FARM BUSINESS NEWS
Klinefelter: By the Numbers
Danny Klinefelter DTN Farm Business Advisor
Fri Apr 12, 2013 07:36 PM CDT

In this series on financial fitness, we've been addressing ways you can fight flab in your farm's performance. So far we've discussed measures for liquidity, solvency and profitability. Naturally both you and your lenders have a vested interest in our next criteria, repayment capacity.

One of the things to remember about measures of repayment capacity is that they are developed around accrual net income. As mentioned previously, the short-term ability to generate a positive cash flow margin does not guarantee long-term viability. Long-term survival also requires the business to be profitable.

To my knowledge, there are only three ways that ...

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