AgriBusiness Management

1. Concept and scope of Financial management.

Financial management means planting, organizing, directing and
controlling the financial activities such as procurement and utilization of
fund of the enterprise.
 Scope of Financial Management
a) Investment decisions includes investment in fixed assets (called as
capital budgeting). Investment in current assets are also a part of
investment decisions called as working capital decisions
b) Financial decision- they relate to the raising of finance from
various resources which will depend upon decision on type of
source, period of financing, cost of financing and the returns
thereby.
c) Dividend decision – the finance manager has to take decision with
regards to the net profit distribution. Net profit are generally
divided into two:
1. Dividend for shareholders- dividend and the rate of it has
to be decided.
2. Retained profit- amount of retained profits has to be
finalized which will depend upon expansion and
diversification plans of the enterprise.
2. Concept and scope of agribusiness
 Agribusiness includes all the activities within the agricultural food and
natural resource industry involved in the production of and fiber.
Individual agribusinesses may sell items to farmers for production;
provide services to other agricultural businesses; or be engaged in the
marketing, transportation, processing, and distribution of agricultural
production.
 Scope of Agribusiness
 A degree in agribusiness offers opportunities to be involved in areas
such as production, finance, sales and land management.
Agribusiness is concerned with the financing, marketing, and
management of food production. It is growing industry that provides
wide range of career options.
3. History of Agribusiness

 The history of agribusiness comes from the concept of agribusiness of

John H. Davis and Rey A. Goldberg in 1957. Davis and Goldberg opinion
that the agricultural sector was perpetuated by New Deal policy,
government intervention and outlined a way to use the political economy
to shift the sector toward the privatization. They claimed that the large
corporation were key to revolutionizing the food and fiber economy. They
purported that it what is happening off the farm that is the key in
agribusiness.
4. Roles of financial management in agribusiness.
  The role of financial management in agribusiness is to keep the important
record or data in business activities. The record keeping is use in financial
statement and use as a guide in business activities.
5. What are the role of financial manager for agribusiness? Who can be the financial
manager?
 Financial manager ensures the financial health of an organization through
investment activities and long term financing strategies.
 Role of financial manager
The financial manager is required to give advice for a company on farm
financial well-being. The job holder conducts strenuous record keeping
and oversee management accounts, company budgeting, and the
administration of accounting tasks.
 Responsible for daily administration of financial and accounting
practices of business
 Perform accounting duties as directed including budgeting and
costing control
 Responsible for costing and pricing of stock items, including in-
progress and finished product
 Responsible for calculating cost pricing of work in progress stock
items
 Assist management in preparing documentation for budgeting and
financial reporting procedures
 Analyze and report on project and product costing
 Create production of daily and periodic cost statement
 Interpret the statistical and accounting information to appraise
operating result s in terms of cost, budgets, and policies of
operation, trends and increased profit possibilities
 Maintain general ledger
 Develop accounting and financial management system and report
 Analyze and interpret monthly operating or project performance
against budget
 Budget complication and control with analysis of monthly report
against budgets
 Financial manager can be the controller, treasurers and financial officer
and credit manager.
6. How will you know if an enterprise is losing or gaining?
 The enterprise is gaining if the business slowly expanding and the product
is increasing. While the enterprise is losing if the business owner is
controlling the input of the business.
 Example: The company owner has new branch of her/his business
7. What are the factors that affects the failure of a certain business?
 Inexperienced management team
 Underestimating the importance of cash flow
 Differentiates
 Lack of focus
 Not knowing about your competitors
  Declining markets
 Not seeking a professional advice
8. If you an agribusiness manager will you be hiring your financial manager or not?
 Yes, I will hire my financial manager because they have the ability to
organize, plan and advice about business activity. They have the
knowledge in budgeting and financing in business.
9. What are the different financial statements?
 Financial statement represents a formal record of the financial activities
of an entity. These are written reports that quantify the financial strength,
performance and liquidity of a company. Financial statements reflect the
financial effects of business transaction and events on the entity.
 Four type of financial statements
 Statement of financial position-also known as the balance sheet,
presents the financial position of an entity at a given date. It
comprised of the following;
 Assets; Something a business owns or controls (cash,
inventory, plants and machinery)
 Labilities; Something a business owes to someone
(creditors, bank loans, etc)
 Equity; What the business owes to its owns. /this
represents the amount of capital that remains in the
business after its assets are used to pay off its outstanding
liabilities. Equity therefore represents the difference
between the assets and liabilities.
 Income statement-also known as the profit and loss stamen,
reports the company’s financial performance in terms in net profit
or loss over a specified period. Income stamen is composed of the
following;
 Income; What the business has earned over a period (sales
revenue, divided income, etc)
 Expense; The cost incurred by the business over a period
(salaries and wages, depreciation, rental charge, etc)
 Cash flow statement-represents the movement in cash and bank
balances over a period. The movement in cash flows is classified
into the following segment;
 Operating activities; Represent the cash flow from primary
activities of business.
 Investment activities; Represents cash flow from purchase
and sale of assets other than inventories (purchase of
factor plant)
 Financial activities; Represents cash flow generated or
spent on raising and repaying share capital and debt
together with the payment of interest and dividends.
 Statement in change in equity-also known as the stamen of
retained earnings, details the movement in owners’ equity over a
 period. The movement in owners’ equity is derived from the
following components;
 Net profits or loss during the period as reported in the
income statement
 Share capital issued or repaid during the period
 Dividend payments
 Gains or losses recognized directly in equity (revaluation
surpluses)
 Effect of a change in accounting policy or correcting of
accounting error
10. After finishing your degree in agriculture how can you see yourself 5-10 years.
Will you be having your own agribusiness or what? Why?
 May future after 10 years is to earn money and start small business for
own family. I will buy a small farm to start new business.

Student Name: Julius L. Telan

Prof; Diane V. Ole

References
http://www.toppr.com/guide/business-environment/business-functions/financial-
management/
http://ruralam1.blogspot.com/201710/scope-and-importance-of-agribusiness_18.hml?
m=1
http://www.educationword.in/career-scope-of-agribusiness;management/
http://www.sciencedirect.com/science/article/pii/S0080210716307531
http://ecosystemsunited.com/2019/02/25/the -origins-and-history-of-agribusiness
http://www.careerexploxer.com/careers/financial-maneger/
http://coures.lumenlearning.com/boundless-busness/chapter/introduction-
to;financial-management/
http://moenawz.com/posts/7-causes-of-business-failure/
http://accounting-simplified.com/financial/statements/types.html