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use the following information to answer the question provided The below are the numbers taken from one of the farms and you are assigned to
use the following information to answer the question provided
The below are the numbers taken from one of the farms and you are assigned to conduct business analysis. Based on the figures, conclude whether the farm is doing good or where do it stand in terms of a business and to come up with plans to overcome any shortfalls. Measures of Profitability comparison Item group Our farm Comments 1. Net farm income from operations $130,230 $45,486 2. Return to labor and management $87,320 $11,069 3. Return to management $64,654 -28,931 4. Rate of return on farm assets 5.50% 1.80% 5. Rate of return on farm equity 5.60% 0.10% 6. Operating profit margin ratio 20.10% 4.60% Comparison Group Figures Based on Alabama Farm Analysis Association Information Measures of Economic Efficiency comparison Our Item group farm Comments Capital Efficiency 1. Asset turnover ratio 0.40 0.38 2. Operating expense ratio 0.67 0.80 3. Depreciation ratio 0.07 0.04 4. Interest expense ratio 0.03 0.04 5. Net farm income from operations ratio 0.23 0.11 Labor Efficiency 6. Gross revenue per person $256,899 $271,032 Marketing no data 7. Price received for calves (S/cwt) $106.00 $95.00 8. Price received for cotton lint (S/1b) $0.55 $0.56 Livestock Efficiency 9. Purchased feed (S/cow) $68 $77 10. Production per $100 of feed fed $178 $142 no data Measures of Physical Efficiency Average of comparison Item Comments Our farm group 1. Feeder calves produced (lbs/call) 650 540 2. Feeder calves produced (lbs/cow) 576 473 3. Hay fed (tons/cow) 1.6 2.1 4. Cotton yields (lbs/acre) 762 750 5. Corn yields (bu/acre) 118 120 Comparison Group Figures Based on Alabama Farm Analysis Association Information Measures of Farm Size Average of comparison Item group Our farm Comments 1. Gross revenue $565,179 S406,548 2. Total farm assets $1,427,154 $1,068,750 3. Total crop acres farmed 930 720 4. Number of brood cows 180 150 5. Total labor (person-years) 2.2 1.5 Comparison Group Figures Based on Alabama Farm Analysis Association Information Financial Condition of the farm Average of comparison group Item Our farm Comments 1. Net Worth 2. Debt/asset ratio 3. Current ratio 4. Working capital 5. Working capital to gross revenues ratio $1,013,210 0.29 7.18 $140,187 $736,836 0.31 1.38 $23,654 24.8% 5.8% Your Conclusion (You need to mention the overall performance of the firm. You also need to mention about the firm's performance in terms of profitability, economic and physical efficiency, financial position. You also need to report whether they are operating the business in terms of optimum farm size.) At the end of the report, you also need to mention the ways to improve in the case of underperformance. The below are the numbers taken from one of the farms and you are assigned to conduct business analysis. Based on the figures, conclude whether the farm is doing good or where do it stand in terms of a business and to come up with plans to overcome any shortfalls. Measures of Profitability comparison Item group Our farm Comments 1. Net farm income from operations $130,230 $45,486 2. Return to labor and management $87,320 $11,069 3. Return to management $64,654 -28,931 4. Rate of return on farm assets 5.50% 1.80% 5. Rate of return on farm equity 5.60% 0.10% 6. Operating profit margin ratio 20.10% 4.60% Comparison Group Figures Based on Alabama Farm Analysis Association Information Measures of Economic Efficiency comparison Our Item group farm Comments Capital Efficiency 1. Asset turnover ratio 0.40 0.38 2. Operating expense ratio 0.67 0.80 3. Depreciation ratio 0.07 0.04 4. Interest expense ratio 0.03 0.04 5. Net farm income from operations ratio 0.23 0.11 Labor Efficiency 6. Gross revenue per person $256,899 $271,032 Marketing no data 7. Price received for calves (S/cwt) $106.00 $95.00 8. Price received for cotton lint (S/1b) $0.55 $0.56 Livestock Efficiency 9. Purchased feed (S/cow) $68 $77 10. Production per $100 of feed fed $178 $142 no data Measures of Physical Efficiency Average of comparison Item Comments Our farm group 1. Feeder calves produced (lbs/call) 650 540 2. Feeder calves produced (lbs/cow) 576 473 3. Hay fed (tons/cow) 1.6 2.1 4. Cotton yields (lbs/acre) 762 750 5. Corn yields (bu/acre) 118 120 Comparison Group Figures Based on Alabama Farm Analysis Association Information Measures of Farm Size Average of comparison Item group Our farm Comments 1. Gross revenue $565,179 S406,548 2. Total farm assets $1,427,154 $1,068,750 3. Total crop acres farmed 930 720 4. Number of brood cows 180 150 5. Total labor (person-years) 2.2 1.5 Comparison Group Figures Based on Alabama Farm Analysis Association Information Financial Condition of the farm Average of comparison group Item Our farm Comments 1. Net Worth 2. Debt/asset ratio 3. Current ratio 4. Working capital 5. Working capital to gross revenues ratio $1,013,210 0.29 7.18 $140,187 $736,836 0.31 1.38 $23,654 24.8% 5.8% Your Conclusion (You need to mention the overall performance of the firm. You also need to mention about the firm's performance in terms of profitability, economic and physical efficiency, financial position. You also need to report whether they are operating the business in terms of optimum farm size.) At the end of the report, you also need to mention the ways to improve in the case of underperformance Step by Step Solution
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