1. Financial record keeping

2. Assets Current Assets a)Items that are tangible and can quickly be converted to cash or that will be sold within12 months Examples are … cash on hand, checking and savings accounts, stocks, money others owe you, current non-depreciable inventory, livestock, crops and feed Non – Current Assets (Long term) a)Items that have a useful life of more than one year and are used in the business – b)Examples… non-current, non depreciable inventory, land

3. Intermediate Assets – depreciable inventory Examples.. Machinery, equipment, breeding livestock, cash value of insurance, personal vehicles, household goods

4. Liabilities Current Liabilities – accounts and notes payable, this year’s part of non-current liabilities Non – current liabilities – mortgages and other debts not due this year Total liabilities = current liabilities (debts) + non – current liabilities (debts)

5. Net Worth or owner’s Equity = total assets minus total liabilities Debt-to-Equity Ratio = total liabilities /net worth