Transcript Rancher Joe needs your help!!! After the recent billiards

Chart of Accounts
Rancher Joe needs your help!!!
After the recent billiards Rancher Joe realizes
that he will not have enough feed for his entire
herd for the remainder for the winter. He has
two options: sell his cows or buy more feed.
The rancher knows that the local sale barn is
getting _$1000_ for bred cows and he also
knows that sorghum hay is priced at
__$70__per ton. Help Rancher Joe decide what
to do!!!
Rancher Joe needs your help!!!
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Can Rancher Joe still make a profit?
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Can Rancher Joe still be profitable?
What is the difference between
profit and profitable?
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Profit- All costs-All income=profit
Profitability-The degree at which a
business is making a profit
Degrees in the FFA
In the FFA, it is not acceptable to just
make a profit, to receive the Chapter,
State, and American FFA Degree. To
receive these degrees you must have a
profitable Supervised Agriculture
Experience Program and earn a specific
amount of money.
Farm and Ranch Records
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To determine a profit, farm/ranch records must
be kept.
After creating a record keeping system your
records may be used to:
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Measure financial condition
Provide data over the business
Assist in obtaining loans
Measure the profitability of each individual enterprise
Assist in deciding on new investments
Income tax purposes
Prepare a repayment schedule
Cash Flow
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One very important element of record keeping is
a cash flow statement.
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A Cash flow statement incorporates financial records
and farm data
A Cash flow is a map to the entire years farm/ranch
production
A Cash flow is:
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Divided into months
Divided into enterprises
Divided into income and expenses
Includes several different types of loans
CASH FLOW
PROJECTED EXPENSES BY MONTH
Jan
Cash Balance--Beginning
Feb.
March
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
0
0
0
0
0
0
0
0
0
0
0
TOTAL
ACTUAL
XXXXX
0
SALE OF CURRENT ITEMS
Crops
0
Market Livestock
0
Other (List)
0
0
0
0
TOTAL SALES
0
0
0
0
0
0
0
0
0
0
0
0
0
CAPITAL SALES
0
XXXXX
Breeding Livestock
0
Machinery
0
Other (List)
0
0
0
TOTAL CAPITAL SALES
0
0
0
0
0
0
0
0
0
0
0
0
0
0
TOTAL INCOME
0
0
0
0
0
0
0
0
0
0
0
0
0
0
OPERATING EXPENSES
Total
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Feed
0
Seed
0
Machine Hire
0
Fertilizer
0
Chemicals
0
Repairs
0
Gas & Oil
0
Medicine and Supplies
0
Market Livestock
0
Misc.
0
Other (List)
0
Actua
0
0
0
0
0
TOTAL OPERATING EXPENSE
0
0
0
0
0
0
0
0
0
0
0
0
0
0
l
CAPITAL PURCHASES
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Livestock
Actua
Total
l
0
Machinery
0
Building, Fence
0
Other (List)
0
0
0
TOTAL CAPITAL PURCHASES
0
0
0
0
0
0
0
0
0
0
0
0
0
0
TOTAL EXPENDITURES
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
Cash Difference
XXXX
Money borrowed this month
0
Payments on Loan(s)
0
Interest
Cash Balance--Ending
X
XXXX
X
0
0
0
0
0
0
0
0
0
0
0
0
0
XXXX
X
XXXX
X
Management with Cash
Flows
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Show a profit/loss for individual enterprises
Estimate expenses for each month
Help determine a production plan for the next
year
Plan when to repay loans
Plan when loans are needed
Estimate the timing of purchases and capital
sales
Why is it important to keep
accurate records?
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It allows the owner / operator to look at a picture of
each enterprise at any given moment in time.
It allows the owner / operator to track all income and
expenses to make wise management decisions based on
good financial insight.
It allows for financial documentation when needed by
accountants, bankers, and lawyers.
Why should you organize your
records?
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The ability to organize financial data into charts and
spreadsheets allows the owner / operator to make sound
financial decisions based on facts and figures.
When this data is transformed into a readable printout,
any person involved with the operation can see where
the strengths and weaknesses are located.
The ability to track the progress of an operation allows
the owner / operator to take action to improve specific
portions of the operation such as specific expenses or
income.