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Fundamentals Of Financial Management. Original Power Point Created by Steve Richards for CCE Wyoming & Erie Counties Modified by Georgia Agriculture Education Curriculum Office June, 2002. What Is Farm Management?.
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Fundamentals Of Financial Management Original Power Point Created by Steve Richards for CCE Wyoming & Erie Counties Modified by Georgia Agriculture Education Curriculum Office June, 2002
What Is Farm Management? The ability to use resources in an efficient manner so as to maximize returns to: • Business goals • Personal goals
Personal Vs. Business Goals Personal goals and business goals require the same things: • Money • Moderate to strong financial performance • Growing equity in the business every year
Achieving Your Goals REQUIRES FINANCIAL MANAGEMENT!!
What Is Financial Management? • The ability to allocate financial resources in the areas which generate the greatest returns.
Financial Management Decisions • Pricing your product • Making changes in your business • Making business decisions • Investment decisions
Pricing Your Product • One of the most critical components of marketing. A common concern! • Critical in achieving sales and profitability • Need to know your costs of production
Making Business Changes • Input substitution • Capital for labor: buying a transplanter • Buying vs. Raising plugs • Enterprise changes • Whether or not to raise a particular product • Adding another operation to your business
Making Business Decisions • Are your sales covering your costs • Which products generate the most income • Should you produce or shut down • Optimum mix of products • Contributions to fixed costs • Goal setting and increased efficiency
Making Investment Decisions • Capital purchases • Should I expand my greenhouse? • Should I buy a new watering system? • Which is best investment for my money? • How can I maintain strong financial performance?
How To Make Sound Financial Decisions? • Good record-keeping • Construct financial statements • Perform financial analysis • Participate in benchmarking
Good Record Keeping • Keep records for more than just taxes! • Use a computer! • Financial information should be at your fingertips at all times
Constructing Financial Statements • Income statement, balance sheet, cash flow statement • Banks require these statements • Can often be tedious to complete
Perform Financial Analysis • Cost analysis • Ratio analysis • Enterprise analysis
Participate in Benchmarking • How do you compare to other firms in the industry? • Set performance goals • Track your performance over time (trend analysis)
How Can I Do All This? GREENHOUSE BUSINESS SUMMARY
Why Participate? • Prepares Financial Statements • Performs Financial Analysis • Compiles a Financial Benchmark Database • It’s FREE!!
Objectivesof GHBS: • Improve financial management skills • Help producers set future goals • Make progress towards goals
What Do I Need? Record of all cash receipts & expenses Asset Inventory General Business Info.
How Do I Start? • Wen-fei Uva 607-255-3688 [wl32@cornell.edu] • Steve Richards 716-786-2251 [str4@cornell.edu] • SIGN UP TODAY! SEE BACK PAGE!