AECN 452 - Agricultural Finance Homework Assignment #7 Due: Thursday, April 9, 2020 1. (100 points total) Using the financial information provided, answer the following questions: a. (20 points) Compute ROFA, ROFE, and COFD for 2019. Briefly comment on the values you calculate. b. (30 points) Calculate the two liquidity and three solvency ratios for 2018 and 2019. Has liquidity improved or worsened from 2018 to 2019? Has solvency improved or worsened from 2018 to 2019? c. (20 points) Calculate the four operational efficiency ratios for 2019, d. (15 points) Using your calculated values from above, demonstrate that the following relationships hold for 2019 and comment on the results: i. ROFA = ATR X OPMR ii. ROFE = ATR X OPMR X (E/A).- 1 x RR e. (15 points) Using your calculated values from above, verify the relationship: ROFE = ROFA + (ROFA - COFD) * (D/E). Is debt capital being used profitably? Why or why not? 2. Graduate students only - this part is due not later than April 14, 2020. Given the relationship in le, let Lebe the leverage ratio and assume that ROFA is a random variable with a mean of ROFA and constant variance equal to okora. You may assume the remaining variables (COFD and L) are constants. Answer the following questions: File C/Users/Conor/Downloads/AECN%20452%20Homework%20Assignment%20%237.pdf Classzone 1G Que pasa en c.. G News Parent Sign In Classroom WebAssign- f Account Settings introtophysicsquart... SpanishDict Englis h EN 452 Homework Assignment #7 Spring 2020 3/3 2017 2018 Balance Sheet Information ASSETS Current Assets Cash and equivalanets Grain and livestock inventory Other current farm assets $4,000 $240,000 $4,000 $248,000 $3,600 $216,000 $1,200 $220,800 Total current assets Noncurrent Assets Machinery and equipment Buildings Land $400,000 $80,000 $1,200,000 $60,000 $1,740,000 51,988,000 $500,000 $80,000 $1,080,000 $54,000 $1,714,000 $1,934,800 Other noncurrent farm assets Total noncurrent assets Total farm assets LIABILITIES Current abilities Notes payable Accounts payable Current portion of term debt Other current farm liabilities $62,000 $9,300 $48.000 $60.000 $179,300 $74,400 $8,370 $43,200 $66,000 $191,970 Total current liabilities Noncurrent abilities Deferred portion of term debt Total noncurrent liabilities Total farm liabilities Total net worth Total liabilities and net worth $600,000 $600,000 $779,300 $1,208,700 $1.988,000 $600,000 $600,000 $791,970 $1,142,830 $1,934,800 Income Statement Information Value of farm production Non-depredation operating expenses Depreciation Interest expense $556,640 $306, 152 $60,000 $58,284 $132,204 $500,976 $290,844 $66,000 $40,799 $103,333 Netfarm income from operations Other Information Family living withdrawals Nonfarm income Income tax expense Other income from farm assets Cash principal payments on current portion of term debt and capital leases Cash interest payments on term debt and capital leases $100.000 $22,500 $36,364 $200 $48.000 $54,000 $40,000 $27,000 $21,818 $20,000 $48,000 $59.400 to search Ole OO a AECN 452 - Agricultural Finance Homework Assignment #7 Due: Thursday, April 9, 2020 1. (100 points total) Using the financial information provided, answer the following questions: a. (20 points) Compute ROFA, ROFE, and COFD for 2019. Briefly comment on the values you calculate. b. (30 points) Calculate the two liquidity and three solvency ratios for 2018 and 2019. Has liquidity improved or worsened from 2018 to 2019? Has solvency improved or worsened from 2018 to 2019? c. (20 points) Calculate the four operational efficiency ratios for 2019, d. (15 points) Using your calculated values from above, demonstrate that the following relationships hold for 2019 and comment on the results: i. ROFA = ATR X OPMR ii. ROFE = ATR X OPMR X (E/A).- 1 x RR e. (15 points) Using your calculated values from above, verify the relationship: ROFE = ROFA + (ROFA - COFD) * (D/E). Is debt capital being used profitably? Why or why not? 2. Graduate students only - this part is due not later than April 14, 2020. Given the relationship in le, let Lebe the leverage ratio and assume that ROFA is a random variable with a mean of ROFA and constant variance equal to okora. You may assume the remaining variables (COFD and L) are constants. Answer the following questions: File C/Users/Conor/Downloads/AECN%20452%20Homework%20Assignment%20%237.pdf Classzone 1G Que pasa en c.. G News Parent Sign In Classroom WebAssign- f Account Settings introtophysicsquart... SpanishDict Englis h EN 452 Homework Assignment #7 Spring 2020 3/3 2017 2018 Balance Sheet Information ASSETS Current Assets Cash and equivalanets Grain and livestock inventory Other current farm assets $4,000 $240,000 $4,000 $248,000 $3,600 $216,000 $1,200 $220,800 Total current assets Noncurrent Assets Machinery and equipment Buildings Land $400,000 $80,000 $1,200,000 $60,000 $1,740,000 51,988,000 $500,000 $80,000 $1,080,000 $54,000 $1,714,000 $1,934,800 Other noncurrent farm assets Total noncurrent assets Total farm assets LIABILITIES Current abilities Notes payable Accounts payable Current portion of term debt Other current farm liabilities $62,000 $9,300 $48.000 $60.000 $179,300 $74,400 $8,370 $43,200 $66,000 $191,970 Total current liabilities Noncurrent abilities Deferred portion of term debt Total noncurrent liabilities Total farm liabilities Total net worth Total liabilities and net worth $600,000 $600,000 $779,300 $1,208,700 $1.988,000 $600,000 $600,000 $791,970 $1,142,830 $1,934,800 Income Statement Information Value of farm production Non-depredation operating expenses Depreciation Interest expense $556,640 $306, 152 $60,000 $58,284 $132,204 $500,976 $290,844 $66,000 $40,799 $103,333 Netfarm income from operations Other Information Family living withdrawals Nonfarm income Income tax expense Other income from farm assets Cash principal payments on current portion of term debt and capital leases Cash interest payments on term debt and capital leases $100.000 $22,500 $36,364 $200 $48.000 $54,000 $40,000 $27,000 $21,818 $20,000 $48,000 $59.400 to search Ole OO a