37 38 30 A Cash Flow Budget particularly helps farmers manage a Solvency b. Profitability Liquidity di Depreciability 31 A cash inflow from investing activities could include a. Proceeds from operating loans b. Government payments c. Proceeds from sale of farm products d Proceeds from sale of real estate The purpose of liquidity analysis is to estimate it: a. the supply of labor on the farm will be sufficient to carry out the plan b. the supply of irrigation water will be sufficient to carry out the plan c. cash inflows will be sufficient to meet expected cash outflows d. netfarm Income will be positive or negative 39 40. 53 34 A cash flow budget should contain all of the following items except a depreciation be principal payments on machinery loans c cost of new farm machinery to be purchased d. cost of diesel fuel needed Solvency measures a farm's ability to a. Meet total claims against the business b. Assess changes in profits c Grow sufficiently rapidly to remain successful d. Meet financial commitments as they come due If a farm has a leverage ratio of 1.0 then for every dollar of debt the farmer has a. One dollar of profit b. One percent annual growth in profits, on average c. One dollar of equity capital d. One percent annual growth in sales, compared to the previous year 35. 36 Compared to Solvency, Liquidity is: a. A shorter-run concept. b. A secondary, but still important concept. c. A more important concept, especially in the long run. d. A less important concept for agricultural firms, but more important for retail and other labor Intensive firms e. An unrelated concept