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Fundamentals Of Financial Management

Fundamentals Of Financial Management. Original Power Point Created by Steve Richards for CCE Wyoming & Erie Counties Modified by Georgia Agriculture Education Curriculum Office June, 2002. What Is Farm Management?.

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Fundamentals Of Financial Management

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  1. Fundamentals Of Financial Management Original Power Point Created by Steve Richards for CCE Wyoming & Erie Counties Modified by Georgia Agriculture Education Curriculum Office June, 2002

  2. What Is Farm Management? The ability to use resources in an efficient manner so as to maximize returns to: • Business goals • Personal goals

  3. Personal Vs. Business Goals Personal goals and business goals require the same things: • Money • Moderate to strong financial performance • Growing equity in the business every year

  4. Achieving Your Goals REQUIRES FINANCIAL MANAGEMENT!!

  5. What Is Financial Management? • The ability to allocate financial resources in the areas which generate the greatest returns.

  6. Financial Management Decisions • Pricing your product • Making changes in your business • Making business decisions • Investment decisions

  7. Pricing Your Product • One of the most critical components of marketing. A common concern! • Critical in achieving sales and profitability • Need to know your costs of production

  8. Making Business Changes • Input substitution • Capital for labor: buying a transplanter • Buying vs. Raising plugs • Enterprise changes • Whether or not to raise a particular product • Adding another operation to your business

  9. Making Business Decisions • Are your sales covering your costs • Which products generate the most income • Should you produce or shut down • Optimum mix of products • Contributions to fixed costs • Goal setting and increased efficiency

  10. Making Investment Decisions • Capital purchases • Should I expand my greenhouse? • Should I buy a new watering system? • Which is best investment for my money? • How can I maintain strong financial performance?

  11. How To Make Sound Financial Decisions? • Good record-keeping • Construct financial statements • Perform financial analysis • Participate in benchmarking

  12. Good Record Keeping • Keep records for more than just taxes! • Use a computer! • Financial information should be at your fingertips at all times

  13. Constructing Financial Statements • Income statement, balance sheet, cash flow statement • Banks require these statements • Can often be tedious to complete

  14. Perform Financial Analysis • Cost analysis • Ratio analysis • Enterprise analysis

  15. Participate in Benchmarking • How do you compare to other firms in the industry? • Set performance goals • Track your performance over time (trend analysis)

  16. How Can I Do All This? GREENHOUSE BUSINESS SUMMARY

  17. Why Participate? • Prepares Financial Statements • Performs Financial Analysis • Compiles a Financial Benchmark Database • It’s FREE!!

  18. Objectivesof GHBS: • Improve financial management skills • Help producers set future goals • Make progress towards goals

  19. What Do I Need? Record of all cash receipts & expenses Asset Inventory General Business Info.

  20. How Do I Start? • Wen-fei Uva 607-255-3688 [wl32@cornell.edu] • Steve Richards 716-786-2251 [str4@cornell.edu] • SIGN UP TODAY! SEE BACK PAGE!

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