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Using Farm Financial Statements for Better Business Decision Making

Trisha Wagner

Summary

Heart of the Farm - Women in Agriculture is a University of Wisconsin Extension and UW Center for Dairy Profitability program. The Heart of the Farm offered a new program called Using Farm Financial Statements for Better Business Decision Making, designed to improve farm business decision-making by specifically addressing the understanding and use of financial statements.

Intended outcomes of the program were to study core financial information and begin to incorporate financial information into the fabric of farm life, in order to make better business decisions.

A group meeting prepared participants for a meaningful exercise and conversation about financial information and analyses. Participants then completed an assignment to construct their financial statements, and analyze their financial position and performance. While completing this exercise, participants met with program instructors via three weekly webinar meetings. Here progress was monitored and questions answered, uncovering areas where participants had previous challenges working with financial information.

Participants indicated they increased their confidence and knowledge of, and how to use financial statements. Results from the first meeting evaluation found that 80% of the participants said their knowledge of the topics improved from “poor” or “average” to “good” or “excellent”. Participants created their farm financial statements (balance sheet and income statement), calculated financial ratios for their farm, and analyzed their farm financial position and performance. Participants stated an “improvement in understanding farm financial basics” and “using farm statements for profitability analysis, and the steps on how to start making better financial decisions”.

Details

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