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FINPACK through the ages…

FINPACK through the ages…. Arlin Brannstrom, MS, MBA, AAC Faculty Associate, UW Center for Dairy Profitability. FINPACK history. 1970’s dial-up dumb terminals 1980’s DOS based personal computers 1990’s Windows Interface 2000’s Windows with remote support via the Internet.

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FINPACK through the ages…

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  1. FINPACK through the ages… Arlin Brannstrom, MS, MBA, AAC Faculty Associate, UW Center for Dairy Profitability

  2. FINPACK history • 1970’s dial-up dumb terminals • 1980’s DOS based personal computers • 1990’s Windows Interface • 2000’s Windows with remote support via the Internet

  3. Tools for FINPACK support: • Remote Webinars • Citrix Goto Webinar • Adobe Connect • Others • One on one training & support • Citrix GoToMeeting • Adobe Connect • Teaching Labs

  4. FINPACK Audiences: • UW Short Course Students • Extension Agents / Tech College Instructors • Producers • Lenders

  5. FINPACK Components Parts: • Balance Sheets – Asset / Liability Snapshots • FINAN (Financial Analysis of past year) • Annual Plan (Financial project – no changes) • FINLRB (Financial Alternatives steady state 3-5 years out) • FINFLO (Monthly cash flow projections next year)

  6. Tools for Instruction: • Traditional teaching lab • 15-20 students 3x/week for 6 weeks • 1-2 weeks on balance sheets and budgets • 1-2 weeks on FINAN / FINLRB • 2 weeks open lab time to develop a financial plan

  7. Tools for Agent Group Instruction • 10-15 agents via webinars 1-2 hours • Work through case farms • Usually one directional dialog (Instructor only) • Possible alternatives: • Pass keyboard and screen to anyone on the call • Share keyboard and mouse movement between instructor and students.

  8. Tools for One on One instruction • One on one training with specific client cases • Extension Agents • Extension Agents with producers • No direct requests from lenders…

  9. Challenges to financial literacy: • Some loans and loan terms can be difficult to model for example: • Interest only for a specified period • Interest assists tacked on to end of loan • Undocumented accounts payable • Assets difficult to measure and value: • How many tons in a 40x100 bunker 20 feet high? • What’s the value of farm land? Buildings? Mach? • Non-traditional enterprises? Water buffalo, camels? Horse trainers, etc.

  10. Loan Terms and Plan Consistency • Interest rates and terms vary widely • Are principal balances consistent between years? • What values should be assigned to major commodities for long range planning? • Should FINAN results be checked against Schedule F?

  11. Challenges • Agents • Competition for time • General financial literacy • Unfamiliar coefficients and budget data • Conceptual differences between profitability in the long run and cash flow in the interim • Students • General financial literacy • Unfamiliar coefficients and budget data • Conceptual differences between profitability in the long run and cash flow in the interim

  12. Questions for FINPACK trainers • Do we ever take time to follow up to see if the plan was implemented? • Do we know the farmer understands the assumptions implicit in the model? • Can we assume that those with a plan are better off than others?

  13. Questions for other FINPACK trainers: • Is Farm Financial modeling practical for Extension Agents / Ag Lenders? • Is Farm Financial modeling practical for farmers • Is Finpack better suited to financial consultants? • How do we measure modeling competency?

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