FMB B Test

This financial statement lists cash receipts and expenses of a farm during a specified time period.

• Balance sheet

• Income statement

• Statement of owner equity

• Statement of cash flow

Which of the following farm business analysis measures is NOT a measure of efficiency (either physical or economic)?

• Gross revenue generated per person (FTE)

• Pounds of milk produced per cow per year

• Value of crops produced per acre

• Dollars received per ton of hay sold

Which of the following is a measure of economic efficiency?

• Net farm income

• Gross revenue per year of labor

• Change in owner equity

• Net cash flow

Which of the following does NOT analyze the solvency of the farm business?

• Debt/ asset ratio

• Turnover ratio

• Debt/equity ratio

• Equity/asset ratio

When the value of livestock production per $100 feed fed is greater than 100 it means that __________ .

• The livestock enterprise had a positive profit

• The livestock enterprise had a negative profit

• Feed costs were less than gross revenue adjusted for inventory changes, home consumption and livestock purchases

• $100 per hunderweight was the breakeven sale price

An advantage of using the value of working capital instead of a cash flow budget is to analyze a farm’s liquidity would be that __________ .

• It is simpler to calculate

• It takes into account the timing of the cash flows

• It takes into account revenue to be received from the sale of products not yet in existence

• It takes into account future operating expenses as well as debt repayment

The degree to which a farm’s assets adequately secure its debts is referred to as __________ .

• Liquidity

• Solvency

• Efficiency

• Profitability

The current ratio is a measure of a farm firm's __.

• Return on equity

• Ability to pay short-term credit obligations

• Return on investment in current assets

• Level of total debt to total assets at a present time

Which type of financial statements would be most useful for keeping record of expenses?

• Net worth statement

• Net income statement

• Statement of owner equity

• Statement of cash flows

Which of the following is NOT included as an expense on the net farm income statement?

• Depreciation

• Interest payments made on loans

• Principal payments made on loans

• The cost of supplies used but not yet paid for