ppt课件-farmmanagement-departmentofagriculturaleconomics.pptVIP

farm management chapter 6 Farm Management Chapter 6 The Income Statement and Its Analysis Chapter Outline Identifying Revenue and Expenses Income Statement Format Accrual Adjustments to a Cash-Basis Income Statement Analysis of Net Farm Income Change in Owner Equity Summary Chapter Objectives To discuss the purpose and use of an income statement To illustrate the structure and format of an income statement To define the sources and types of revenue and expenses included To show how net farm income is computed and what it means To analyze farm profitability What is an Income Statement? Figure 6-1 Relation between balance sheet and income statement Identifying Revenue and Expenses Revenue: revenue should be recognized as soon as a commodity is ready for sale, whether or not it is actually sold Gain or loss on sale of capital assets: difference between sale price and book value Expenses: all expenses incurred in producing the revenue for an accounting period should be included Income Statement Format Table 6-1 Income Statement Format Accrual Adjustments to a Cash-Basis Income Statement The FFSC recommends that anyone using cash accounting convert the resulting net farm income to an accrual-adjusted net farm income at the end of each year Two adjustments to cash receipts: change in inventory values and accounts receivable Several adjustments to expenses, including accounts payable and accrued expenses Figure 6-2 Adjustments to get accrual-adjusted net farm income from a cash-basis income statement Table 6-2 Income Statement for I.M. Farmer for Year Ending December 31, 20003 Net Farm Income Analysis of Net Farm Income Rate of return on assets Rate of return on equity Operating profit margin ratio Return to labor and management Return to labor Return to management Adjusted Net Farm Income Opportunity Costs of Labor and Management Return to Assets Rate of Return on Assets(ROA) ROA for I.M. Farmer Return on Equity Rate of Return on Equity (ROE) ROE for I.