Net Worth Animal Science I and II

 How many people would like to have the following:  Job  Car  House The following is one step in getting these things:

Asset  Something tangible of value that a person owns.  There are 2 types of assets:  Current Assets  Non- Current Assets

Current Assets  Items quickly converted to cash, or sold within 12 months.  Cash  Checking  Savings  Livestock  Feed  If a business has $5,000 cash on hand, and $20,000 in checking. What are their current assets

Non-Current Assets  Items that are useful for more than 12 months  Land  Equipment  Machinery  Breeding Livestock If a swine farm has $100,000 in land, and $200,000 in equipment and housing. What is their Non-Current Asset total?

Current Assets + Non-Current Assets = Total Assets  If a turkey farm has $5,000 cash on hand, $20,000 in checking, and $60,000 in land. What are their Total Assets?

Liability  Debts; Something that you owe.  There are 2 types on liabilities:  Current Liabilities  Non-Current Liabilities

Current Liability  Debts that are due within 12 months.  Fertilizer Bill  Electricity Bill  Water Bill  Feed Bill  Tractor payments due this year  Mortgage payments due this year If a cow farmer has a $500 feed bill, a $300 electricity bill, a $350 tractor payment, and a $1,000 mortgage due this month. What are their Current Liabilities for this month?

Non-Current Liability  Debts not due this year.  Mortgages (minus this year’s payments)  Tractor payments  Equipment loans If the same cow farmer has $120,000 left on his mortgage after this year, and $5,000 left on his tractor loan this year. What are their Non-Current Liabilities?

Current Liabilities + Non- Current Liabilities = Total Liabilities  If a cow farmer has a $500 feed bill, a $300 electricity bill, a $350 tractor payment, and a $1,000 mortgage due this month. If the same cow farmer has $120,000 left on his mortgage after this year, and $5,000 left on his tractor loan this year. What are their Total Liabilities?

Inventory  List of items owned by a business  Items usually have value  Usually lists beginning value and current value. Two types of inventory: Depreciable and Non- Depreciable

Depreciable Inventory  Items that are useful for more than 12 months.  Loose value over time due to:  Age  Use  Wear  Out-of-Date due to new technology  Land is NOT depreciable!!

Non-Depreciable Inventory  Items that will be used up or sold within 12 months.  Feed  Supplies  Livestock  Medicine

Total Assets + Total Liabilities = Net Worth  Total Assets = $250,000; Total Liabilities = $150,000. What is this farm’s Net Worth?  Total Assets = $300,000; Total Liabilities = $150,000. What is this farm’s Net Worth?