chart of accounts rancher joe needs your help!!! after the recent billiards rancher joe realizes...
TRANSCRIPT
Chart of AccountsChart of Accounts
Rancher Joe needs your Rancher Joe needs your help!!!help!!!
After the recent billiards Rancher Joe After the recent billiards Rancher Joe realizes that he will not have enough feed realizes that he will not have enough feed for his entire herd for the remainder for for his entire herd for the remainder for the winter. He has two options: sell his the winter. He has two options: sell his cows or buy more feed. The rancher cows or buy more feed. The rancher
knows that the local sale barn is getting knows that the local sale barn is getting _$1000_$1000_ for bred cows and he also knows _ for bred cows and he also knows that sorghum hay is priced at that sorghum hay is priced at __$70__$70__per __per
ton. Help Rancher Joe decide what to do!!!ton. Help Rancher Joe decide what to do!!!
Rancher Joe needs your help!!!Rancher Joe needs your help!!!
Can Rancher Joe still make a profit?Can Rancher Joe still make a profit?
Can Rancher Joe still be profitable?Can Rancher Joe still be profitable?
What is the difference What is the difference between profit and between profit and
profitable?profitable?
ProfitProfit- All costs-All income=profit- All costs-All income=profit
ProfitabilityProfitability-The degree at which a -The degree at which a
business is making a profitbusiness is making a profit
Degrees in the FFADegrees in the FFA
In the FFA, it is not acceptable to just In the FFA, it is not acceptable to just make a profit, to receive the Chapter, make a profit, to receive the Chapter, State, and American FFA Degree. To State, and American FFA Degree. To receive these degrees you must have receive these degrees you must have a profitable Supervised Agriculture a profitable Supervised Agriculture Experience Program and earn a Experience Program and earn a specific amount of money.specific amount of money.
Farm and Ranch RecordsFarm and Ranch Records
To determine a profit, farm/ranch records must To determine a profit, farm/ranch records must be kept. be kept.
After creating a record keeping system your After creating a record keeping system your records may be used to:records may be used to: Measure financial conditionMeasure financial condition Provide data over the businessProvide data over the business Assist in obtaining loansAssist in obtaining loans Measure the profitability of each individual enterpriseMeasure the profitability of each individual enterprise Assist in deciding on new investmentsAssist in deciding on new investments Income tax purposes Income tax purposes Prepare a repayment schedulePrepare a repayment schedule
Cash FlowCash Flow
One very important element of record One very important element of record keeping is a cash flow statement.keeping is a cash flow statement. A Cash flow statement incorporates financial A Cash flow statement incorporates financial
records and farm datarecords and farm data A Cash flow is a map to the entire years A Cash flow is a map to the entire years
farm/ranch productionfarm/ranch production A Cash flow is:A Cash flow is:
Divided into monthsDivided into months Divided into enterprisesDivided into enterprises Divided into income and expensesDivided into income and expenses Includes several different types of loansIncludes several different types of loans
CASH FLOWCASH FLOW
PROJECTED EXPENSES BY PROJECTED EXPENSES BY MONTHMONTH JanJan Feb.Feb.
MarcMarchh
ApriAprill MayMay JuneJune JulyJuly Aug.Aug.
SeptSept.. Oct. Oct. Nov. Nov. Dec.Dec. TOTALTOTAL ACTUALACTUAL
Cash Balance--Cash Balance--BeginningBeginning 00 00 00 00 00 00 00 00 00 00 00 XXXXXXXXXX 00
SALE OF CURRENT ITEMSSALE OF CURRENT ITEMS
CropsCrops 00
Market LivestockMarket Livestock 00
Other (List)Other (List) 00
00
00
00
TOTAL SALESTOTAL SALES 00 00 00 00 00 00 00 00 00 00 00 00 00 00
CAPITAL SALESCAPITAL SALES XXXXXXXXXX
Breeding LivestockBreeding Livestock 00
MachineryMachinery 00
Other (List)Other (List) 00
00
00
TOTAL CAPITAL SALESTOTAL CAPITAL SALES 00 00 00 00 00 00 00 00 00 00 00 00 00 00
TOTAL INCOMETOTAL INCOME 00 00 00 00 00 00 00 00 00 00 00 00 00 00
OPERATING EXPENSESOPERATING EXPENSESJanJan FebFeb MarMar AprApr MayMay JunJun JulJul AugAug SepSep Oct Oct NovNov DecDec
TotalTotal
ActuActuaall
FeedFeed 00
SeedSeed 00
Machine HireMachine Hire 00
FertilizerFertilizer 00
ChemicalsChemicals 00
RepairsRepairs 00
Gas & OilGas & Oil 00
Medicine and Supplies Medicine and Supplies 00
Market LivestockMarket Livestock 00
Misc.Misc. 00
Other (List)Other (List) 00
00
00
00
00
00
TOTAL OPERATING TOTAL OPERATING EXPENSEEXPENSE 00 00 00 00 00 00 00 00 00 00 00 00 00 00
CAPITAL PURCHASESCAPITAL PURCHASES Jan Jan FebFeb
MaMarr AprApr
MaMayyJunJun JulJul
AuAuggSeSe
ppOctOctNoNo
vvDeDe
ccTotalTotal
ActuActuaall
LivestockLivestock 00
MachineryMachinery 00
Building, FenceBuilding, Fence 00
Other (List)Other (List) 00
00
00
TOTAL CAPITAL PURCHASESTOTAL CAPITAL PURCHASES00 00 00 00 00 00 00 00 00 00 00 00 00 00
TOTAL EXPENDITURESTOTAL EXPENDITURES00 00 00 00 00 00 00 00 00 00 00 00 00 00
Cash DifferenceCash Difference00 00 00 00 00 00 00 00 00 00 00 00
XXXXXXXXXX
XXXXXXXXXX
Money borrowed this monthMoney borrowed this month 00
Payments on Loan(s)Payments on Loan(s) 00
InterestInterest 00
Cash Balance--EndingCash Balance--Ending00 00 00 00 00 00 00 00 00 00 00 00
XXXXXXXXXX
XXXXXXXXXX
Management with Cash Management with Cash FlowsFlows
Show a profit/loss for individual enterprisesShow a profit/loss for individual enterprises Estimate expenses for each monthEstimate expenses for each month Help determine a production plan for the Help determine a production plan for the
next yearnext year Plan when to repay loansPlan when to repay loans Plan when loans are neededPlan when loans are needed Estimate the timing of purchases and Estimate the timing of purchases and
capital sales capital sales
Why is it important to keep Why is it important to keep accurate records?accurate records?
It allows the owner / operator to look at a picture It allows the owner / operator to look at a picture of each enterprise at any given moment in time.of each enterprise at any given moment in time.
It allows the owner / operator to track all income It allows the owner / operator to track all income and expenses to make wise management and expenses to make wise management decisions based on good financial insight.decisions based on good financial insight.
It allows for financial documentation when It allows for financial documentation when needed by accountants, bankers, and lawyers. needed by accountants, bankers, and lawyers.
Why should you organize your Why should you organize your records?records?
The ability to organize financial data into charts The ability to organize financial data into charts and spreadsheets allows the owner / operator to and spreadsheets allows the owner / operator to make sound financial decisions based on facts make sound financial decisions based on facts and figures.and figures.
When this data is transformed into a readable When this data is transformed into a readable printout, any person involved with the operation printout, any person involved with the operation can see where the strengths and weaknesses are can see where the strengths and weaknesses are located.located.
The ability to track the progress of an operation The ability to track the progress of an operation allows the owner / operator to take action to allows the owner / operator to take action to improve specific portions of the operation such as improve specific portions of the operation such as specific expenses or income. specific expenses or income.