horner by qingyunliuliu

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									                                       Worksheet 1. Input Information

Schedule F Data                                        Taxable Year:                   1997
    Cost of livestock sold (Schedule F, line 2)                              a   $           -
    Gross income (Schedule F, line 11)                                       b   $    289,858.00
    Depreciation (Schedule F, line 16)                                       c   $     44,492.00
    Mortgage interest (Schedule F, line 23a)                                 d   $     28,609.00
    Other interest paid (Schedule F, line 23b)                               e   $        637.00
    Total expenses (Schedule F, line 35)                                     f   $    262,943.00

Balance Sheet                                                                        Beginning            Ending
     Balance sheet date                                                               12/31/96           12/31/1997

     Cash                                                                    g   $     20,000.00    l   $    20,000.00
     Total current farm assets                                               h   $    217,851.00    m   $ 200,310.00
     Total current farm liabilities                                          I   $     36,302.00    n   $    42,255.00
     Accrued Interest                                                        j   $      5,015.00    o   $     4,974.00
     Farm accounts payable and accrued exp.                                  k   $           -      p   $          -
     Total farm assets                                                                              q   $ 1,776,560.00
     Total farm liabilities                                                                         r   $ 316,644.00
     Owner's equity                                                                                 s   $ 1,459,916.00

Miscellaneous Data
    Breeding stock sales (Form 4797)                                         t $          15,054
    Number of operators and employees (annual full-time equiv.)              u               1.56
    Family living expenses (all families supported by the farm)1             v $       37,000.00

Net Farm Income
     Gross revenues [a+b+t+(m-l)-(h-g)]                                      w   $    287,371.00
     Interest expense [d+e+(o-j)]                                            x   $     29,205.00
     Other expenses [a+f-(d+e)+(p-k)]                                        y   $    233,697.00
     Net farm income [w-x-y]                                                 z   $     24,469.00


1
 This number is used to approximate the value of unpaid family and operator labor. University of Illinois research indicates
that 1997 total living expenses for 1-2 member families is $39,332; 3-5 member families is $47,950; and 6+ member
families is $47,083. Do not include a value here if the operator and family members are paid a reasonable wage by the
business and those wages are already include in the value on line f.
                     Worksheet 2. Financial Performance Measures

Profitability                                     Your Farm     Benchmark      Strong/Weak
       Return on Assets [(z+x-v)/q]*100                 0.94%     6.50%            weak
       Return on Equity [(z-v)/s]*100                  -0.86%     6.60%            weak
       Operating Profit Margin [(z+x-v)/w]*100          5.80%     15.50%           weak

Liquidity
       Current Ratio [m/n]                               4.74      4.66           strong

Solvency
      Debt-to-Asset Ratio [r/q]*100                   17.82%      16.10%          weak

Financial Efficiency
      Asset Turnover Ratio [w/q]*100                   16.18%      42.00%         weak
      Revenue per Full Time Laborer [w/u]        $ 184,212.18   $ 227,518.00      weak
      Operating Expense Ratio [ (y-c)/w]*100           65.84%      51.40%         weak
      Depreciation Expense Ratio [ c/w]*100            15.48%      9.00%          weak
      Interest Expense Ratio [ x/w]*100                10.16%      3.10%          weak
      Net Farm Income Ratio [ z/w]*100                  8.51%      26.30%         weak
                     Worksheet 3. Repayment Capacity Ratios and Measures

Current Ratio
         Current assets (Item m)                                                    1    $   200,310.00
         Current liabilities (Item n)                                               2    $    42,255.00
         Current ratio [1/2 ]                                                                      4.741

Working Capital
        Current assets (Item m)                                                     3    $   200,310.00
        Current liabilities (Item n)                                                4    $    42,255.00
        Working capital [3-4]                                                            $   158,055.00

Term Debt Coverage Ratio
       Net farm income (Item z)                                                      5   $    24,469.00
       Interest (Item x minus operating interest)                                    6   $    28,568.00
       Depreciation (Item c)                                                         7   $    44,492.00
       Family living expenses (Item v)                                               8   $    37,000.00
       Income for debt servicing and capital replacement [5+6+7-8]                   9   $    60,529.00
       Cash used for capital replacement (from your records)                        10   $    16,500.00
       Income for debt servicing [9-10]                                             11   $    44,029.00
       Scheduled principal and interest payments on term debt (from your records)   12   $    59,996.00
       Coverage Ratio [11/12 ]                                                      13             0.734

Term Debt Repayment Capacity
       Net farm income (Item z)                                                     14   $    24,469.00
       Interest (Item x minus operating interest)                                   15   $    28,568.00
       Depreciation (Item c)                                                        16   $    44,492.00
       Family Living Expenses (Item v)                                              17   $    37,000.00
       Income for debt servicing and capital replacement [14+15+16-17]              18   $    60,529.00
       Cash used for capital replacement (from your records)                        19   $    16,500.00
       Term debt repayment capacity [18-19]                                         20   $    44,029.00
       Scheduled principal and interest payments on term debt (from your records)   21   $    59,996.00
       Term debt repayment margin [20-21]                                           22   $   (15,967.00)


          Term debt repayment margin [20-21]                                        23   $   (15,967.00)
          Interest rate                                                                           8.00%
          Years to repay term debt                                                                   5.0
          Amortization factor                                                       24          0.25046
          Additional term debt the margin would service [23/24]                     25   $   (63,751.60)
               Worksheet 4. Assessing the Effect of a Change on the Rates of Return

                                                                                                Reduce term int.
Financial Data                                                                  Actual              Projected
 1 Gross Revenues (Item w)                                                  $    287,371.00     $       287,371.00
 2 Fixed Costs (Items c+x+v)                                                $    110,697.00     $       107,507.00
    (Depreciation, interest, family living and income taxes, Items c+X+v)
 3 Variable Costs (Item y-c)                                                $    189,205.00     $      189,205.00
    (Other expenses minus depreciation)
 4 Net Income (1-2-3)                                                       $     (12,531.00)   $        (9,341.00)
 5 Total Farm Assets (Item q)                                               $   1,776,560.00    $     1,776,560.00
 6 Owner's Equity (Item s)                                                  $   1,459,916.00    $     1,459,886.00
 7 Interest Expense (Item x)                                                $      29,205.00    $        26,015.00



A   Operating Profit Margin [(4+7)/1]                                                   0.058                 0.058
B   Asset Turnover Ratio [1/5]                                                          0.162                 0.162
C   Return on Assets [ (A*B)*100 ]                                                     0.94%                 0.94%
D   Interest Cost Adjustment [ 7/5 ]                                                    0.016                 0.015
E   Financial Structure [ 5/6 ]                                                         1.217                 1.217
F   Return on Equity [((C/100)-D)*E)*100]                                             -0.86%                -0.63%
                                      Charts




           Where does the revenue go?

70%
60%
50%
40%                                                            Actual
30%                                                            Benchmark
20%
10%
 0%
           Oper.      Dep. expense Int. expense   Net farm
        expense ratio    ratio          ratio   income ratio




                  Profitability Measures

45.0%
40.0%
35.0%
30.0%
25.0%                                                            Actual
20.0%                                                            Benchmark
15.0%
10.0%
 5.0%
 0.0%
            ROA            ROE       Oper. Profit  Asset
                                       Margin     Turnover




                                      Page 5
Charts




   Operating Expense Ratio
   Depreciation Expense Ratio
   Interest Expense Ratio
   Net Farm Income Ratio




Page 6

								
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