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Management Information Systems. Terry DeGroff Burwell, Nebraska Books, Records & Controls. Management is….

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management information systems

Management Information Systems

Terry DeGroff

Burwell, Nebraska

Books, Records & Controls

management is
Management is…
  • Planning, organizing, directing, and controlling a business. The most important and challenging is control… the process of analyzing, evaluating and interpreting the production and financial performance of a business.
  • Can and does come from many sources. Some of the best and most needed information can come from each business’ own financial and production records.
  • Need to be implemented that allow for only necessary record keeping and effective use of records. Summary information from these records should be invaluable in day to day business decisions.




uses and purposes of financial records
Uses and Purposes of Financial Records




Income Tax




keys to successful record keeping3
Keys to Successful Record Keeping
  • Meet your Needs, Abilities, & Limitations
cash and accrual accounting
Cash and Accrual Accounting
  • Refers to the timing of entries into the accounting system
cash based records
Cash Based Records
  • Transactions are recorded when cash is received or paid out
accrual based records
Accrual Based Records
  • Transactions are recorded when they take place
  • Regardless of whether cash is involved
accrual adjusted statements
Accrual Adjusted Statements
  • Cash based records are kept throughout the year
  • Non-Cash adjustments are made to the cash based income statement at the end of the year
accrual adjusted income statement
Accrual Adjusted Income Statement
  • Cash incomes and expenses must be adjusted by:
    • Changes in non-cash assets
      • Inventories
      • Pre paid expenses
      • Receivables
    • Changes in non-cash liabilities
      • Payables
      • Accrued interest
basic financial statements
Basic Financial Statements
  • Balance Sheet
  • Income Statement
  • Statement of Owner Equity
  • Statement of Cash Flows
assets liabilities equity
Assets = Liabilities + Equity

Equity = Assets - Liabilities


Beginning Balance Sheet

Ending Balance Sheet







  • +/- Net Income
  • +/- Valuation Changes
  • Capital withdrawals
  • + Capital contributions
financial analysis1
Basic Set of Financial Statements

Understanding of how to Analyze and Interpret the Financial Statements

Financial Analysis


ratio analysis
Ratio Analysis
  • Liquidity
  • Solvency
  • Profitability
  • Financial Efficiency
  • Repayment Capacity
financial analysis2

Measure Financial Condition

Financial Analysis
financial analysis3

Measure Financial Condition

Measure Financial Performance

Financial Analysis
financial analysis4
Financial Analysis
  • All business owners should have a basic set of financial statements at their disposal and they should know how to analyze and interpret them.
profitable management of the extensive enterprise
Profitable Management of the “Extensive” Enterprise
  • Forage-based cow/calf production has long represented a management paradox. Very high investment requirements per dollar of output provides a strong incentive to increase output per head (thereby reducing investment per dollar of output). Unfortunately, this ever-so-tempting objective has been regularly frustrated by the low economic responsiveness to performance enhancing technology. In short, it simple has not paid to manage beef cows or perennial grass with the same “intensity” as we do with more intensive enterprises like dairy cows, hogs, and row crops.
profitable management of the extensive enterprise1
Profitable Management of the “Extensive” Enterprise
  • In extensive enterprises (such as the commercial cow/calf business), we seldom find it profitable to maximize yield per acre or performance per animal. Rather than “pouring on the technology”, we must recognize the nature of the brute, live harmoniously with nature, and make a very discriminating use of yield or performance-enhancing technology. In brief---we generally have to finesse a profit.
profitable management of the extensive enterprise2
Profitable Management of the “Extensive” Enterprise
  • Output maximization may approximate optimal management for intensive enterprises. However, optimal management of the extensive enterprise comes closer to input minimization.

V.E. Jacobs, 1984

a paradox
A Paradox
  • Farmers believe they benefit from agricultural technology…but they don’t
  • Consumers don’t believe they benefit…but they do
technology is
Technology is….
  • Productivity enhancing
  • Management intensive
  • Capital intensive
  • Not scale neutral