Farm Financial Statements

Knowing the financial position of the farm is very important to the future success of the business.  Identifying that position and overall performance of a farm business is summarized through several important financial statements. These statements illustrate various aspects of the business including net worth, profitability, and cash flow. 

Information from these statements can be very useful, including:

  • Making important financing, operating, and investment decisions
  • Provide needed information for credit applications
  • Analyze the performance of the farm business
  • Create budgets for use in planning

 

Balance Sheets

The balance sheet provides a snapshot of a business’ assets, liabilities, and its net worth (also known as owner equity).  The balance sheet should be produced at least once a year at the end of the fiscal year.

Balance Sheet Forms

 

Income Statement

The income statement provides a measure of the profitability of a farm or business over a specific period of time (often a calendar year).  It shows all of the income and expenses from inventories and cash transactions for the farm.

Income Statement Forms

 

Cash Flow Statement

The cash flow statement provides information on how changes from the balance sheet and cash transactions (income) affect the farm business’ overall cash position.  It analyzes how cash was used to meet financing, investing, and operating activities during a specific period.

Cash Flow Statement Forms