Guidelines to help provide a more complete financial picture of your farm or ranch.
The following 16 financial ratios are designed to provide critical financial information that can assist your decision-making process.
Greater than 2.0.
Less than 40% and does not exceed 50%.
Greater than 60%.
Less than 66%.
Greater than 6%.
Greater than Rate of Return on Farm Assets (ROA).
Greater than 30%.
Greater than 1.5.
At least 25% more dollars than scheduled payments on debt and leases.
Varies by industry. The higher the ratio the more
productive you are at utilizing your assets.
Less than 65%.
Less than 15%.
Less than 10%.
Greater than 15%.
References: Farm Financial Ratios and Guidelines. Farm Financial Standards Council.
Understanding Key Financial Ratios and Benchmarks. Dr. David Kohl and Troy Wilson.