Farm Business Management
questions well answered
Returns to Labor & Management - correct answer ✔✔Return to Labor & Management -
Opportunity cost of management = Return to Labor
Working Capital - correct answer ✔✔Computes the dollars that would remain after selling all
current assets and paying all current liabilities.
Comparative Advantage - correct answer ✔✔Can be produced more efficiently with given
resources.
U.S. with row crops
Mexico with vegetable crops
**can be seen as a threat or opportunity.
Current Ratio - correct answer ✔✔Measures the amount of current assets relative to current
liabilities.
>1 preferred
Current Ratio= Current Assets/ Current Liability
Liability - correct answer ✔✔A debt or other finanical obligation that must be paid in the future.
Examples would include loans from a bank or other lending institution, accounts payable, and
accrued expenses.
,Net Farm Income - correct answer ✔✔Revenue - Expenses
**same as profit
Owner Equity - correct answer ✔✔The difference between business assets and business
liabilities. It represents the net value of the business to the owners of the business.
Assets - Liabilities = OE
Prepaid Expense - correct answer ✔✔A payment made for a produce or service in an
accounting period before the one in which it will be used to produce revenue.
Profit - correct answer ✔✔Revenue - Expenses.
**same as net farm income
Revenue - correct answer ✔✔The value of products and services produced by a business during
an accounting period.
Revenue may be either cash or noncash.
Mission Statement - correct answer ✔✔Short description of why a business exists.
Defines firm's purpose and objective
Buzzwords: Family, Faith, Sustainability, Trust, Honesty
, Tactical Management - correct answer ✔✔Taking short-term actions that keep business moving
*Day to Day actions
Strategic Management - correct answer ✔✔Charting the long-term course of business.
Adjustments - correct answer ✔✔Change what needs to be changed or what is not working.
This is what separates good managers from others.
Control - correct answer ✔✔"Feedback"
Monitoring and comparing results.
Implementation - correct answer ✔✔"Setting in Motion"
Acquiring resources, Coordinating, Staffing, Purchasing, and Supervising.
Planning - correct answer ✔✔"Choosing a course of Action"
1.Establishing goals
2. ID quality and quantity of resources available to meet goals.
3. ID alternatives.
What are the functions of management? - correct answer ✔✔1. Planning
2. Implementation
3. Control
4. Adjustments
Debt/Asset Ratio - correct answer ✔✔Measures what part of total assets is owed to lenders
questions well answered
Returns to Labor & Management - correct answer ✔✔Return to Labor & Management -
Opportunity cost of management = Return to Labor
Working Capital - correct answer ✔✔Computes the dollars that would remain after selling all
current assets and paying all current liabilities.
Comparative Advantage - correct answer ✔✔Can be produced more efficiently with given
resources.
U.S. with row crops
Mexico with vegetable crops
**can be seen as a threat or opportunity.
Current Ratio - correct answer ✔✔Measures the amount of current assets relative to current
liabilities.
>1 preferred
Current Ratio= Current Assets/ Current Liability
Liability - correct answer ✔✔A debt or other finanical obligation that must be paid in the future.
Examples would include loans from a bank or other lending institution, accounts payable, and
accrued expenses.
,Net Farm Income - correct answer ✔✔Revenue - Expenses
**same as profit
Owner Equity - correct answer ✔✔The difference between business assets and business
liabilities. It represents the net value of the business to the owners of the business.
Assets - Liabilities = OE
Prepaid Expense - correct answer ✔✔A payment made for a produce or service in an
accounting period before the one in which it will be used to produce revenue.
Profit - correct answer ✔✔Revenue - Expenses.
**same as net farm income
Revenue - correct answer ✔✔The value of products and services produced by a business during
an accounting period.
Revenue may be either cash or noncash.
Mission Statement - correct answer ✔✔Short description of why a business exists.
Defines firm's purpose and objective
Buzzwords: Family, Faith, Sustainability, Trust, Honesty
, Tactical Management - correct answer ✔✔Taking short-term actions that keep business moving
*Day to Day actions
Strategic Management - correct answer ✔✔Charting the long-term course of business.
Adjustments - correct answer ✔✔Change what needs to be changed or what is not working.
This is what separates good managers from others.
Control - correct answer ✔✔"Feedback"
Monitoring and comparing results.
Implementation - correct answer ✔✔"Setting in Motion"
Acquiring resources, Coordinating, Staffing, Purchasing, and Supervising.
Planning - correct answer ✔✔"Choosing a course of Action"
1.Establishing goals
2. ID quality and quantity of resources available to meet goals.
3. ID alternatives.
What are the functions of management? - correct answer ✔✔1. Planning
2. Implementation
3. Control
4. Adjustments
Debt/Asset Ratio - correct answer ✔✔Measures what part of total assets is owed to lenders
