May 2012

Income Statement Worksheet

Use this worksheet to convert Schedule F tax information to an accrual adjusted income statement.

Gross Income (Schedule F Line 11)

Cost of Feeder Livestock Sold (Line 2) +
Crop Insurance Reported (Line 8b) -
Crop Insurance Received (Line 8a) +
Crop Insurance Deferred from Previous Year (Line 8d) -
Cull Livestock Income +
Gross Cash Income (A) 0

End Invent - Beg Invent

Crops & Feed 0+
Livestock Held For Sale 0 +
Accounts Receivable 0 +
Hedging Accounts 0 +
Other Inventory 0 +
Gross Farm Income (Accrual) (B) 0

Total Expense (sched F, line 35)

Purchases of livestock & other items for resale +
Depreciation (line 16) -
Account Beg Invent - End Invent
Prepaid Expenses & Supplies 0+
Growing Crops 0+
Account End Invent - Beg Invent
Accounts Payable 0+
Accured Interest 0+
Total Operating Expense (Accrual) (C) 0

Depreciation Begin value + Purchases - Sales = Value * % Depr

Machinery 0 10 0
Vehicles 0 15 0+
Buildings 0 5 0+
Breeding Livestock Replacments +
Total Depreciation (D) 0

Total Expense (accural) (E) 0 C+D

Net Farm Income (accural) (F) 0 B-E

© Center for Farm Financial Management, University of Minnesota

 March 2010

Key Ratios Worksheet

Use this worksheet with the income statement and ending balance sheet to calculate the key ratios.

Liquidity: Working Capital to Gross Revenue Vulnerable Strong

Total current assets
Total current liabilities -
Working capital = 0
Gross farm income (B) ÷ 0
Working capital to gross revenue (%) = #DIV/0! ----- 10% --------------- 25% -----

Solvency: Debt to Asset Ratio

Total liabilities
Total assets ÷
Debt to asset ratio (%) = #DIV/0! ----- 60% --------------- 30% -----

Profitability: Rate of Return on Assets

Net farm income (F) 0
Farm interest expense +
Value of labor and management -
Return on farm assets = 0
Total farm assets ÷
Rate of return on farm assets (%) = #DIV/0! ------ 4% ----------------- 8% -----

Profitability: Rate of Return on Equity

Net farm income (F) 0
Value of labor and management - 0
Return on farm equity = 0
Total farm net worth ÷
Rate of return on farm equity (%) = #DIV/0! ------ 3% ----------------- 10% -----

Repayment Capacity: Term Debt Coverage Ratio

Net farm income (F) 0
Depreciation expense (D) + 0
Interest on term debt +
Personal income +
Family living expense -
Income taxes -
Capital debt repayment capacity = 0
Scheduled payments on term debt ÷
Term debt coverage ratio = #DIV/0! ----- 1.20 --------------- 1.50 -----

Efficiency: Asset Turnover Rate

Gross farm income (B) 0
Total farm assets ÷
Asset turnover rate (%) = #DIV/0! ----- 30% --------------- 45% -----

© Center for Farm Financial Management, University of Minnesota