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November 7, 2022
Ag Law Issues
surrounding the reporting of the income from the sale
are well understood … and the IRD Exception
For income tax purposes, the basis … exception to this general rule. Income in respect of decedent (IRD …
August 28, 2015
Financial Management
Executive Summary
Solvency ratios are normally used as an indicator of the long‐term viability of the farm business. Farms with
high leverage have a greater likelihood of going bankrupt. Bankruptcy occurs because a farm loses its equity.
However, for a farm to lose equity, it must generate negative profits, which might imply that highly leveraged farms
are earning less profit than those farms without debt. Thus it might be possible to predict future profitability based on
solvency ratios. This paper tests that hypothesis but finds a naïve model of looking at past profit to predict future
profits works the better than using solvency ratios.
Introduction
The Farm Financial Standards Council currently lists 21 ratios that can be used to evaluate a farm business.
Three of these ratios are solvency ratios. Solvency ratios assess the amount of debt capital used by a farm business
and help determine whether the business can meet long‐term obligations. Any business that uses debt capital incurs
an obligation to make principle and interest payments. If a business has too much debt, periods of low profitability
can lead to insufficient cash flow to cover the principle and interest. Thus, the use of debt increases the financial risk
of a farm business and the likelihood the farm business might become insolvent.
While solvency ratios are designed to measure a company’s financial health, can they also be used to predict
future profitability? Because debt capital introduces interest expense to a farm business, net farm income will be
lower compared …
August 28, 2015
KFMA Research
Executive Summary
Solvency ratios are normally used as an indicator of the long‐term viability of the farm business. Farms with
high leverage have a greater likelihood of going bankrupt. Bankruptcy occurs because a farm loses its equity.
However, for a farm to lose equity, it must generate negative profits, which might imply that highly leveraged farms
are earning less profit than those farms without debt. Thus it might be possible to predict future profitability based on
solvency ratios. This paper tests that hypothesis but finds a naïve model of looking at past profit to predict future
profits works the better than using solvency ratios.
Introduction
The Farm Financial Standards Council currently lists 21 ratios that can be used to evaluate a farm business.
Three of these ratios are solvency ratios. Solvency ratios assess the amount of debt capital used by a farm business
and help determine whether the business can meet long‐term obligations. Any business that uses debt capital incurs
an obligation to make principle and interest payments. If a business has too much debt, periods of low profitability
can lead to insufficient cash flow to cover the principle and interest. Thus, the use of debt increases the financial risk
of a farm business and the likelihood the farm business might become insolvent.
While solvency ratios are designed to measure a company’s financial health, can they also be used to predict
future profitability? Because debt capital introduces interest expense to a farm business, net farm income will be
lower compared …
December 19, 2022
Ag Law Issues
last crop and reporting the
income along with theincome from the previous year’s … The trust takes a carryover income tax basis in the transferred … is a charity) and uses the income from
the sale to pay the …
March 1, 2012
KFMA Newsletters
reconciles information in
the income statement, the balance sheet … loans received, nonfarm income, and net
transfer in. If … not
keep detailed nonfarm income and expense
information …
Financial Management
Service
1 The federal and state income tax rates outlined in the … comput-
ing deferred taxes. These income tax rates will vary for different … Agricultural Economics
An income tax liability arises from …
2021 Mini-Risk and Profit Conference Presentations
and into 2021
Net Farm Income and Government Program Payments
Kansas … Thoughts
Agricultural Economics
Net Farm Income – Kansas Farm Management … Economics
KFMA Average Net Farm Income and Government Payments
Samp …
February 8, 2021
Ag Law Issues
plans be reviewed? What income tax moves should be made … at possible changes in the income tax world. In Part Two … of the equation.
Federal Income Taxation Possible Changes …
September 1, 2009
KFMA Newsletters
Table 1
also shows projected income per acre as well as
return … KANSAS WHEAT BUDGET
INCOME PER ACRE
Yield Per Acre … Government Payment $12.85
GROSS INCOME PER ACRE $224.80 …
February 1, 2010
KFMA Newsletters
211,173 109,601
Net Farm Income 93,815 46,858 21,734
Total Acres … of farm
production, beef income, total acres, and crop
acres … However, their net farm income,
operating profit margin …