Presentation on theme: "Management Information Systems"— Presentation transcript:
1 Management Information Systems Terry DeGroffBurwell, NebraskaBooks, Records & Controls
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.
15 Keys to Successful Record Keeping Accurately Match Expenses with Income
16 Cash and Accrual Accounting Refers to the timing of entries into the accounting system
17 Cash Based RecordsTransactions are recorded when cash is received or paid out
18 Accrual Based Records Transactions are recorded when they take place Regardless of whether cash is involved
19 Accrual Adjusted Statements Cash based records are kept throughout the yearNon-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 assetsInventoriesPre paid expensesReceivablesChanges in non-cash liabilitiesPayablesAccrued interest
21 Financial AnalysisRequiresBasic Set of Financial Statements
22 Basic Financial Statements Balance SheetIncome StatementStatement of Owner EquityStatement of Cash Flows
29 Financial AnalysisAll 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 ParadoxFarmers believe they benefit from agricultural technology…but they don’tConsumers don’t believe they benefit…but they do