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John Power, CPA Power Financial, LLC

Financial Management of Grain Elevators – What’s a Board to Do? North Dakota Grain Dealers Convention January 21, 2013. John Power, CPA Power Financial, LLC. Financial Statement Management. It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy!.

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John Power, CPA Power Financial, LLC

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  1. Financial Management of Grain Elevators – What’s a Board to Do?North Dakota Grain Dealers ConventionJanuary 21, 2013 John Power, CPA Power Financial, LLC

  2. Financial Statement Management • It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy!

  3. Financial Statement Management • It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy! • Balance Sheet Management is just as Important.

  4. Financial Statement Management • It’s more than “Are we making money?” – You can be profitable all the way into bankruptcy! • Balance Sheet Management is just as Important. • Contingency Planning and Risk Management are more important than ever

  5. Know & Understand what Financial Covenants are in your Loan Agreements • Covenants are Negotiable! • Don’t agree to something that is inappropriate or you can’t meet. • Monitor Your Compliance

  6. Common Financial Covenants • Working Capital • Current Ratio • Debt Service Coverage • Debt to Equity or Local Ownership % • Periods of high commodity prices can raise havoc with this ratio.

  7. Common Financial Covenants • Not meeting the loan covenants is grounds for calling the loan…you don’t want that in your financial statement notes!!

  8. Risk Management • Expanding beyond the “traditional” commodities can be good business but brings some new business risks. • Boards need to understand these risks and develop policies. • The sales/collection process is completely different for some commodities. • All it takes is one weak link in the chain!

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