| ||Alberta Agriculture and Forestry’s (AF’s) Agricultural Business Analyzer (ABA) has recently been upgraded, and user support has been enhanced with a user video tutorial, frequently asked questions (FAQ) and Microsoft Excel program user tips. To further assist producers to better understand the Agricultural Business Analyzer, two information sessions are planned for February 17, 2016, in Leduc and February 18, 2016, in Airdrie.
“The Agricultural Business Analyzer (ABA) is a free and powerful analysis tool,” says Rick Dehod, farm financial specialist, AF, Edmonton. “The basis of sound management of any agricultural business is accurate and timely record keeping and preparation of financial statements consisting of a balance sheet or net worth statement, profit/loss or income/expense statement, and the statement of changes in financial position or cash flow statement. The understanding, analysis and interpretation of these financial statements is important for good farm decision making. The program can help analyze the financial strength of a farm business and provide producers with the information to make informed decisions. When completed, ABA statements can even be submitted to financial institutions for loan applications or annual reporting.”
Using the ABA, 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 done 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.
“From this data, the ABA 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,” explains 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. The result of the completed ABA analysis will assist farm business managers in managing their businesses profitably and develop risk management mitigation strategies to address those financial areas that are weak or identified by ABA as being 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.”
These sessions will commence at 1 p.m. and run to 3:30. The agenda will cover::
- what ABA is and what it does
- how to access and download ABA
- resources on the ABA homepage - ABA download, user guide, FAQs, excel tips, and video tutorial
- how ABA can be used as a decision making tool, using your numbers to access different financial scenarios (Land purchase, operating plans, etc
- questions and discussion
To register for the agricultural business analyzer information sessions, call the Ag-Info Centre at 1-800-387-6030
The Agricultural Business Analyzer is available here.
For more farm business management information, visit the Farm Manager Homepage