FINAN, FINLRB and FINFLO generate the above mentioned 16 ratios and measures to serve as guidelines for making decisions about your farm business. The following table, Farm Finance Scorecard, developed by Rick Wackernagel, Dennis Kauppila and Glenn Rogers, University of Vermont Extension, lists all the 16 measures and the suggested guidelines for each of them.
Farm Finance Scorecard |
Year20__ |
|||
| Liquidity | Vulnerable | Strong | ||
| 1. Current ratio | _____._____ | 1.0 | 2.0 | |
| 2. Working capital | $__________ | |||
| Solvency (market) | ||||
| 3. Farm debt-to-asset ratio | ________% | 60% | 30% | |
| 4. Farm equity-to-asset ratio | ________% | 40% | 70% | |
| 5. Farm to debt-to-equity ratio | ________% | 150% | 43% | |
| Profitability | ||||
| 6. Net farm income | $__________ | |||
| 7. Rate of return on farm assets | ________% | 1% | 5% | |
| 8. Rate of return on farm equity | ________% | 5% | 10% | |
| 9. Operating profit margin | ________% | 20% | 35% | |
| Repayment capacity | ||||
| 10. Term-debt coverage ratio | ________% | 110% | 135% | |
| 11. Capital replacement margin | $__________ | |||
| Financial efficiency | ||||
| 12. Asset-turnover ratio (market) | ________% | 20% | 40% | |
| 13. Operating-expense ratio | ________% | 80% | 60% | |
| 14. Depreciation-expense ratio | ________% | 20% | 10% | |
| 15. Interest-expense ratio | ________% | 20% | 10% | |
| 16. Net farm income ratio | ________% | 10% | 20% | |