Agriculture
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Agribusiness - Elective 1
Comparing key financial indicators
In this activity you will need to compare and comment on the financial performance of an imaginary farm. First you will need to calculate some key financial indicators and then compare them against standards.
| Assets | |||
| Bank account | 10 000 | ||
| Land value | 10 000 000 | ||
| Stock | |||
| Merino sheep | 20 000 | ||
| Grain | |||
| Wheat | 1 000 | ||
| Other property | |||
| Assets | |||
| Tractor & implements | 150 000 | ||
| Harvester | 200 000 | ||
| Sheds, buildings, silos & yards | 30 000 | ||
| Utility | 20 000 | ||
| Other assets | |||
| House | 45 000 | ||
| TOTAL ASSETS | 1 476 000 | ||
| Liabilities | |||
| Agricultural bank | 960 000 | ||
| TOTAL LIABILITIES | 960 000 | ||
| Enterprise | |||
| Income | |||
| Sale of wool | 29 000 | ||
| Sale of sheep | 18 000 | ||
| Sale of grain | 33 600 | ||
| TOTAL INCOME | 80 6000 | ||
| Variable costs | |||
| Sheep | 28 500 | ||
| Wheat | 24 000 | ||
| TOTAL VARIABLE COSTS | 52 500 | ||
| Fixed costs | |||
| Rates, etc | 8 000 | ||
| Salary for casual labour | 8 000 | ||
| Insurance | 1 500 | ||
| TOTAL FIXED COSTS | 17 500 | ||
| TOTAL COSTS | 70 000 |
Using the information above make the following calculations.
- Calculate the total assets of the farm
- Calculate the total liabilities of the farm
- Calculate owner's equity
- Calculate return to capital
If the capital were invested in a bank would it attract a greater return?
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