2. 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.
3. Information…
• 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.
4. Systems…
• 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.
19. Accrual Adjusted
Statements
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
20. Accrual Adjusted Income
Statement
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
29. Financial Analysis
All business owners should have
a basic set of financial
statements at their disposal
and they should know how to
analyze and interpret them.
30. Profitable Management of the “Extensive”
Enterprise
• 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.
31. Profitable Management of the “Extensive”
Enterprise
• 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.
32. Profitable Management of the “Extensive”
Enterprise
• 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
33. A Paradox
• Farmers believe they benefit from
agricultural technology…but they don’t
• Consumers don’t believe they benefit…but
they do
