1. Conduct Dupont analysis for the rate-of-return on farm assets (ROFA), in a similar format to the Dupont analysis for ROFE conducted in lab. Use the financial statements labeled BS, IS, and CF, included as separate sheets in the workbook. For the calculation of asset return, R, use NFIO + I_d LC + OT, where OT is interest and dividend income received on farm assets. Graph the results of your analysis, and title your graph Dupont ROFA: Baseline.

2. Conduct Dupont analysis for ROFA using alternative financial statements, labeled BS_alt, IS_alt, and CF_alt, which are amended from the baseline financial statements to include purchase of extra machinery in 2015, with a subsequent decrease in operating expenses. Graph this analysis in a separate chart, titled Dupont ROFA: Alternative

Dupont Analysis Deomposition of the rate-of-return on farm assets (ROFA) 2014 2015 2016 2017 Alternative scenario--use financial statements with the "-alt" suffix 2014 2015 2016 2017 Formula Formula Financial statements required Financial statements required Balance Sheet Summary for Vandelay Farms Assets ($) Current assets Cash, savings, and marketable securities Crops, feed, and supplies Market livestock Accounts receivable Other current assets All personal assets -- current Total current assets Noncurrent assets Breeding livestock Machinery and equipment Farm real estate Other noncurrent assets All personal assets -- noncurrent Total noncurrent assets Total assets Liabilities ($) Current liabilities Operating, short-term notes Current maturities Accounts payable Other current liabilities Personal current liabilities Total current liabilities Noncurrent liabilities Non-real estate farm debt Real estate farm debt Other noncurrent liabilities Personal noncurrent liabilities Total noncurrent liabilities Total liabilities Owner Equity ($) Contributed capital and retained earnings Valuation/personal asset equity Total owner equity Total liabilities and owner equity Balance sheet notes Farm assets Farm liabilities Farm equity 2013 Historical 2014 2015 2016 16,853 110,265 94,789 19,458 35,125 14,259 290,749 17,320 109,811 94,751 18,791 35,427 13,418 289,518 16,689 110,708 95,719 18,546 35,588 12,866 290,116 16,351 111,133 94,835 18,134 36,548 12,953 289,954 47,249 251,279 492,453 13,500 47,005 851,486 1,142,235 47,838 251,393 475,123 14,042 47,395 835,791 1,125,309 48,619 252,133 410,789 14,512 46,991 773,044 1,063,160 48,720 252,360 482,372 14,075 46,024 843,551 1,133,505 94,123 25,897 8,456 84,963 800 214,239 94,950 26,648 7,791 85,857 1,713 216,959 95,409 27,244 8,103 85,782 748 217,286 96,278 26,515 8,724 85,969 1,393 218,879 84,187 249,789 10,101 2,781 346,858 561,097 83,204 250,263 10,202 3,069 346,738 563,697 83,387 249,971 10,738 2,581 346,677 563,963 82,597 249,128 11,305 2,924 345,954 564,833 346,987 234,151 581,138 1,142,235 346,070 215,542 561,612 1,125,309 346,584 152,613 499,197 1,063,160 346,558 222,114 568,672 1,133,505 1,080,971 557,516 523,455 1,064,496 558,915 505,581 1,003,303 560,634 442,669 1,074,528 560,516 514,012 Pro forma 2017 17,229 111,841 95,564 18,325 35,831 12,962 291,752 48,251 253,171 411,338 14,739 45,364 772,863 1,064,615 96,171 25,836 9,420 86,665 1,532 219,624 81,991 249,046 11,912 3,598 346,547 566,171 347,172 151,272 498,444 1,064,615 1,006,289 561,041 445,248 Income Statement Summary for Vandelay Farms Item ($) Value of farm production Non-depreciation operating expenses Depreciation expense Interest expense Net income from operations Gain (loss) on sale of capital items Net farm income before taxes Nonfarm income Income before taxes Income and social security taxes Net income after taxes Income statement notes Interest and dividend income received on farm assets 2013 481,964 385,975 28,156 34,754 33,079 33,079 24,156 57,235 7,011 50,224 680 Historical 2014 2015 511,235 505,983 383,177 385,197 24,346 26,285 35,989 37,664 67,723 56,837 67,723 56,837 27,552 29,206 95,275 86,043 4,360 7,603 90,915 78,440 740 696 l Pro forma 2016 522,456 381,853 27,237 35,585 77,781 77,781 28,308 106,089 6,686 99,403 2017 542,356 383,397 29,201 35,780 93,978 93,978 29,364 123,342 2,877 120,465 701 771 Statement of Cash Flow Summary for Vandelay Farms Cash flows from operating activities Inflows Cash received from farm production and govt. payments Cash received from net nonfarm income Total Outflows Cash paid for operating expenses Cash paid for interest on operating loans Cash paid for interest on term loans Cash paid for feed and market livestock Cash paid for other items purchased for resale Cash paid for income and social security taxes Cash withdrawals for family living Total Net cash flows provided by operating activities Cash flows from investing activities Inflows Cash received on sale of machinery, equipment and real estate Cash received from sale of breeding livestock Cash received from withdrawals of savings, marketable securities, personal Total Outflows Cash paid to purchase machinery, equipment, and real estate Cash paid for purchase of breeding livestock Cash paid for deposits to savings accounts, marketable securities, personal Total Net cash flows from investing activities Cash flows from financing activities Inflows Proceeds from operating loans and short-term notes Proceeds from debt financing Cash received from capital contributions Total Outflows Cash repayment of operating and short-term loans Cash repayment of term debt and capital leases-scheduled Cash repayment of term debt and capital leases-unscheduled Cash payments of dividends and other capital distributions Total Net cash flows from financing activities Net increase (decrease) in cash flows Beginning of year cash balance End of year cash balance 2013 Historical 2014 Pro forma 2015 2016 2017 526,987 24,156 551,143 555,689 27,552 583,241 593,654 29,206 622,860 591,263 28,308 619,571 570,879 29,364 600,243 372,923 8,123 19,563 83,456 6,107 56,987 547,159 3,984 374,836 8,129 20,063 83,808 4,009 58,030 548,875 34,366 376,927 8,277 19,976 81,193 8,264 59,911 554,548 68,312 368,596 8,380 19,221 82,521 7,506 60,739 546,963 72,608 372,552 8,323 19,079 80,076 2,965 60,847 543,842 56,401 - - - 3,984 9,561 13,545 6,158 6,158 6,158 - - 23,489 2,500 25,989 25,989 - - - - 26,879 20,159 47,038 47,038 - 115,389 22,798 138,187 138,187 15,789 15,789 6,145 115,648 121,793 4,178 24,795 28,973 28,973 - 13,789 25,964 39,753 39,753 - 12,432 26,123 38,555 22,766 28,976 28,976 92,817 765 13,545 12,780 2,570 12,780 15,350 2,804 15,350 18,154 11,031 18,154 29,185 Balance Sheet Summary for Vandelay Farms Assets ($) Current assets Cash, savings, and marketable securities Crops, feed, and supplies Market livestock Accounts receivable Other current assets All personal assets -- current Total current assets Noncurrent assets Breeding livestock Machinery and equipment Farm real estate Other noncurrent assets All personal assets -- noncurrent Total noncurrent assets Total assets Liabilities ($) Current liabilities Operating, short-term notes Current maturities Accounts payable Other current liabilities Personal current liabilities Total current liabilities Noncurrent liabilities Non-real estate farm debt Real estate farm debt Other noncurrent liabilities Personal noncurrent liabilities Total noncurrent liabilities Total liabilities Owner Equity ($) Contributed capital and retained earnings Valuation/personal asset equity Total owner equity Total liabilities and owner equity Balance sheet notes Farm assets Farm liabilities Farm equity 2013 Historical 2014 2015 2016 16,853 110,265 94,789 19,458 35,125 14,259 290,749 17,320 109,811 94,751 18,791 35,427 13,418 289,518 16,689 110,708 95,719 18,546 35,588 12,866 290,116 16,351 111,133 94,835 18,134 36,548 12,953 289,954 47,249 251,279 492,453 13,500 47,005 851,486 1,142,235 47,838 251,393 475,123 14,042 47,395 835,791 1,125,309 48,619 404,654 410,789 14,512 46,991 925,565 1,215,681 48,720 401,689 482,372 14,075 46,024 992,880 1,282,834 94,123 25,897 8,456 84,963 800 214,239 94,950 26,648 7,791 85,857 1,713 216,959 95,409 27,244 8,103 85,782 748 217,286 96,278 26,515 8,724 85,969 1,393 218,879 84,187 249,789 10,101 2,781 346,858 561,097 83,204 250,263 10,202 3,069 346,738 563,697 235,908 249,971 10,738 2,581 499,198 716,484 237,951 249,128 11,305 2,924 501,308 720,187 346,987 234,151 581,138 1,142,235 346,070 215,542 561,612 1,125,309 346,584 152,613 499,197 1,215,681 346,558 216,089 562,647 1,282,834 1,080,971 557,516 523,455 1,064,496 558,915 505,581 1,155,824 713,155 442,669 1,223,857 715,870 507,987 Pro forma 2017 17,229 111,841 95,564 18,325 35,831 12,962 291,752 48,251 399,431 411,338 14,739 45,364 919,123 1,210,875 96,171 25,836 9,420 86,665 1,532 219,624 239,435 249,046 11,912 3,598 503,991 723,615 347,172 140,088 487,260 1,210,875 1,152,549 718,485 434,064 Income Statement Summary for Vandelay Farms Item ($) Value of farm production Non-depreciation operating expenses Depreciation expense Interest expense Net income from operations Gain (loss) on sale of capital items Net farm income before taxes Nonfarm income Income before taxes Income and social security taxes Net income after taxes Income statement notes Interest and dividend income received on farm assets 2013 481,964 385,975 28,156 34,754 33,079 33,079 24,156 57,235 7,011 50,224 680 Historical 2014 511,235 383,177 24,346 35,989 67,723 67,723 27,552 95,275 4,360 90,915 740 2015 505,983 294,426 40,564 37,664 133,329 133,329 29,206 162,535 7,603 154,932 696 l Pro forma 2016 522,456 287,987 39,845 35,585 159,039 159,039 28,308 187,347 6,686 180,661 2017 542,356 284,264 38,456 35,780 183,856 183,856 29,364 213,220 2,877 210,343 701 771 Statement of Cash Flow Summary for Vandelay Farms Cash flows from operating activities Inflows Cash received from farm production and govt. payments Cash received from net nonfarm income Total Outflows Cash paid for operating expenses Cash paid for interest on operating loans Cash paid for interest on term loans Cash paid for feed and market livestock Cash paid for other items purchased for resale Cash paid for income and social security taxes Cash withdrawals for family living Total Net cash flows provided by operating activities Cash flows from investing activities Inflows Cash received on sale of machinery, equipment and real estate Cash received from sale of breeding livestock Cash received from withdrawals of savings, marketable securities, personal Total Outflows Cash paid to purchase machinery, equipment, and real estate Cash paid for purchase of breeding livestock Cash paid for deposits to savings accounts, marketable securities, personal Total Net cash flows from investing activities Cash flows from financing activities Inflows Proceeds from operating loans and short-term notes Proceeds from debt financing Cash received from capital contributions Total Outflows Cash repayment of operating and short-term loans Cash repayment of term debt and capital leases-scheduled Cash repayment of term debt and capital leases-unscheduled Cash payments of dividends and other capital distributions Total Net cash flows from financing activities Net increase (decrease) in cash flows Beginning of year cash balance End of year cash balance 2013 Historical 2014 Pro forma 2015 2016 2017 526,987 24,156 551,143 555,689 27,552 583,241 593,654 29,206 622,860 591,263 28,308 619,571 570,879 29,364 600,243 372,923 8,123 19,563 83,456 6,107 56,987 547,159 3,984 374,836 8,129 20,063 83,808 4,009 58,030 548,875 34,366 376,927 8,277 19,976 81,193 8,264 59,911 554,548 68,312 368,596 8,380 19,221 82,521 7,506 60,739 546,963 72,608 372,552 8,323 19,079 80,076 2,965 60,847 543,842 56,401 - - - 3,984 9,561 13,545 6,158 6,158 6,158 - - 23,489 2,500 25,989 25,989 - - - - 26,879 20,159 47,038 47,038 - 115,389 22,798 138,187 138,187 15,789 15,789 6,145 115,648 121,793 4,178 24,795 28,973 28,973 - 13,789 25,964 39,753 39,753 - 12,432 26,123 38,555 22,766 28,976 28,976 92,817 765 13,545 12,780 2,570 12,780 15,350 2,804 15,350 18,154 11,031 18,154 29,185