BERRY FARM BUSINESS ANALYSIS 2015 EMPIRE PRODUCER’S EXPO DAN WELCH CHARLES H. DYSON SCHOOL OF APPLIED ECONOMICS AND MANAGEMENT JANUARY 22, 2015.

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Presentation transcript:

BERRY FARM BUSINESS ANALYSIS 2015 EMPIRE PRODUCER’S EXPO DAN WELCH CHARLES H. DYSON SCHOOL OF APPLIED ECONOMICS AND MANAGEMENT JANUARY 22, 2015

TYPES OF RECORDS Production Records Enterprise Budgets Yield, Pesticides, Crop Rotations etc. Financial Records Income Statement Balance Sheet Cash Flow Statement Ratio Analysis Family Living Ownership Records Asset Inventory Legal Documents Estate Plan

INCOME STATEMENT Summary of revenue and expenses for a certain time period Includes all business income Can be cash or non-cash Identify all expenses Cash: plants, fertilizer, pesticides Non-cash: depreciation, accounts payable, accrued interest Net Farm Income from Operations= Total Revenue-Total Expenses

INCOME STATEMENT

BALANCE SHEET Records everything “owned” and “owed” by the farm Assets- Anything of value owned Liabilities- Debt or something owed Net Worth=Assets-Liabilities Current Assets/Liabilities 1 year “Liquid” Intermediate Assets/Liabilities 1-10 years Machinery and Irrigation Long Term

BALANCE SHEET

CHANGES IN NET WORTH Total Assets782, Total Liabilities196,953127,955 Net Worth585,518745,067

CASH FLOW STATEMENT Cash in/Cash out for a period of time Estimate for borrowing needs and seasonal variation Includes any cash out of the business for family living expenses Can be used to plan for capital purchases

CASH FLOW STATEMENT

ANALYSIS Measures of profitability, liquidity, solvency Profitability Net Farm Income Return on Assets= Return to Assets ($)/Asset Value Return on Equity= Return to Equity($)/Average Equity Liquidity Current Ratio= Current Assets/Current Liabilities Working Capital= Current Assets-Current Liabilities Solvency Debt to Asset Ratio= Liabilities/Assets Equity to Asset Ratio= Net Worth/Total Assets Debt to Equity Ratio= Total Liabilities/Net Worth

NET FARM INCOME 2012 & 2013

RETURN ON EQUITY 2012 Net Farm Income with appreciation 7,216 Labor and Management Income per Operator 2,466 Return on Equity Capital-15.31%

ENTERPRISE BUDGETS Enterprise budgets estimate profitability of each separate crop or operation on the farm Used to calculate breakeven price and yield Our team is developing enterprise budgets for the three main berry crops Budgets will be validated by growers from the NYSBGA in late winter and early spring

CROP PRODUCTION Crop2012 BFBS2012 USDA Survey Data Strawberries91.96 cwt/Acre27 cwt/acre Blueberries4,583 lbs/acre1,100 lbs/acre Brambles6,795 lbs/acre????

RESEARCH FUNDED BY THE NYFVI PROJECT #AIC “BUILDING A BETTER BOTTOM LINE FOR NYS BERRY GROWERS” Thanks for Listening! Questions? Suggestions? (Dan Welch) (Brad Rickard)