TABLE 1. RISK RATING ON BORROWER CHARACTERISTICS Solvency Profitability Liquidity Repayment CDRM (1000) Leverage Debt-to-Asset ROFA (%) Current Ratio Risk Class Coverage Debt-Service Coverage Average Client Above 10 Client Average Client Average Client Average Above 200 Average Above 15 Client Average Client Above 12 1 Below 0.3 Below 0.1 2 150 - 200 0.3 to 0.59 0.1 to 0.44 12 to 15 5 to 12 6 to 9.9 3 90 - 150 0.6 to 0.79 0.45 to 0.59 8 to 11.99 2 to 4.9 5 to 5.9 4 50 - 90 0.8 to 0.99 0.6 to 0.79 5 to 7.99 1 to 1.9 4 to 4.9 5 25 - 50 1.0 to 1.6 0.8 to 0.99 0 to 4.9 O to 0.9 3 to 3.9 6 0 - 25 1.7 to 2.4 1.0 to 1.49 -1.0 to 0 -1 to -0.1 2 to 2.9 7 -10-0 2.5 to 5.0 1.5 to 2.0 -5 to -1.1 -2 to -1.1 1 to 1.9 8 Below -10 Above 5.0 Above 2 Below -5 Below -2 Below 1 Risk Class 1 2 3 4 5 6 7 8 Probability of Default 0% 1.7% 4.1% 9.8% 14.9% 20.5% 26.3% 34.5% Repayment CDRM (1000s) Risk Class TABLE 1. RISK RATING ON BORROWER CHARACTERISTICS Solvency Profitability Liquidity Coverage Debt-Service Leverage Debt-to-Asset ROFA (%) Current Ratio Coverage Average Client Average Client Average Client Average Client Average Client Above Above Below 0.3 Below 0.1 Above 15 12 10 Average Client 1 Above 200 2 150 - 200 0.3 to 0.59 0.1 to 0.44 12 to 15 5 to 12 6 to 9.9 3 90 - 150 0.6 to 0.79 0.45 to 0.59 8 to 11.99 2 to 4.9 5 to 5.9 4 50 - 90 0.8 to 0.99 0.6 to 0.79 5 to 7.99 1 to 1.9 4 to 4.9 5 25 - 50 1.0 to 1.6 0.8 to 0.99 0 to 4.9 0 to 0.9 3 to 3.9 6 0 - 25 1.7 to 2.4 1.0 to 1.49 -1.0 to 0 -1 to -0.1 2 to 2.9 7 -10-0 2.5 to 5.0 1.5 to 2.0 -5 to -1.1 -2 to -1.1 1 to 1.9 8 Below -10 Above 5.0 Above 2 Below -5 Below -2 Below 1 Risk Class 1 2 3 6 7 8 Probability of Default 0% 1.7% 4.1% 9.8% 14.9% 20.5% 26.3% 34.5% Financial Measure Small Crop Farms Small Dairy Farms Profitability Return on Farm Assets (ROFA) 2.30% 3.23% Return on Farm Equity (ROFE) 1.37% 3.29% Cost of Farm Debt (COFD) 4.66% 3.19% Operating Profit Margin Ratio (OPMR) 14.7% 7.1% Liquidity Working Capital $59.798 $11,807 Current Ratio 1.60 1.17 Quick (or Acid-Test) Ratio 0.35 0.32 Working Capital to Gross Income 40.8% 4.74% Solvency & Risk Leverage (or Debt-To-Equity) Ratio 0.78 1.22 Debt-To-Asset Ratio (DTA) 0.44 0.55 Equity-To-Asset Ratio (ETA) 0.56 0.45 Financial Measure Small Crop Farms Small Dairy Farms Coverage & Repayment Interest Coverage Ratio 1.50 1.85 1.17 0.60 Debt-Service Coverage Ratio Capital Debt Repayment Capacity $39,200 $29.620 Capital Debt Repayment Margin $16,020 -$925 Replacement Margin $1,816 -$12.840 Efficiency Asset Turnover Ratio 0.16 0.46 Operational Ratios 1. Operating Expense Ratio 2. Depreciation Expense Ratio 3. Interest Expense Ratio 4. Net Farm Income Ratio 77% 8% 8% 9% 88% 4% 3% 5% TABLE 2. BORROWER CHARACTERISTICS SCORECARD Criteria Measure Weight Rating Score Repayment CDRM (1000s) 25 Solvency Leverage 20 Solvency Debt-to-Asset 15 Profitability ROFA (%) 10 Liquidity Current Ratio 20 Coverage Debt-Service Coverage 10 Total Score (Risk Class) TABLE 1. RISK RATING ON BORROWER CHARACTERISTICS Solvency Profitability Liquidity Repayment CDRM (1000) Leverage Debt-to-Asset ROFA (%) Current Ratio Risk Class Coverage Debt-Service Coverage Average Client Above 10 Client Average Client Average Client Average Above 200 Average Above 15 Client Average Client Above 12 1 Below 0.3 Below 0.1 2 150 - 200 0.3 to 0.59 0.1 to 0.44 12 to 15 5 to 12 6 to 9.9 3 90 - 150 0.6 to 0.79 0.45 to 0.59 8 to 11.99 2 to 4.9 5 to 5.9 4 50 - 90 0.8 to 0.99 0.6 to 0.79 5 to 7.99 1 to 1.9 4 to 4.9 5 25 - 50 1.0 to 1.6 0.8 to 0.99 0 to 4.9 O to 0.9 3 to 3.9 6 0 - 25 1.7 to 2.4 1.0 to 1.49 -1.0 to 0 -1 to -0.1 2 to 2.9 7 -10-0 2.5 to 5.0 1.5 to 2.0 -5 to -1.1 -2 to -1.1 1 to 1.9 8 Below -10 Above 5.0 Above 2 Below -5 Below -2 Below 1 Risk Class 1 2 3 4 5 6 7 8 Probability of Default 0% 1.7% 4.1% 9.8% 14.9% 20.5% 26.3% 34.5% Repayment CDRM (1000s) Risk Class TABLE 1. RISK RATING ON BORROWER CHARACTERISTICS Solvency Profitability Liquidity Coverage Debt-Service Leverage Debt-to-Asset ROFA (%) Current Ratio Coverage Average Client Average Client Average Client Average Client Average Client Above Above Below 0.3 Below 0.1 Above 15 12 10 Average Client 1 Above 200 2 150 - 200 0.3 to 0.59 0.1 to 0.44 12 to 15 5 to 12 6 to 9.9 3 90 - 150 0.6 to 0.79 0.45 to 0.59 8 to 11.99 2 to 4.9 5 to 5.9 4 50 - 90 0.8 to 0.99 0.6 to 0.79 5 to 7.99 1 to 1.9 4 to 4.9 5 25 - 50 1.0 to 1.6 0.8 to 0.99 0 to 4.9 0 to 0.9 3 to 3.9 6 0 - 25 1.7 to 2.4 1.0 to 1.49 -1.0 to 0 -1 to -0.1 2 to 2.9 7 -10-0 2.5 to 5.0 1.5 to 2.0 -5 to -1.1 -2 to -1.1 1 to 1.9 8 Below -10 Above 5.0 Above 2 Below -5 Below -2 Below 1 Risk Class 1 2 3 6 7 8 Probability of Default 0% 1.7% 4.1% 9.8% 14.9% 20.5% 26.3% 34.5% Financial Measure Small Crop Farms Small Dairy Farms Profitability Return on Farm Assets (ROFA) 2.30% 3.23% Return on Farm Equity (ROFE) 1.37% 3.29% Cost of Farm Debt (COFD) 4.66% 3.19% Operating Profit Margin Ratio (OPMR) 14.7% 7.1% Liquidity Working Capital $59.798 $11,807 Current Ratio 1.60 1.17 Quick (or Acid-Test) Ratio 0.35 0.32 Working Capital to Gross Income 40.8% 4.74% Solvency & Risk Leverage (or Debt-To-Equity) Ratio 0.78 1.22 Debt-To-Asset Ratio (DTA) 0.44 0.55 Equity-To-Asset Ratio (ETA) 0.56 0.45 Financial Measure Small Crop Farms Small Dairy Farms Coverage & Repayment Interest Coverage Ratio 1.50 1.85 1.17 0.60 Debt-Service Coverage Ratio Capital Debt Repayment Capacity $39,200 $29.620 Capital Debt Repayment Margin $16,020 -$925 Replacement Margin $1,816 -$12.840 Efficiency Asset Turnover Ratio 0.16 0.46 Operational Ratios 1. Operating Expense Ratio 2. Depreciation Expense Ratio 3. Interest Expense Ratio 4. Net Farm Income Ratio 77% 8% 8% 9% 88% 4% 3% 5% TABLE 2. BORROWER CHARACTERISTICS SCORECARD Criteria Measure Weight Rating Score Repayment CDRM (1000s) 25 Solvency Leverage 20 Solvency Debt-to-Asset 15 Profitability ROFA (%) 10 Liquidity Current Ratio 20 Coverage Debt-Service Coverage 10 Total Score (Risk Class)