47090481-3Operating the Farm Business: Using the Farm Business Plan
Course Information
Description
This course will build on course 47090481-1 and 47090481-2 by demonstrating how the students business plan can be used for understanding, improving, and growing your farm business.  Students will use their plan and financial records to evaluate their current financial position by calculating and using financial ratios.  They will also see how their plan can be used to understand risk management, develop a marketing strategy, create short-term goals, and for long-term projections and growth strategies.  
Total Credits
Course Competencies
  1. Evaluating Sources and Use of Credit
    Criteria
    Learner identifies credit requirements based on pro forma business statements
    Learner identifies potential sources of credit
    Learner prepares documentation to provide potential lender
    Learner recognizes characteristics of short, intermediate, and long term credit
    Learner compares potential credit sources
    Learner selects lender that best meets the needs of the proposed business

  2. Create Year One flow projection for farm business financial plan
    Criteria
    Learner realizes importance of cash flow projection for business success
    Learner recognizes need for three years of cash flow projections for farm business plan

  3. Using standard financial ratios to understand your farm business - Liquidity
    Criteria
    Learner manipulates data from net worth statement to generate measures of business liquidity
    Learner recognizes importance of monitoring liquidity measures quarterly to annually

  4. Using standard financial ratios to understand your farm business - Solvency
    Criteria
    Learner utilizes information from the net worth statement to determine solvency of the farm business
    Leaner compares measures of solvency to standards for farm businesses

  5. Using financial standard measures to understand your farm business – Profitability
    Criteria
    Leaner computes business profitability by combining information from net worth statement and income statement
    Leaner compares profitability measures to form business standards
    Learner recognizes methods to improve business profitability by utilizing calculated measures

  6. Using financial standard measures to understand your farm business – Cash Flow Ratios
    Criteria
    Learner computes business cash flow performance measures
    Leaner evaluates cash flow of the business
    Learner compares own business to industry standards for cash flow measures

  7. Using financial standard measures to understand your farm business – Financial Efficiency
    Criteria
    Learner utilizes information from all 3 financial statements to determine how efficient business assets are used to produce income
    Learner computes financial efficiency measures
    Learner compares own business efficiency measures to industry standards

  8. Comparing financial standards measures to like kind farm business – Benchmarking
    Criteria
    Learner locates farm business record summary data
    Learner utilizes calculated performance measures on own farm to compare to similar farm business

This Outline is under development.