zenith produces and
supports this version of 1-2-3.
For further information call Zenith
at 800-447-4700).
Immediately (Call Bytec at
613-226-7013 for nearest dealer).
Immediately**
Immediately**
Immediately
Immediately
Immediately (HP produces and
supports this version of 1-2-3.
For further information call HP
at 800/FOR-HPPC for nearest
dealer).
Immediately
Mid-1984


* By using a HERCULES GRAPHICS CARD you may obtain graphics on an
IBM monochrome display.


** The only printers supported for the RAINBOW for either text or
an IBM are DEC LA50 and DEC LA100. The only plotter supported
for graphics with the DEC is the HP 7470A.



+ The following information was provided by LOTUS Corporation in
May, 1984. More machines are now LOTUS compatible, including
most 99-100% IBM compatibles like the TANDY 1000's and the
ZENITH 150. Many MS-DOS lap computers are also LOTUS compatible.


























APPENDIX B

STATEMENT'S SAMPLE OUTPUT










CASH FLOW STATEMENT Minimun Beg. Cash Balance 5000
TOTAL JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Beginning Cash Balance 2,387 2387 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
OPERATING RECEIPTS:
rops & feed 36,750 0 0 0 0 0 22000 0 0 0 14750 0 0
Livestock & poultry 52,193 0 0 13680 0 11850 0 0 0 26663 0 0 0
custom work 0 0 0 0 0 0 0 0 0 0 0 0 0
ovt. payments 0 0 0 0 0 0 0 0 0 0 0 0 0
edging acct. withdrawals 0 0 0 0 0 0 0 0 0 0 0 0 0
OTHER INFLOWS:
Breeding Stock Sales 21,120 0 0 0 0 7040 0 0 0 14080 0 0 0
ach,Btd,Land Sale(sub.BV) 0 0 0 0 0 0 0 0 0 0 0 0 0
New Loans 11,000 0 0 1000 0 10000 0 0 0 0 0 0 0
owner Contributions 0 0 0 0 0 0 0 0 0 0 0 0 0
interest & Hedge Income 0 0 0 0 0 0 0 0 0 0 0 0 0
nflows from savings 0 0 0 0 0 0 0 0 0 0 0 0 0

OTAL CASH INFLOW 123,450 2387 5000 19680 5000 33890 27000 5000 5000 45743 19750 5000 5000
OPERATING EXPENSES: TOTAL JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Labor hired 6,400 0 0 1200 0 0 200 1600 0 0 2000 1400 0
epairs machinery 8,200 1600 400 500 700 1000 800 600 200 1200 700 500 0
epairs buildings 3,300 800 800 0 0 0 0 0 1300 0 0 200 200
ent/leases 2,800 0 2800 0 0 0 0 0 0 0 0 0 0
Seed 10,800 0 3500 1150 0 2500 1150 0 0 2500 0 0 0
Fertilizer & lime 10,800 0 0 3300 2580 0 240 240 0 2340 2100 0 0
Chemicals 16,500 0 0 11500 2000 2000 500 0 0 500 0 0 0
Custom machine hire 1,860 0 0 0 0 600 0 0 0 0 1260 0 0
Supplies/Feed 6,100 700 600 800 550 650 800 300 800 200 350 100 250
vst exp.(vet&other) 5,100 1700 0 0 0 0 0 1700 0 0 1700 0 0
storage & drying 400 200 0 0 0 0 0 0 0 0 200 0 0
Gas, fuel, oil 8,248 0 0 936 704 824 1048 524 524 1064 944 1080 600
marketing & trans. expense 900 0 0 0 0 400 100 0 0 400 0 0 0
their 1,100 400 0 0 300 0 0 0 400 0 0 0 0
Taxes (RE & Property) 0 0 0 0 0 0 0 0 0 0 0 0 0
Insurance 0 0 0 0 0 0 0 0 0 0 0 0 0
Utilities 0 0 0 0 0 0 0 0 0 0 0 0 0
Rather (unallocated) 0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL CASH OPERATING EXP. 82,508 5,400 8,100 19,386 6,834 7,974 4,838 4,964 3,224 8,204 9,254 3,280 1,050
PURCHASES & OTHER OUTFLOWS TOTAL JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
eeder Livestock 0 0 0 0 0 0 0 0 0 0 0 0 0
Machinery & equipment 1,000 0 0 1000 0 0 0 0 0 0 0 0 0
Breeding Livestock 0 0 0 0 10000 0 0 0 0 0 0 0 0
Buildings & improvements 0 0 0 0 0 0 0 0 0 0 0 0 0
Land purchases 0 0 0 0 0 0 0 0 0 0 0 0 0
Hedging acct. deposits 0 0 0 0 0 0 0 0 0 0 0 0 0
owner withdrawals 0 0 0 0 0 0 0 0 0 0 0 0 0
flows to savings 0 0 0 0 0 0 0 0 0 0 0 0 0
outflows to retirement acc 0 0 0 0 0 0 0 0 0 0 0 0 0
Inter & Long Term Loan Pay 51,349 4289 2709 2735 2735 2735 2735 2735 12735 7735 2735 4735 2735
LOTAL CASH OUTFLOW 134,857 9,689 10,809 23,121 9,569 10,709 7,573 7,699 15,959 15,939 11,989 8,015 3,785
nding cash bat. w/o loan -7302 -5809 -3441 -4569 23181 19427 -2699 -10959 29803 7761 -3015 1215
OPERATING LOAN: Interest X: 15.45%
operating loans needed 76,580 12302 10809 8441 9569 0 0 7699 15959 0 0 8015 3785
interest pay. (oper. loan) 3,835 0 0 0 0 1907 449 0 0 1210 270 0 0
Principal pay.(oper. loan) 56,337 0 0 0 0 16274 13978 0 0 23594 2491 0 0
Ending cash balance 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
ACCRUED INTEREST (Beg Mth.) 0 287 713 1248 1907 449 269 636 1210 270 237 578
PERATING LOAN BALANCE (End Mth.) 22302 33111 41552 51121 34847 20869 28568 44527 20933 18442 26457 30242







LIVESTOCK PRODUCTION


Animal Type Total Val/H

Steers $19,663 303
Heifers $18,850 290
Fed Steers $13,680 456
$0 0
$0 0
$0 0
SO 0
$0 0


# of Head

Lbs/H $/Cwtj JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

500 60.50 20 45
500 58.00 20 45
800 57.00 30


Breeding stock:
Cull cows
Bulls


Other

TOTAL LVST. SALES

LVST OPER. EXPENSES:

Labor hired
Repairs machinery
Repairs buildings
Rent/Leases
Seed
Fertilizer & Lime
Chemicals
Custom machine hire
Feed Expense
Lvst exp.(vet&other)
Gas, fuel, oil
Mktg & trans. exp.
Other


$16,500 550
$4,620 770
$0 0
$0 0
$0 0


1100 50.00
1400 55.00


$73,313
..... ..... ..... .... ... ----. Quantity -- -- -- --.
Units #Units Price JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC I

$3,600 S/hr/herd 1 4.00 200 300 200 200 0
$5,000 S/S/herd 1 1.00 1100 200 300 300 500 200 400 200 800 500 500
$1,800 $/$/herd 1 1.00 400 400 600 200 200
$1,200 $/ac/herd 1 12.00 100
$8,500 S/Lb/ac 100 1.00 35 25 25
$8,400 S/lb/ac 100 0.70 30 30 30 30
$9,000 $/lb/ac 100 3.00 30
$660 S/S/herd 1 1.00 660
$2,700 S/$/herd 1 1.00 700 100 400 50 150 200 100 400 100 150 100 250
$5,100 $/head/hea 170 10.00 1 1 1
$6,120 $/$/herd 1 1.00 600 480 600 600 300 300 840 720 1080 600
$800 S/S/herd 1 1.00 400 400
$400 $/S/herd 1 1.00 400


TOTAL LVST EXPENSE $53,280

NET RETURNS LVST $20,033








CROP PRODUCTION #1 Total #Acres Un. $/ac $/Unit JAN FEB MAR APR MAY

CORN (BU) $22,000 100 $/BU 220 2.75


CROP OPER. EXPENSES: Acres Un. $/ac S/Unit
Labor hired $2,000 100 S/$ 20 4.00
Repairs machinery $2,000 100 $/S 20 1.00
Repairs buildings $1,200 100 $/$ 12 1.00
Rent/leases $800 100 $/$ 8 1.00
Seed $1,150 100 $/Lb 12 1.15
Fertilizer & time $1,680 100 $/lb 17 1.20
Chemicals $6,500 100 $/gL 65 1.00
Custom machine hire $600 100 $/$ 6 1.00
Supplies $2,100 100 $/$ 21 1.00
Storage & drying $200 100 $/$ 2 1.00
Gas, fuel, oil $1,008 100 $/gl 10 1.12
Mktg & trans. exp. $100 100 $/$ 1 1.00
Other $300 100 $/S 3 1.00
TOTAL CROP EXPENSE $19,638 $196
NET RETURNS-CROP #1 $2,362 $24


1.0
2.0 2.0
4.0
8.0
0.0 10.0
0.0 10.0
0.0 25.0
0.0 0.0
5.0 4.0
0.0 0.0
0.0 3.0
0.0 0.0
0.0 0.0


QUANTITY
0.0
4.0 5.0


0.0 0.0
4.0 0.0
20.0 20.0
0.0 6.0
5.0 5.0
0.0 0.0
2.0 2.0
0.0 0.0
3.0 0.0


JUN

80.0


JUL AUG SEP OCT NOV DEC I
.... .... .... ... ... ....


1.0
2.0 0.0


2.0 1.0
0.0 0.0 0.0
0.0 0.0 0.0


CROP PRODUCTION #2 Total #Acres Un. $/ac $/Unit JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

SOYBEANS $14,750 100 BU 148 5.90 25.0


CROP OPER. EXPENSES:
Labor hired
Repairs machinery
Repairs buildings
Rent/leases
Seed
Fertilizer & lime
Chemicals
Custom machine hire
Supplies
Storage & drying
Gas, fuel, oil
Mktg & trans. exp.
Other
TOTAL CROP EXPENSE
NET RETURNS-CROP #2


$800
$1,200
$300
$800
$1,150
$720
$1,000
$600
$1,300
$200
$1,120
SO
$400
$9,590
$5,160


Acres Un. $/ac $/Unit
100 $/hr 8 2.00
100 $/$ 12 1.00
100 $/$ 3 1.00
100 $/$ 8 1.00
100 $/Lb 12 1.15
100 $/Lb 7 1.20
100 $/gl 10 1.00
100 $/$ 6 1.00
100 $/$ 13 1.00
100 $/$ 2 1.00
100 $/gl 11 .12
100 $/$ 0 1.00
100 $/$ 4 1.00
$96
$52


QUANTITY


2.0 0.0
3.0


2.0


2.0 1.0
4.0 2.0




2.0
5.0


6.0
4.0 2.0 4.0 1.0 2.0
2.0
2.0 2.0 2.0 2.0 2.0

4.0








CROP PRODUCTION #3 Total. #Acres Un. $/ac $/Unit JAN FEB MAR APR MAY

$0 100 BU 0 0.00


JUN JUL AUG SEP OCT NOV DEC

25.0


CROP OPER. EXPENSES:
Labor hired
Repairs machinery
Repairs- buildings
Rent/1 eases
Seed
Fertilizer & time
Chemicals
, Custom machine hire
Supplies
storage & drying
Gas, fuel, oil
Mktg & trans. exp.
Other
TOTAL CROP EXPENSE
NET RETURNS-CROP #3


Acres Un. $/ac S/Unit
100 $/hr 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 S/S 0 0.00
100 $/tb 0 0.00
100 $/lb 0 0.00
100 $/gl 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 $/gl 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
$0
$0


QUANTITY


2.0 0.0
3.0


2.0 1.0
4.0 2.0


6.0
4.0 2.0 4.0. 1.0 2.0
2.0
2.0 2.0 2.0 2.0 2.0

4.0


CROP PRODUCTION #4 Total #Acres Un. $/ac $/Unit JAN FEB

$0 100 S/BU 0 0,00


CROP OPER. EXPENSES:
Labor hired
Repairs machinery
Repairs buildings
Rent/teases
Seed
Fertilizer & lime
Chemicals
Custom machine hire
Supplies
Storage & drying
Gas, fuel, oil
Mktg & trans. exp.
Other
TOTAL CROP EXPENSE
NET RETURNS-CROP #4


Acres Un. $/ac S/Unit
100 S/$ 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 $/lb 0 0.00
100 $/lb 0 0.00
100 S/gl 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
100 $/S 0 0.00
100 $/gL 0 0.00
100 $/$ 0 0.00
100 $/$ 0 0.00
$0
$0


MAR APR MAY




QUANTITY
1.0 0.0
2.0 4.0 5.0


10.0
10.0
25.0
0.0
4.0
0.0
3.0
0.0
0.0


JUN

80.0


JUL AUG SEP OCT NOV DEC
....o ... ... ... ... ...


1.0 0.0
2.0 0.0 0.0
4.0


0.0
0.0
20.0
6.0
5.0
0.0
2.0
0.0
0.0


2.0 1.0
0.0 0.0
0.0 0.0








CROP PRODUCTION #5 Total #Acres Un. $/ac S/Unit JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC |

$0 100 BU 0 0.00 25.0


CROP OPER. EXPENSES:
Labor hired
Repairs machinery
Repairs buildings
Rent/Leases
Seed
Fertilizer & lime
Chemicals
Custom machine hire
Supplies
Storage & drying
Gas, fuel, oil
Mktg & trans. exp.
Other
TOTAL CROP EXPENSE
NET RETURNS-CROP #5


Acres Un. $/ac $/Unit


100 S/hr
100 $/$
100 S/S
100 S/S
100 $/Lb
100 $/Lb
100 $/gl
100 $/$
100 $/$
100 $/$
100 S/gl
100 $/$
100 $/$


QUANTITY


0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00


2.0 0.0
3.0


2.0


2.0 1.0
4.0 2.0




2.0
5.0


6.0
4.0 2.0 4.0 1.0 2.0
2.0
2.0 2.0 2.0 2.0 2.0

4.0







RECOVERY


Num


MACHINERY/EQUIPMENT Purch.
NAME Yr Mth Life


1 CHEVY TRUCK
2 FORD TRACTOR
3 COMBINE
4 FERTILIZER SPREADER
5


14
15
...CONTINUED
MACHINERY/EQUIPMENT


COST R
Purch.


Num NAME Yr Mt

16 PLANTER 82
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TOTAL MACHINERY COST RECOVERY


h Life


Purch.
Price

11000
30000
30000
1000


MKT ACR
Value Meth

7000 1
6000 1
10000 2
700 1


E CO VERY
Purch. MKT ACR
Price Value Meth


7 5 4000 3000 2


76000 26700


ACR
83

2200
6000
6300
100


ACCUM Tax
ACR Credit


3300
21000
23700
100
0
0
0
0
0
0
0
0


0
0
0
100
0
0
0
0
0
0
0
0
0
0
0


ACR ACCUM Tax
83 ACR Credit


----- -----
880 1480
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 01
0 0
15480 49580


0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
100


COST







BREEDING LIVESTOCK
Num NAME
D--- - - - -
31 COW HERD (100HD)
32
33
34
35
36
37
38
39
40
41
42
43
44
45
TOTAL LIVESTOCK


COST
Purch.
Yr Mth

81 3
83 4


RE C OV
Purch.
Life Price

5 30000
5 10000


ERY
MKT ACR
Value Meth

30000 2
10000 1


40000 40000


ACR
83

6300
1000


0
0
0
0
7300


ACCUM Tax
ACR Credit

17400 0
1000 1000
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
18400 1000


COST
BUILDING/IMPROVEMENTSPurch.
Num NAME Yr Mth

46 BARN 78 1
47


58
59
60
TOTAL BUILDINGS/IMPROVEMENTS


RE C OV
Purch.
Life Price

15 10000


ERY
MKT ACR
Value Meth

9000 1


ACR
83

667
0
0
0
0
0
0
0
0
0


0
667


10000 9000


ACCUM Tax
ACR Credit

3666 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
3666 0







AMORTIZED INTERMEDIATE LOANS
# NAME YR MTH AMOUNT
- - - - - - - - -


$28,000
$10,000
$1,000
$60,000


1 FORD TRACTOR
2 CHEVY PICKUP
3 FERT. SPREADER
4 equipment
5


10
SUBTOTAL
LONG-TERM LOANS
1 LVST LOAN
2 mortgage
3
SUBTOTAL
TOTAL


RATE
(%)

12.90%
11.95%
12.00%
12.00%


$30,000 12.00%
$100,000 12.00%


Intermediate loan # 1
Loan number: 1
Name of Loan: COUNTY PCA
Interest Rt.: 12.00%
Actual PCA Rt: 13.33%
12 Mths Amortization= 1789
MTH Ending Payments Curr.Int.


4
5
6
7


0
0
0
0
0
5,000
0
0
0


244
247
250
253
255
258
261
264
267
214
217
219


LIFE
mths


MONTHLY
PAYMENT


BEG.PRIN ENDING
1983 1983


48 750 10336
48 263 9166
48 26 0
48 1580 1564
0 0
0 0
0 0
0 0
0 0
0 0
2619 21066
---- ------ ------


60
360


667 7511
1029 97663
0 0
1696 105174
4315 126240


If loan initiated
which month ?:
PCA Stock (%):
Prin. Remain.:
Prev. Int.Due:
Acc.Int. Principal


2,244
2,492
2,742
2,994
3,250
3,508
3,769
4,033
0
214
431
651


20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
19,300
19,300
19,300
19,300


2920
7179
847
0
0
0
0
0
0
0
10946

661
97062
0
97723
108669


this year,
0
10%
20,000
2,000
ENDING BAL.


22,244
22,492
22,742
22,994
23,250
23,508
23,769
24,033
19,300
19,515
19,732
19,951







Intermediate loan # 2
Loan number: 1
Name of Loan: STATE BANK
Interest Rt.: 12.00%
Actual PCA Rt: 12.00%
12 Mths Amortization=
MTH Ending Payments


0
0
0
2,000
0


888
Curr.Int.

0
0
0
0
0
100
101
102
103
104
105
86


If loan initiated
which month ?:
PCA Stock (%):
Prin. Remain.:
Prev. Int.Due:
Acc.Int. Principal


0
0
0
0
0
100
201
303
406
510
0
86


0
0
0
0
10,000
10,000
10,000
10,000
10,000
10,000
8,615
8,615


this year,
5
0'
10,000
0
ENDING BAL.


0
0
0
0
10,000
10,100
10,201
10,303
10,406
10,510
8,615
8,701


Long Term Loan
Loan number: 1
Name of Loan: FEDERAL LAND
Interest Rt.: 12.00%
Actual PCA Rt: 13.04%
12 Mths Amortization=
MTH Ending Payments


0
0
0
0
10,000
0
0
0
0


BANK


4467
Curr.Int.

543
549
555
561
567
574
580
586
484
489
494
500


If loan initiated this year,
which month ?: 0
PCA Stock (%): 8%
Prin. Remain.: 50,000
Prev. Int.Due: 0
Acc.Int. Principal ENDING BAL.


543
1,093
1,648
2,210
2,777
3,351
3,931
0
484
973
1,467
1,967


50,000
50,000
50,000
50,000
50,000
50,000
50,000
44,517
44,517
44,517
44,517
44,517


50,543
51,093
51,648
52,210
52,777
53,351
53,931
44,517
45,001
45,490
45,984
46,484







BALANCE SHEET- DECEMBER 31,


ASSETS LIABILITIES

CURRENT ASSETS I DEBIT | CURRENT LIABILITIES I CREDIT

CASH (checking...) 2,387 ACCOUNTS PAY. 3,000
SAVINGS ACCT/TIME CERT 50,000 OPERATING LOAN 10,000
HEDGING ACCT EQUITY 2,000 ACCRUED INT. (Oper.Ln)| 0
NOTES & ACCTS RECEIVABLE 6,000 INTMED. LOANS (Due 12mo)| 10,967
LIVESTOCK RAISED FOR SALE 4,000 LONG-TERM LNS (Due 12mo)| 7,451
CROP INVENTORY 5,000 REAL ESTATE TAX LIAB. 1,000
SUPPLIES/FEED INVENTORY 2,000 RENT & LEASE PAYMENTS 1,000
OTHER CURRENT ASSETS 0 OTHER 0
--------------------------- ------ ---I---------------------- ---------
TOTAL CURRENT ASSETS 71,387 TOTAL CURRENT LIAB. 33,418


0.00 33418.19


INTERIM. & FIXED ASSETS

MACHINERY EQUIP (CR Sch.)
BREEDING STOCK (CR Sch.)
RETIREMENT ACCTS.
OTHER INTERIM. ASSETS
--------------------------
TOTAL INTERMEDIATE ASSETS
--------------------------
NOTES RECEIVABLE
FARM LAND (cost:non-depr.)
BUILD./IMPROVE. (CR Sch.)
OTHER FIXED ASSETS
----------------------
TOTAL FIXED ASSETS
-----------------TOTAL ASSETS-----
TOTAL ASSETS


DEBIT

40,900
18,900
10,000
0

79,800

0
200,000
7,001
0

207,001

358,188


INTERIM. & LONG TERM LIAB.I CREDIT
I---------------------------------
NOTES PAYABLE 100
INTERMEDIATE LOANS 32,099
OTHER INTERMEDIATE LIAB. 0
------------------------- I--------
TOTAL INTERMEDIATE LIAB.I 32,199
------------------I---------------
LONG TERM LOANS 147,723
OTHER LONG TERM LIAB. 0
------------------------- ---------
TOTAL LONG TERM LIAB. 147,723
----------------------------------
TOTAL LIABILITIES 213,340
NET WORTH 144,848

NET WORTH + LIABILITIES 358,188


1982







INCOME STATEMENT- FOR YEAR


REVENUES


Accrual Cash


CROPS
cash sales
inventory change
LIVESTOCK & POULTRY SALES
cash sales
inventory change
CAPITAL SALES (gain @ 40%)
breeding stock
Mach,Bld,Land Sale (net of BV)


36,750
(500)

52,193
(1,000)

21,120
0


CUSTOM WORK: CASH
GOVT. PAYMENTS
INTEREST (Sav,Retire) & HEDGING INCOME
OTHER
ADJUSTMENTS IN RECEIVABLES

GROSS REVENUE
less livestock purchased for resale
less feed expense
VALUE OF FARM PRODUCTION
less CASH OPER EXPS (cashflow sch.)
less INTEREST EXPENSE
GROSS MARGIN


36,250


51,193


36,750


52,193


21,120 21,120


3,000


N/A


111,563 110,063
(0) (0)
(2,700) (2,700)
108,863 107,363
(79,808)(77,108)
(30,716)(29,045)
(1,662) 1,210


OTHER EXPENSES
ASSET ADJ. (sup.,prepaids,& other)
PAYABLES ADJ. (taxes,rent,payroll)
COST RECOVERY:
Machinery & equip.
Breeding livestock
Buildings/Improvements

NET FARM INCOME
Capital Gain Adj. (60% nontaxable)

TAXABLE INCOME(LOSS)-FARM OPERATIONS


(500) N/A
300 N/A


15,480
7,300
667


(23,447)(23,447)

(25,309)(22,237)
12,672 12,672

(37,981)(34,909)


1983





BALANCE SHEET -DECEMBER 31,


ASSETS LIABILITIES

CURRENT ASSETS I DEBIT I CURRENT LIABILITIES I CREDIT

CASH (checking...) 5,000 ACCOUNTS PAY. 2,500
SAVINGS ACCT/TIME CERT 50,000 OPERATING LOAN 12mns. 30,242
HEDGING ACCT EQUITY 2,000 ACCRUED INT. (Oper.Ln) 967
NOTES & ACCTS RECEIVABLE 8,000 INTMED. LOANS (Due 12mo) 5,576
LIVESTOCK RAISED FOR SALE 3,000 LONG-TERM LNS (Due 12mo) 1,396
CROP INVENTORY 4,500 REAL ESTATE TAX LIAB. 1,100
SUPPLIES/FEED INVENTORY 1,500 RENT & LEASE PAYMENTS 1,000
OTHER CURRENT ASSETS 0 OTHER CURRENT LIABILITY. 0
-------------------------------- -----------------------| --------
TOTAL CURRENT ASSETS 74,000 TOTAL CURRENT LIAB. 42,782




INTERIM. & FIXED ASSETS DEBIT INTERIM. & LONG TERM LIAB.I CREDIT
--------------------------I---------I-----------------------------
MACHINERY EQUIP (CR Sch.) 26,420 NOTES PAYABLE 200
BREEDING STOCK (CR Sch.) 21,600 INTERMEDIATE LOANS 34,022
RETIREMENT ACCTS. 10,000 OTHER INTERMEDIATE LIAB.I 0
OTHER INTERM. ASSETS 0 -----------------------------
-----------------------I------- TOTAL INTERMEDIATE LIAB. 34,222
TOTAL INTERMEDIATE ASSETS 58,020 ------------------------- ---------
----------------------- --------- LONG TERM LOANS 142,811
NOTES RECEIVABLE 1,000 OTHER LONG TERM LIAB. 0
FARM LAND (cost:non-depr. ) 200,000 i---------------------I-------
BUILD./IMPROVE. (CR Sch.) 6,334 TOTAL LONG TERM LIAB. 142,811
OTHER FIXED ASSETS 0 --------------------------------
---------------------------- --- TOTAL LIABILITIES 219,815
TOTAL FIXED ASSETS 207,334 NET WORTH 119,539
------TOTAL ASSETS 339,354 NET WORTH + LIABILITIES 339,354
TOTAL ASSETS I 339,354 NET WORTH + LIABILITIES 339,354


1983





MARKET VALUE BALANCE SHEETS
(includes market values of machinery, breeding stock, land, buildings
and their contingent tax liability if liquidated)


BEGINNING BALANCE SHEET
Current Assets
Intermediate Assets
Land (market value)
Buildings & Other
TOTAL Assets


ENDING BALANCE SHEET
Current Assets
Intermediate Assets
Land (market value)
Buildings & Other
TOTAL Assets


71387
86,000
200000
9000
356387



74000
76700
200000
10000
360700


Current Liabilities
Intermediate Liabilities
Long Term Liabilities
TOTAL Liabilities
NET WORTH (MKT value)
Contingent Income Tax
NET WORTH (TAX value)

Current Liabilities
Intermediate Liabilities
Long Term Liabilities
TOTAL Liabilities
NET WORTH (MKT value)
Contingent Income Tax
NET WORTH (TAX value)


STATEMENT OF OWNER. EQUITY
--------------------------------------------------------------------------
BEG NET WORTH (TAX Value) $144,848 BEG NET WORTH(TAX Value) $144,848

ADD: ADD:

OWNER CONTRIBUTIONS $0 OWNER CONTRIBUTIONS $0
NET FARM INCOME ($25,309) NET FARM INCOME ($25,309)
MARKET VALUE ADJUSTMENTS
MACHINERY & EQUIPMENT $280
BREEDING STOCK $18,400
LAND $0
BUILDING/IMPROVEMENTS $2,666
LESS: LESS:
OWNER WITHDRAWALS $0 OWNER WITHDRAWALS $0

EQUALS $119,539 EQUALS $140,885

END. NET WORTH (TAX Value)$119,539 END NET WORTH(Mkt Value) $140,885
-------------------------------------------------------------------------


33418
32199
147723
213340
143047
57219
144848

42782
34222
142811
219815
140885
56354
119539





FINANCIAL RATIOS (using market values)
LIQUIDITY
CURRENT RATIO = Current Assets/Current Liab
CURRENT DEBT = Current Liab./Total Liab.

SOLVENCY
LEVERAGE RATIO = Total Liab./Net Worth
IET CAPITAL RATIO = Total Assets/Total Liab.
EQUITY-VALUE RATIO= Net Worth/Total Assets

PROFITABILITY
RETURN ON EQUITY = NET FARM INCOME/NET WORTH
RETURN ON INVSTMT = Income + Interest/Total Assets


GROSS RATIO
TURNOVER RATIO
DEBT SERVICING
EXPENSE STRUCTURE


BEG. ENDING
= 2.14 1.73
= 0.16 0.19


= 1.49
= 1.67
= 0.40


= -0.16
= -0.14


1.56
1.64
0.39


N/A
N/A


FINANCIAL EFFICIENCY DURING
= Operating Exp./Value Farm Prod = N/A 0.72
= Value Farm Prod./Total Assets = N/A 0.30
= Loan Payments/Value Farm Prod. = N/A 1.04
= Loan Pay./Loan Pay. + Oper Exp = N/A 0.59























APPENDIX C

SAMPLE GRAPHS









CASHFLOW


50


40


30


20


10


0


-10


-20


JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC


Z// Asurplus(deficit)


= Avail.


1\73 outflow






BALANCE SHEET
MARKET VALUE


BEGINNING ENDING


NET WORTH +



INCOME


110
100
90 /
80 "
70 -
60
50 -/

o 5 20-
S40 -
30 -
S20 /-
10 -
0
-10
-20
-30-
-40



[zi FARM PROD


Accrual Cash
LEVELS OF INCOME
[l GROSS M NET g TAXABLE


rAL ASSETS =
[ LIABILITIES



STATEMENT


400


350


300


250


200


150


V) v
0
n-
I--


(


i
(






CURRENT RATIO


BEG. ENDING
CURRENT ASSETS / CURRENT LIABILITIES


LEVERAGE


RATIO


BEG. ENDING
TOTAL LIAB. / NET WORTH
1771 LEVERAGE







PROFITABILITY RATIOS


0
-0.01
-0.02
-0.03
-0.04
-0.05
-0.06
-0,07
-0.08
-0.09
-0.1
-0.11
-0.12
-0.13
-0.14
-0.15
-0.16









1.1

1

0,9

0.8

0.7


FINANCIAL EFFICIENCY
RATIOS


RET ON EQUITY RET ON INVST
INCOME/NET WORTH I INCOME+INT./ASSETS


GROSS TURNOVER DEBT SERV EXP STRUC
RATIO NAME







FARMMGR: STATEMENTS


The Operating Budgets provide totals to the Cashflow and
Income Statements. The Cost Recovery and Loan schedules provide
the Beginning Balance Sheet with some of it's asset and liability
numbers, as well as providing total purchases and payments to the
cashflow. The Income Statement, which is the link between the
Beginning and Ending Balance Sheets' net worth, derives its
numbers from the cashflow aggregates. Once the Ending Balance
Sheet is completed, market values from the Cost Recovery sche-
dules are used to complete Market Value Balance Sheets. From
these financial ratios are calculated, along with what we call an
Equity Statement which again emphasizes that Net Income is
the link between the Beginning and Ending Balance Sheets.







.' i i i: : ;. .

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Ay ;,.
i ii::i!i.iiil i








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.. .:: . ..,. .:.E i` '. : ..'. . .

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~ : :.' ::.:'" '. .: : ": ":".i "": '.. ,.

.:: .. .... ..'
I; ..!.::~: ';.i. ..):.'.:.'.i , )., ::;. :.: : .':- i
.:/I:. i ;:.:.:;i ..; . .: . :. ... ',..:
:.:., j :.. .: ......: .... ::.. .
L::::: : ::'. ..'.:. ..:: ';. .. ;.:.. ,,: :.'. |..
'::i~iS; i:ii i ::: :::::::::::: : !i ? J! ;:t : :; : :;

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UI I t R ii iiF iI I IA
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