Welcome to the Farm Business Analyser Menu Page

The OMAFRA Farm Business Analyzer is a farm analysis program designed calculate profitability, solvency
strength), financial efficiency and debt servicing capacity. The program allows you to enter financial information fr
income tax statement and uses it to analyse your business performance. Your farm business can be compared w
benchmark information from farms who have participated in the Ontario Farm Management Analysis Project. A “
analysis section allows you to see the results of changing revenue, variable expenses and family living costs.

Developed by Rob Gamble **

Finance and Business Structures Program Lead
OMAFRA, Guelph
email: rob.gamble@omafra.gov.on.ca
January 2001
** This version was developed from an earlier version designed
by Rob Gamble and John Anderson
er Menu Page

ogram designed calculate profitability, solvency (financial

program allows you to enter financial information from your
ormance. Your farm business can be compared with
e Ontario Farm Management Analysis Project. A “what if”
nue, variable expenses and family living costs.
 STATEMENT OF FARMING ACTIVITIES
Name: Social Insurance Number
Year Month Day Was 1998 your final
For the period Year of Farming?
Farm

Name Shaded Section Does Not Need to be Filled Out

Farm
Address
Municipality
and Province
Accounting Main Product
Method Cash X Accrual or Service Swine
Name and Partnership
Address of identification number
Person or Tax Shelter
Firm Preparing identification number
this Form Your percentage
Business Number of the partnership
Income
Wheat
Oats
Barley
Mixed Grains
Corn
Canola
Flaxseed
Soyabeans 40,000
Other Grains and Oilseeds
Total grains and oilseeds 40,000
Fruit
Potatoes
Vegetables (excluding potatoes)
Tobacco
Other crops
Greenhouse and nursery products
Forage Crops
Livestock sold
- Cattle
- Swine
- Poultry
- Sheep and lambs
- Other animal specialties
Eggs
Milk and Cream
Other Commodities
Custom or contract work, and machine rentals
Insurance proceeds
Patronage Dividends
Program payments
- Dairy subsidies
- Crop Insurance
- Other payments
Rebates
Other Income

Total Other Income (See attached)

Gross Income
Gross Income
Expenses (enter business portion only)
Building and fence repairs 4,000
Clearing,leveling, and draining land -
Containers and twine 500
Crop insurance, GRIP, and stabilization premiums 200
Machinery expenses
- Gasoline, diesel fuel, and oil 80,000
- Repairs, licenses, insurance 10,000
Other insurance 2,000
Interest 35,000
Motor vehicle expenses ( not including CCA ) 800
Office Expenses 300
Legal and accounting fees 1,000
Property Taxes 3,000
Rent ( land, buildings, pasture ) 2,000
Salaries, wages, and benefits(including employer's contribution) 10,000
Small tools 2,000
Custom or contract work, and machinery rental 6,000
Electricity 6,000
Feed, supplements, straw, and bedding 53,000
Fertilizers and lime 8,000
Heating fuel
Livestock purchased 2,000
Pesticides(herbicides, insecticides, fungicides) 3,000
Seeds and plants 4,000
Insurance program overpayment recapture
Veterinary fees, medicine, and breeding fees 3,200
Optional inventory adjustment included in 1997 -
Mandatory inventory adjustment included in 1997 -
Other Expenses
See attached -
Total Other -
Subtotal of all expenses 236,000
Capital Cost Allowance ** see note on depreciation below 20,000
Allowance on Eligible Capital Property -
Total Farm Expenses 256,000
Net Income (loss) before adjustments
Optional inventory adjustment included in 1998 These figures will not be used
Mandatory inventory adjustment included in 1998 in the calculation of net income
Total of above three lines
Your Share
Minus - Other amounts deductible from your share of net partnership income (loss)
Net Income (loss) after adjustments
Minus - Business use of home adjustment
Your net income ( loss )
 ADDITIONAL INFORMATION REQUIRED

Change in value of inventory : (+/-) 20,000

Value of Unpaid Labour 0
Total Assets 600,000
Operating Loan and Accounts Payable 100,000
Change in Operating Loan - use minus if operating loan decreased -25,000
Change in Accounts Payable 3,000
Total Term Debt - including the current portion due this year 161,000
Term Borrowings in year 15,000
Bank Balance Beginning of year 5,000
Bank Balance End of year 4,500
Capital Sales 13,500
Capital Purchases 28,000
Living Expenses 35,000
Principal Payments 10,000
Owners' contribution ( Off Farm ) 5,000
mber
Yes No
X
Acres

Owned 150
Acres
Farmed 200
Postal
Code
Industry
Code 0111

100

40,000

150,000
30,000

35,000
 5,000

10,000
270,000
 270,000

These figures will not be used

in the calculation of net income

256,000
14,000

14,000
14,000

14,000

14,000
Source
Farm Records
Estimate
Farm Records
Bank
Bank

Bank
Bank
Bank
Bank
Income Tax
Income Tax
Farm Records
Bank
Farm Records
Farm Business Analyser
Analysis Benchmarks **
Profitability Your Business Dairy Swine FF Beef Feedlot
Net Income (Accural) $34,000 $75,008 $70,267 $47,824
Return On Assets 11.5% 5.3% 6.6% 5.0%
Return On Equity 10.0% 5.0% 6.9% 4.3%
Solvency (Financial Strength)
Equity 56.5% 79.7% 63.6% 62.9%
Financial Efficiency
Cost of producing $1 dollar of product $0.77 $0.60 $0.64 $0.77
Variable Costs as a % of Revenue 71.9% 55.5% 66.7% 88.5%
Interest Coverage Ratio 1.97 4.03 2.96 2.14
Debt Servicing Capacity
Cash available to service additional debt:
- before accounting for depreciation -$6,000 -$3,735 -$9,040 -$39,743
- after accounting for depreciation -$26,000 -$35,676 -$45,231 -$70,993
** source of benchmarks - 1999 Ontario Farm Managem

The "What If" Analysis - Use this section to evaluate the following changes
Increase or decrease Revenue by (+/-): 10.00%
Increase or decrease Variable Expenses by (+/-): -10.00%
Increase or decrease Family Living by (+/-): -5.00%

Change
Change Change
Current Variable
Revenue Family Living
Expenses
Net farm Income $34,000 $63,000 $53,400 $34,000
Cost of producing $1 dollar of product $0.77 $0.69 $0.67 $0.77
Variable Costs as a % of Revenue $0.72 $0.65 $0.65 $0.72
Cash available to service additional debt:
Before accounting for depreciation ($6,000) $21,000 $13,400 ($4,250)
After accounting for depreciation ($26,000) $1,000 ($6,600) ($24,250)

DEBT SERVICING CAPACITY

PREVIOUS YEAR
+ Farm Cash Revenue $270,000
- Farm Cash Expenses $236,000
= Net Cash from Operation $34,000
+ Interest Payments $35,000
+ Owner's Contributions $5,000
- Owner's Withdrawals $35,000
Cash Available For Principal and Int. $39,000
Principal and Interest Payments 45,000
Cash Available After P & I Payments ($6,000)

Depreciation or Reserve for Asset Acquisition $20,000

Debt Servicing Capacity ($26,000)

Input from Income Tax Page

Total Cash Revenue $270,000
Total Variable or Operating Expenses $194,000
Total Fixed Expenses (includes depreciation) $62,000 Fixed expenses are highlighted in blue on the input pa
Changes in the Past Year
Value of Inventory change?(+or-) $20,000
Value of Purchased Feed $53,000
Value of Purchased Livestock $2,000
Value of Unpaid Labour $0
Total Assets $600,000
Operating Loan and Accounts Payable $100,000
Term Loans including the current portion $161,000
Living Expenses (Including Income Tax) $35,000
Current Principal Payments $10,000
Current Total Interest payments $35,000
Owners Contribution to the Business $5,000
Depreciation $20,000 See note on depreciation on the input page
 Benchmarks **
Beef Cow Cash Crop
$25,426 $55,070
6.1% 4.7%
6.4% 4.3%

88.0% 70.1%

$0.52 $0.70
54.6% 50.2%
12.81 2.67

$17,242 -$35,485
$5,447 -$75,260
* source of benchmarks - 1999 Ontario Farm Management Analysis Project

Impact of
Combined
Changes
$82,400
$0.58
$0.59

$42,150
$22,150
Fixed expenses are highlighted in blue on the input page
 DEBT SERVICING WORKSHEET
(When using as a projection, include new loans)
DEBT SERVICING REQUIREMENTS
For the Period:

CURRENT LIABILITIES Balance Interest

Accounts Payable Start of Year Rate
Desciption 0%
$0 0%
$0 0%
$0 0%
Total Accts. Payable $0

Operating Loan
Loan Description $0 0%
$0 0%
Total Operating Loan $0

TERM LIABILITIES Balance Interest

Start of Year Rate
Loan Description $0 0%
$0 0%
$0 0%
$0 0%
$0 0%
$0 0%
$0 0%
$0 0%
$0 0%
Sub Total 0
Grand Total 0

Total Interest and Principal Payments

DEBT SERVICING CAPACITY

PREVIOUS YEAR
+ Farm Cash Revenue $0
- Farm Cash Expenses $0
= Net Cash from Operation $0
+ Interest Payments $0
+ Owner's Contributions $0
- Owner's Withdrawals $0
Cash Available For Principal and Int. $0
Principal and Interest Payments 0
Cash Available After P & I Payments $0

Reserve for Asset Acquisition $0

Debt Servicing Capacity 0
WORKSHEET
clude new loans)
Name:

Annual Payments Balance

Interest Principal End of Year
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0

$0 $0 $0
$0 $0 $0
$0 $0 $0

Annual Payments Balance

Interest Principal End of Year
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
0 0 0
0 0 0

PROJECTED YEAR
+ Farm Cash Revenue $0
- Farm Cash Expenses $0
= Net Cash from Operation $0
+ Interest Payments $0
+ Owner's Contributions $0
- Owner's Withdrawals $0
Cash Available For Principal and Int. $0
Principal and Interest Payments 0
Cash Available After P & I Payments $0

Reserve for Asset Acquisition $0

Debt Servicing Capacity 0
STATEMENT OF CHANGE IN FINANCIAL POSITION

OPERATIONS
Cash Revenue 270,000
Cash Expenses 236,000
Net Contributions (Use) from Operating 34,000

FINANCING
Increase (Decrease) in Operating Loan ($25,000)
Term Borrowings 15,000
Term Payments 10,000
Owner's Contributions 5,000
Owner's Withdrawals 35,000
Net Contributions (Use) from Financing ($50,000)

INVESTING
Sale of Capital Assets 13,500
Purchase of Capital Assets 28,000
Net Contributions (Use) from Investing ($14,500)

NET CHANGE IN CASH ($30,500)

PROOF
Ending Cash 4,500
Beginning Cash 5,000
Net Changes in Cash ($500)

CASH DISCREPANCY (30,000)