University of Maryland Extension

cash flow

Summary

Urban Ag home | Table of contents Understand profit and cash flow is paramount to the success of the business. Profitability measures the amount of farm income generated from sales of goods and services over and above the expenses required to generate that income. An income statement is used to...

Recordkeeping

Urban Ag home | Table of contents A manager of a farm needs a good record keeping system to analyze profit and cash flow. Many businesses will contract out their accounting to an accounting firm. These firms typically use generally accepted accounting principles and produce standardized financial...

Solving cash flow problems

Urban Ag home | Table of contents Most farms at one time or another experience cash flow problems. The cash flow budget is one of the best ways to pinpoint these problems, but it will not solve cash flow problems, rather it reveals symptoms of problems. Measures can then be taken to deal with the...

Usefulness of cash flow

Urban Ag home | Table of contents The cash flow is one of the most useful tools a farm manager has for managing the business. The reason that a cash flow budget is useful is because it forces you to think through all production and marketing aspects of your business. As mentioned before, many...

Example farm cash flow

Urban Ag home | Table of contents Figure 4 illustrates the cash flow for the farm in the previous example. A link to download editiable versions of these spreadsheets is at the bottom of this page. The income statement is also included to contrast the similarities and the differences in these two...

Income & expenses versus inflow & outflows

Urban Ag home | Table of contents Figure 3: The calculations to determine profit and cash are similar, but include different kinds of income and expenses. The text of this section explains these differences, marked by numbers in the figure and the text to help you refer back and forth. A cash flow...

Cash flow periods

Urban Ag home | Table of contents Cash flow usually covers the same production period as the income statement but cash flow is almost always broken down into smaller time periods such as a quarter or a month. For each period, the cash flowing out of the business is subtracted from the cash flowing...

What is cash flow?

Urban Ag home | Table of contents Another important economic measurement is cash flow. Cash flow is closely related to profitability but there are significant differences. While profit is concerned with the income versus expenses for a production period such as a calendar year, cash flow is...

Chapter 2: Economic assessment and risk management

Urban Ag home | Table of contents Dale M. Johnson Extension Specialist, Farm Management University of Maryland Extension Most of the work of a farm is in producing and marketing crops and livestock. But will this effort be economically viable? And what are the economic risks? These are questions...
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