Compute the common sized income statements for the states presented in Table 3.10. What do the differences have to say about differences in profitability?

Table 3.10

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Category Gross cash income Livestock income Crop sales Government payments Total cash expenses Other farm-related income Variable expenses Livestock Purchases Feed Arkansas Florida Georgia Indiana Kansas 915,884 384,104 910,424 2,109,593 3,045,871 10,414 110,738 662,769 1,878,099 668,707 360,689 566,241 1,219,297 928,670 452 45,289 41,498 38,551 200,551 52,846 159,136 12,549 188,157 186,028 639,648 253,062 710,889 1,606,397 2,749,969 516,894 234,260 587,649 1,257,907 2,506,060 96 4,738 1,012,042 2,645 45,615 375,693 636,946 Other livestock-related 99,821 571 4,914 56,316 52,009 Seed and plants 165,898 9,003 54,600 149,940 99,460 Fertilizer and chemicals 23,795 57,532 189,962 288,704 198,916. Utilities 54,564 2,966 29,758 24,331 37,383 Labor 69,824 99,206 110,340 128,637 184,876 Fuels and oils 51,314 16,451 66,233 80,705 96,413 Repairs and maintenance 14,101 15,276 35,323 74,951 91,797 Machine-hire and custom work 19,888 6,242 44,805 Other variable expenses 17,941 10,626 39,924 35,640 51,413 Fixed expenses 122,754 18,802 123,240 348,491 243,909 Real estate and property taxes 7,535 7,279 9,800 21,110 23,569 Interest 26,407 4,779 34,920 67,599 73,687 Insurance premiums 23,756 3,653 16,909 44,243 44,759 Rent and lease payments 65,056 3,090 61,611 215,539 101,894 Net cash farm income 276,236 131,042 199,535 503,195 295,902 Depreciation 63,202 19,137 61,359 217,202 121,737 Labor, non-cash benefits 1,385 79 1,921 7,605 6,826 Value of inventory change 9,668 3,844 80,831 -15,045 Non-money income 6,754 4,205 8,710 8,040 6,558 Net farm income 228,071 116,042 148,809 367,259 158,852 Interest rates (computed) 0.1009 0.0825 0.1076 0.1034 0.1467 Rate of return on assets 0.1234. 0.0311 0.0675 0.0643 0.0459