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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
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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
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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)
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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
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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