47090486-6Evaluating your Farm Business: Long-Term Farm Budgeting & Management
Course Information
Description
This course builds on course 47090481-1, 47090481-2, and 47090481-3 by looking at using year-to-year financial records for budgeting and monitoring your farm businesses financial viability.  This course requires at least one year of operation under a complete business plan.  Students will learn long-term budgeting system and how monitoring this system   will help meet your personal, family, and financial goals for your farm.  
Total Credits
Course Competencies
  1. Create Trend Analysis of Farm Business Performance
    Criteria
    Learner examines 5 year trend reports of case farm examples
    Learner creates first 2 years of trend reports for own farm business

  2. Conduct major investment analysis – capital purchase
    Criteria
    Learner addresses “need vs want” questions when considering capital asset purchase
    Learner calculates overhead cost of ownership of capital asset acquisition
    Learner compares ownership and leasing as methods of capital acquisition
    Learner evaluates custom hire vs ownership or leasing machinery using partial budgeting techniques
    Learner identifies Net Present Value (NPV)  analysis as a tool to rate a capital investment
    Learner recognizes Internal Rate of Return (IRR) as a method to compare 2 or more capital investment options

  3. Creating whole farm budgets and long range planning
    Criteria
    Learner recognizes whole farm budget techniques require “big 3” financial reports and enterprise budget information
    Learner researches input requirement for long range financial feasibility study budget
    Learner recognizes value of software designed to combine net worth statement, enterprise budgets , production plan, expense information, debt service, new investment and tax liability together to create a long range feasibility budget
    Learner incorporates date from business reports into whole farm budget software (case farm and own farm business)

  4. Assesses future business organizational structure
    Criteria
    Learner investigates the advantages and disadvantages sole proprietorships, partnership, corporations, cooperatives
    Assessment considers the tax implications of the different organizational structures
    Assessment considers the state and federal regulations that govern the various organizational structures
    Assessment considers the accounting requirements of the organizational structures
    Assessment considers business perpetuation and exit considerations of the organizational structures
    Assessment considers liability of the owner(s)
    Assessment considers all family members

  5. Evaluate Business Transfer Methods
    Criteria
    Investigates tax implications of various methods of transfer
    Considers state and federal government rules and regulations regarding property transfer
    Realizes business reports and documents required to assess methods of transfer
    Assesses importance of financial feasibility for all parties in business transfer
    Develop timeline for conduct of own farm business transfer/exit
    Considers current family and business goals in transfer planning
    Recognizes the importance of contingency in plans in the event of divorce, death, disability or disaster

This Outline is under development.