ABSTRACT
Production activities of the farm business generate most of the cash farm income. Farm management concerns the making of farm business decisions that tend to maximize net farm income, consistent with the operator’s or family’s objectives. Net farm income is derived by adjusting net cash farm income for total depreciation, net inventory changes, and value of fish products consumed in the home. In organizing the farm, the total farm budget was considered, which required a lot of time and hard work. The farmer or farm manager should be interested in knowing the financial condition of the business at any point in time. The balance sheet, or net worth statement, will at any point in time give some indication as to the financial state of the business. The net capital ratio is a measure of the overall financial strength and solvency of the farm. Financial ratios are used to analyze the balance sheet.
