Ag Decision Maker Activity
Financial Performance
File C3-55
Name ________________________
Answer the following questions using the information found in File C3-55.
1. Benchmarking allows owners, managers, and lenders to do what?
a. Identify strengths and weaknesses of the farming operation.
b. Focus attention on areas that need improvement.
c. Provide direction and objective measures to determine how well current
management practices are doing.
d. All of the above.
2. Liquidity refers to:
a. Difference between income and expenses
b. Degree to which debt obligations coming due in the next 12 months can
be paid from cash or assets that will be turned into cash
c. Degree to which all debts are secured
d. None of the above.
3. Solvency refers to:
a. Difference between income and expenses
b. Degree to which debt obligations coming due in the next 12 months can
be paid from cash or assets that will be turned into cash
c. Degree to which all debts are secured
d. None of the above.
4. Profitability refers to:
a. Difference between income and expenses
b. Degree to which debt obligations coming due in the next 12 months can
be paid from cash or assets that will be turned into cash
c. Degree to which all debts are secured
d. None of the above.
5. Net farm income from operations is the difference between gross revenue and
total farm expenses, including interest and depreciation.
a. True
b. False
Ag Decision Maker Activity Continued…
Financial Performance
File C3-55
6. Total liabilities should not exceed:
a. Total assets
b. Yearly gross income
c. Current assets
d. All of the above
7. Operating profit margin measures the efficient use of investment capital.
a. True
b. False
. . . 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 202-720-5964.
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.