How’s business? There’s an app for that

Free online tool can tell you exactly how your farm is doing 
financially and create a financial plan for the coming year

An online tool for analyzing the performance of your farm business has been upgraded, along with some additional user assistance for the software.

The Agricultural Business Analyzer is a set of Excel spreadsheets designed for a farm business. It helps producers prepare the three key financial documents: a balance sheet (that measures net worth), income/expense statement (or profit/loss statement), and cash flow statement (that measures changes in a business’s financial position).

“The understanding, analysis and interpretation of these financial statements is important for good farm decision-making,” said provincial farm financial specialist Rick Dehod. “The program can help analyze the financial strength of a farm business and provide producers with the information to make informed decisions.”

To help producers use the online tool, there is also a video tutorial, frequently asked questions, and Excel program user tips. The tool can be found at agriculture.alberta.ca.

Using the tool, producers can review up to five years of historical financial data and prepare and analyze a financial plan for the upcoming year. Projections start with an opening net worth statement, and then information on past and projected income and expenses for the coming year can be entered into the program and analyzed. Incomes and expenses for the upcoming year, along with expected monthly cash flows from operations, capital investments, financing and other farm cash flow activities are then entered into the program.

“In addition, the program calculates key ratios in the areas of liquidity, solvency, profitability and efficiency for both the past and projected income and financial statements, and compares them to industry benchmarks,” said Dehod.

Provincial officials are also holding two information sessions on using the analyzer in Leduc on Feb. 17 and Airdrie on Feb. 18. Both sessions run from 1 to 3:30 p.m. To register, call 1-800-387-6030.

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