Ag Decision Maker Activity
Financial Terms
File C3-05
Name ________________________
Assets
Balance sheet
Cash flow budget
Co-signer
Current assets
Current ratio
Debt-to-asset ratio
Equity
Income statement
Insolvent
Intermediate assets
Liabilities
Liquidity
Long-term assets
Net farm income
Net worth
Repayment capacity
Solvency
Solvent
Trend analysis
Working capital
Using the terms above, answer the following statements.
________________1. A summary of all cash income and expenditures for a given
period of time, normally one year.
________________2. Permanent assets with useful lives in excess of 10 years.
________________3. When assets are greater than liabilities.
________________4. The ability of a business to generate cash to meet its
financial obligations as they become due.
________________5. Assets that will be used or converted into cash within one
year.
________________6. The profit or loss from the year's operation.
________________7. An individual in addition to the borrower who signs a note
and thus assumes responsibility and liability for repayment.
________________8. The amount of the owner's capital invested in a business.
________________9. A measure of the relative size of a business's assets and
liabilities.
Ag Decision Maker Activity Continued...
Financial Terms
File C3-05
_______________10. The items and property owned or controlled by an individual
or business that have commercial or exchange value.
_______________11. The ability of a business to repay borrowed money.
_______________12. A listing of all assets and liabilities at a given point in time.
_______________13. Financial obligations of a business.
_______________14. Assets with useful lives of one to ten years. Their sale will
affect the future income potential of the business.
_______________15. The use of financial measures or ratios over several time
periods to evaluate business performance.
_______________16. The financial claim by owners on the total assets of a
business, calculated as total assets minus total liabilities
_______________17. A summary of income and expenses over a given time
period.
_______________18. When liabilities are greater than assets.
_______________19. The amount of capital or current assets available for use in
operating the business.
_______________20. A liquidity ratio calculated as current assets divided by
current liabilities.
_______________21. A solvency ratio calculated as total liabilities divided by total
assets.
. . . and justice for all
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national
origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all
programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA,
Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-7205964.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of
Agriculture. Cathann A. Kress, director, Cooperative Extension Service, Iowa State University of Science and Technology, Ames, Iowa.