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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 keeping2

Excessive detail often ends in Confusion, Frustration, and Failure

Keys to Successful Record Keeping

Keys to successful record keeping3
Keys to Successful Record Keeping Failure

  • Meet your Needs, Abilities, & Limitations

Keys to successful record keeping4

Know your Purpose for Keeping Records Failure

Keys to Successful Record Keeping





Accounting rules

Standards of Communication Failure

Accounting Rules

Accounting rules1

Generally Accepted Accounting Principles Failure


Accounting Rules

Keys to successful record keeping5

Accurately Match Expenses with Income Failure

Keys to Successful Record Keeping

Cash and accrual accounting
Cash and Accrual Accounting Failure

  • Refers to the timing of entries into the accounting system

Cash based records
Cash Based Records Failure

  • Transactions are recorded when cash is received or paid out

Accrual based records
Accrual Based Records Failure

  • Transactions are recorded when they take place

  • Regardless of whether cash is involved

Accrual adjusted statements
Accrual Adjusted Statements Failure

  • 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 Failure

  • 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

Financial analysis

Basic Set of Financial Statements Failure

Financial Analysis


Basic financial statements
Basic Financial Statements Failure

  • Balance Sheet

  • Income Statement

  • Statement of Owner Equity

  • Statement of Cash Flows

Assets liabilities equity
Assets = Liabilities + Equity Failure

Equity = Assets - Liabilities

Management information systems

Beginning Balance Sheet Failure

Ending Balance Sheet







  • +/- Net Income

  • +/- Valuation Changes

  • Capital withdrawals

  • + Capital contributions

Financial analysis1

Basic Set of Financial Statements Failure

Understanding of how to Analyze and Interpret the Financial Statements

Financial Analysis


Ratio analysis
Ratio Analysis Failure

  • Liquidity

  • Solvency

  • Profitability

  • Financial Efficiency

  • Repayment Capacity

Financial analysis2

Objectives Failure

Measure Financial Condition

Financial Analysis

Financial analysis3

Objectives Failure

Measure Financial Condition

Measure Financial Performance

Financial Analysis

Financial analysis4
Financial Analysis Failure

  • 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 Failure

  • 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 Failure

  • 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 Failure

  • 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 Failure

  • Farmers believe they benefit from agricultural technology…but they don’t

  • Consumers don’t believe they benefit…but they do

Technology is
Technology is…. Failure

  • Productivity enhancing

  • Management intensive

  • Capital intensive

  • Not scale neutral

The end
The End Failure