1. Understanding Net Worth, Cash Flow, Income Statements and Computerized Record Keeping

2. Next Generation Science / Common Core Standards Addressed!
CCSS. Math .Content. HSSID.A.2 Use statistics appropriate to the shape of the data distribution to compare center (median, mean) and spread (interquartile range, standard deviation) of two or more different data sets.
CCSS. ELA Literacy. WHST.11‐12.9 Draw evidence from informational texts to support analysis, reflection, and research

3. Student Learning Objectives
Develop a net worth statement for an agricultural business.
Develop an income statement for an agricultural business.
Develop a cash flow statement for an agricultural business.
Understand computerized record keeping.
Understand the AET Tracker Record keeping system.

4. Terms Accrual accounting Assets Cash accounting Cash flow statement
Current assets
Current liabilities
Expenditures
Income statement
Liabilities
Net income
Net worth statement
Non-current assets
Non-current liabilities
Revenue

5. Interest Approach
Have students total the value of items currently in their possession.
Ask them what happens to their financial position if you owe them $20.
Are they now worth more or less?
Net worth looks at situations like this.

6. Net Worth Statement
Shows the financial health of a business at a given point in time.

7. Assets
Items that are owned by the business and have value.

8. Assets
Current assets - items owned that will be used or turned to cash within one year.
Non-current assets - items whose useful life is greater than one year.

9. Examples of Current Assets
Cash
Checking Account
Savings Account
Feeder Animals
Feed
Crops growing in the field
Supplies
Prepaid Expenses
Accounts Receivable
Crops in storage

10. Non Current Assets Equipment Buildings Land Breeding Livestock
Improvements
Vehicles

11. Liabilities
Debt obligations.
Something owed to someone else.

12. Liabilities Current liabilities — debts due within one year
Non-current liabilities — debts due after one year

13. Current Liabilities Accounts payable Loans due within one year
Accrued Interest
Current portion of long term debt

14. Non-Current Liabilities
Long Term Debt (not due within one year)
Mortgage (house or land loan)

15. Components of a Net Worth Statement
Total assets = current assets + non-current assets.
Total liabilities = current liabilities + non- current liabilities.
Net worth or equity = total assets – total liabilities.

16. Non Current Liabilities
Assets
Liabilities
Current Assets
Current Liabilities
Non Current Assets
Non Current Liabilities
Total Assets
Total Liabilities
Net Worth

17. Income Statements
Income statement — a financial instrument that shows the profits or losses of a business over a period of time.

18. Cash vs. Accrual Accounting
Cash accounting — income and expenditures are recorded when they are received or paid.

19. Cash vs. Accrual Accounting
Accrual accounting — income and expenditures are recorded when the service or product is delivered or received.
Accrual accounting also shows changes in assets and liabilities (inventories).

20. Income Statement Components
Revenue - cash receipts from services performed, products sold, etc.
Expenditures - cash paid for services, inputs purchased, etc.
Net income = revenue - expenditures

21. Uses of Computerized Records
Monitor feed rations.
Plan changes in enterprises and whole business.
Record tax and accounting information.
Help in marketing of products through price analysis and market trends.

22. Uses of Computerized Records
Schedule workloads for employees.
Provide financial statements.
Track inventories.

23. The End!