Farm finance

Learn what a balance sheet is and how it can help you understand your financial situation.

• A balance sheet lists assets, liabilities and net worth as of a certain date.

• View an example balance sheet.

• Learn what terms on a balance sheet meet--such as current, intermediate and long-term assets.

An income statement measures profit or loss in a given length of time. View an example income statement and learn more about income statements including:

• Steps in creating an accrual adjusted income statement.

• What you can learn from an income statement.

The statement of owner's equity is a financial statement that analyzes why a farmer’s net worth (or owner equity) changed over the past year.

The statement of owner's equity is divided into three groups, each examining an individual portion of a farm’s financial life: earnings, things that don’t happen every year, and changes in capital assets and deferred liabilities.

The statement of cash flows examines how cash has entered and left your financial life during the year.

• Understand the difference between cash flow and net profit.

• Create your own statement of cash flows to examine different sources and uses for cash.

In the last few decades, much progress has been made to standardize financial statements in agriculture. This allows for ratios and measurements commonly used in other industries to become standard in the farmer’s financial world.

Key ratios and measurements covering liquidity, solvency, profitability, repayment capacity and efficiency have become standards in the agricultural industry and are generated from these financial statements.

• Learn about different ways to measure liquidity, solvency, profitability, repayment capacity and efficiency.

• Learn about different ratios including current ratio, debt to equity ratio and others.

Benchmarking is a process that makes it possible to research your farming business to find opportunities to improve your financial position, efficiency and profitability.

Learn more about how to interpret financial statements and measures.

View 10-year average, 2015 actual and 2018 projected data of income and expenses in crop budgets for central and northwestern Minnesota. 

Use the acceptable crop price worksheet to determine breakeven prices for your crops. 

• Download the breakeven price worksheet

What does it cost to own and operate farm machinery? Machinery costs are substantial; control of them is important. 

• View document with machine costs separated into time-related and use-related categories.
• Or, complete a form to get this information as an Excel file. 

The 2017 FINBIN report on Minnesota finances (PDF) includes information about the state of agriculture in Minnesota. 

• Profitability
• Liquidity
• Solvency
• Debt repayment capacity
• Median net farm income including for crop and livestock farms

The 2,306 Minnesota farms included in the FINBIN database represent a broad cross-section of Minnesota production agriculture. FINBIN data is provided by farms that participate in Minnesota State Farm Business Management Education programs and the Southwestern Minnesota Farm Business Management Association.