New version of ag business analyzer now available

The online tool can be used to measure a farm’s financial health and identify problem areas

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Alberta Agriculture and Forestry’s Agricultural Business Analyzer has recently been upgraded, and user support has been enhanced with a user video tutorial, frequently asked questions, and Microsoft Excel program user tips.

The online tool is free and powerful, said 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,” said Dehod.

Statements produced by the analyzer can even be submitted to financial institutions for loan applications or annual reporting, he added.

Using the analyzer, farm business managers 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 (forward for one 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.

This creates a closing financial statement illustrating what the financial situation of the farming operation will be at the end of one year based on its projections, said Dehod.

“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,” he said.

The program also highlights financial areas that may be weak or risky.

“Farm business managers can also assess the financial impact of their business decisions (such as purchasing more land, machinery, renting more land, and taking on more debt) on their businesses going forward into the future.”

The new version of the analyzer is compatible with current Windows operating systems and latest version of Microsoft Excel 2013.

To view the analyzer, go to agriculture.alberta.ca.

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