Title: Use financial ratios to make business decisions.
Course: Agricultural Business Management III (18201-36) > Section: Managing Financial Records and Reports

Use should include

- preparing budgets
- analyzing financial statements
  - balance sheets
  - profit and loss (P&L) statements
  - cashflow statements
  - income statement
- identifying spending capabilities
- determining P&L
- financial ratios
  - profitability
  - liquidity
  - leverage
  - operating efficiency
  - business risk
- comparing to a competitor’s financial ratios
- calculating depreciation
- calculating net worth
- managing cashflow risk.

Process/Skill Questions:

- How does one determine P&L?
- When should one complete a P&L statement?
- What is the difference between a cash-flow statement and a P&L statement?
- How might a P&L statement be helpful in applying for loans?
- How is spending capacity determined?
- How often should one do an analysis of their financial records?
- How is net worth calculated?
- What are liabilities? How are they identified?
- What is tax depreciation?
- What are some resources that could help calculate depreciation?
- Why is it important to be able to calculate net worth?
- What are some examples of assets that should be listed?
- What is net income?
- What are the additional considerations (e.g., health insurance, social security contributions) when building a small business budget?