AG2007. How to Interpret Financial Measures and Ratios
This session includes an analysis of the Farm Financial Standards Council's (FFSC) recommended financial measures and ratios for agriculture. This session will review how each of the financial measures are calculated, what they reveal and what they don't reveal. Further, the session will help users understand the challenges and caveats of using these financial measures to understand an agricultural operation's financial strengths and weaknesses. Further focus will be provided to help users determine how to evaluate each of the financial measures in determining what is considered strong or weak. And, finally, a review of a recent FFSC survey regarding the usefulness of these financial measures, and considerations being given to new or alternate financial measures for analytical purposes.
Learning Objectives:
- Know how financial measures and ratios are calculated and interpreted
- Illustrate challenges and caveats when using financial measures to assess business performance
- Understand what financial measures and ratios are recommended by the Farm Financial Standards Council