Term
| 4 general business strategies |
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Definition
Low volume, hi value producers
Hi volume, low margin producers
specialty product/service providers
part time operators |
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Term
| factors that affect current mgmt |
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Definition
consumer's changing needs=producers must have it all! niche mkts are more important
information changes
job appeal outside of the farm
technology
environmental and health concerns |
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Term
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Definition
planning
implementation
control |
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Term
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Definition
choose course of action
-Establish goals
-ID and allocate resources |
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Term
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Definition
Set plan in motion
-Manager must acquire resources
-Supervise process |
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Term
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Definition
"feedback" function
-collect and analyze data
-corrective action |
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Term
| Factors affecting the decision-making environment |
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Definition
Fixed supply of land
biological processes/weather
small size (staff-wise)
Perfect Competetion? (producers are price takers) |
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Term
| Why are records important |
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Definition
assess financial condition
assist in obtaining loans
measure profitability
assist in analysis of new investments
prep. income tax returns |
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Term
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Definition
production
investment
financing
**Keep records of these** |
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Term
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Definition
| involve activities related to production of crops and livestock (revenue and expenses included) |
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Term
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Definition
| relate to purchase, depreciation, and sale of long-lived assets |
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Term
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Definition
| relate to borrowing money and paying interest and principal on loans |
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Term
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Definition
| An expense that must be taken into account beyond an operations' fiscal year |
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Term
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Definition
Account payable
Debt
Expense
Liability
*Credit |
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Term
| Money people owe you or money you have ( |
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Definition
Account payable
asset (if liquid)
*Credit
inventory (if liquid)
Owner equity |
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Term
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Definition
the money you have after all
liabilities are paid off and all assets are sold
determined by adding:
-capital contributed by owner
-retained earnings
-when mkt values change (how in-demand are your products??) |
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Term
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Definition
measure of how quickly a business can turn its assets into cash
business is more liquid if it can do this and make more money than another (bc the term is relative)
USE CURRENT RATIO |
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Term
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Definition
measures relations among assets, liabilities, and equity
-Use debt/asset ratio
-equity/asset ratio
-debt/equity ratio |
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Term
| What is on balance sheet? |
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Definition
-owner equity
-liquidity
-solvency
-net capital ratio
-debt structure ratio |
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Term
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Definition
-"snapshot" of how business is doing
-How am I doing today?
-can be complete at any time
-helps get loans |
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Term
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Definition
-"film" of business over time
-How much will I make?
-summarizes effects of transactions over time |
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Term
| Income statements and balance sheets come from.... |
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Definition
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Term
| 2 types of accounting systems |
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Definition
Cash (only recorded when cash is recieved)
Accrual(recorded at time of production)
Neither give complete picture, but complement each other |
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Term
| Income Statement includes... |
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Definition
| ROA, ROE, Operating profit margin ratio, return to labor and mgmt |
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Term
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Definition
| annual loss in value of durable assets |
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Term
| when to use straight line depreciation |
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Definition
| when annual depreciation will be the same every year |
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Term
| current vs. noncurrent assets |
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Definition
current=liquid
noncurrent=everything else, more difficult to sell |
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Term
| current vs. noncurrent liabilities |
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Definition
current: due w/in the current fiscal year
noncurrent: due sometime beyond current fiscal year |
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Term
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Definition
Define the mission of the business
Formulate the goals for the farm and family
Assess the resources available to the business (internal scanning)
Survey the world surrounding the business (external scanning)
Identify and select appropriate strategies
Implement and refine the selected strategies |
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Term
| structure of balance sheet |
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Definition
Assets shown on left or top
Liabilities are shown on right or below assets |
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Term
basic accounting equation
what is it an where is it fount? |
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Definition
found on balance sheet
Assets+liabilities= owner's equity |
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Term
| structure of income statement |
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Definition
depends on whether you are using cash vs. accrual
basically, revenue-expenses=net farm income (over a period of time, projected income) |
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