In: Accounting
Crops & feed revenue | 145,600 |
Livestock and livestock product revenue | 215,300 |
Total nonfarm income | 12,000 |
Total farm operating expenses | 252,629 |
Depreciation expense | 50,526 |
Income tax expense | 10,827 |
Interest expense | 64,962 |
Withdrawals for family living | 28,000 |
Principal payments on unpaid operating debts | 0 |
Principal payments on current portions of debt & leases | 29,890 |
1) Calculate capital replacement and term debt repayment capacity for LongView Farms.
2) Calculate capital replacement and term debt repayment margin (CRDRM) for LongView Farms.
3) Solve the percent that crop revenue and livestock revenue can decline and still maintain positive CRDRM.
4) Solve the percent operating expenses and interest expenses
can increase and still maintain positive CRDRM.
Calculation of Net Farm Income from Operations as -
Gross Farm Revenues - Crop and feed Revenues Livestock and Livestock Product Revenues |
$145,600 $ 215,300 |
$360,900 |
Less : - Total farm operating expenses | ($252,629) | |
EBITDA | $108,271 | |
Less : - Interest Expense | ($64,962) | |
Net Farm Revenue from Oprations | $43309 |
Calculation of Capital Debt Repayment Capacity & Margin and Replacement Margin as -
Net Farm Revenue from Oprations | 1 | $43309 |
Total Non-farm Income | 2 | $12000 |
Interest Expense on Term Debt | 3 | 0 |
Depreciation Expense | 4 | $50526 |
Family Expense | 5 | $28000 |
Income tax Expense - self | 6 | $10827 |
Capital Debt Replacement Capacity [(1+2+3+4)-(5+6)] |
7 | $67008 |
Principle payment of Debt & Leases | 8 | $29890 |
Unpaid Oprating Debts | 9 | 0 |
Capital Debt Repament Margin [7-(3+8+9)] |
10 | $38000 |
Cash Used for Capital Replacement | 11 |
0 |
Replacement Margin (10-11) |
12 | $38000 |
Term Debt & Capital Lease Coverage Ratio [7/(3+8+9) |
13 | 224.18% |
Replacement Margine Coverage Ratio [7/(3+8+9+11) |
14 | 224.18% |