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The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
The Balance Sheet.ppt
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The Balance Sheet.ppt

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  • $42,341 increase in net worth $49,400 increase in assets Increase livestock being held for sale could have been capital assets $7,000 increase in liabilities
  • Transcript

    • 1. The Balance Sheet
    • 2. Assets = Liabilities + Equity
    • 3. Balance Sheet
      • Is Statement of Financial Position
      • Not necessarily the value of a business
      • Only an estimate of market Value
    • 4. Balance Sheet
      • Assets of a business ultimately valued by their ability to generate revenue
      • True value determined from actual sale to third party
    • 5. Primary Financial Statements
      • Balance Sheet
      • Earnings Statement
      • Cash Flow Statement
    • 6. Types of Accounts
      • Assets
      • Liabilities
      • Equity
      • Income
      • Expenses
    • 7. Assets Liabilities Equity Assets Liabilities Equity
      • +/- Net Income
      • +/- Valuation Changes
      • Family living withdrawals
      • + Capital contributions
      Beginning Balance Sheet Ending Balance Sheet
    • 8. Account Valuation
      • All accounts have dollar value
      • Asset Accounts
        • Cost Basis
        • Market Value
    • 9. Current Assets
      • Those that will be realized in cash, sold or consumed in the current operating cycle (1 year)
    • 10. Current Assets
      • Inventories
        • Raised for Sale
        • Raised for use in Production
        • Purchased for Resale
        • Purchased for use in Production
        • Page II-32
    • 11. Valuation Issues
      • Inventories
        • Lower of Cost or Market
        • Blending
    • 12. Non Current Assets
      • Machinery & Equipment
      • Breeding Livestock
      • Buildings & Improvements
      • Land
      • Other
    • 13. Valuation Issues
      • Raised Breeding Stock
        • Full Cost Absorption
        • Base Value Method
        • Page II-36, F-1
    • 14. Current Liabilities
      • Those that will be discharged by use of current assets or creation of additional current liabilities in the current operating cycle.
    • 15. Deferred Taxes
      • Tax liability in event of liquidation
      • Liquidation Value –Tax Basis times tax rate
      • Page II-24
    • 16. Depreciation
      • Allocation of the expense that reflects “using up” of capital assets
    • 17. Depreciation Original Cost – Salvage Value Years of useful Life
    • 18. Depreciation Issues
      • Straight line
      • Accelerated
        • Front end loaded
        • Short life span
      • Section 179
      • Zero Salvage Value
    • 19. Depreciation Issues
      • Capitalize or Expense
        • Small tools
        • Equipment
        • Major repairs
        • Improvements
    • 20. Example Farm’s Balance Sheet 62% 60% 64% % in Debt $216.276 $237.447 $195,106 Net Worth $359,590 $363,119 $356,060 Total Liabilities $575,866 $600,566 $551,166 Total Assets Average Ending Beginning
    • 21. Leverage
      • <40% - Financially Sound
      • 40-70% - Vulnerable
      • >70% - Financial Stress
      • >100% - Insolvent
    • 22. Accounts Receivable Sales Revenue 52 weeks = Weeks to Collect Sales/Week Accts. Receivable Sales/Week =
    • 23. Inventory Cost of Goods Sold Inventory = Inventory Turnover 52 Weeks Inv. Turnover = Average Inventory Holding Time
    • 24. Accounts Payable Inventory Ave. Inv. Holding Time = COGS/Wk Accounts Payable COGS/Wk = Weeks to Pay

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