The lifeblood of any successful business is maintaining, analyzing, and monitoring accurate data. Agribusiness is no exception. Your farm business financial statements are the foundation of this vital process. We put together a preliminary list to familiarize you with these core statements to give you a general idea of what they are and how they play a role in your business.

Essential Farm Business Financial Statements

Here’s a look at the essential financial statements you should get familiar with. Understanding these are critical, because optimizing them with the help of professionals can help you to get the most profit from your farm business.

1. Balance Sheets

Balance sheets provide a snapshot of your farm’s financial position at a given time and create an annual look at your agribusiness’ overall health. A good balance sheet clarifies your business’ assets, liabilities, and net worth. Assets represent what your farm owns, such as cash and physical property. Liabilities are the opposite of assets; they are debts owed to creditors. Equity is the difference between the two, representing the business’s net worth and ownership stake. Balance sheets should be done once at the end of the fiscal year.

2. Net Income Statement

As the name implies, this financial statement calculates your farm’s net income. It’s a straightforward formula using income minus expenses to get your net income during a given period, usually one year. It provides insight into your farm’s profitability and is an essential tool for assessing its financial health, which can provide valuable information for measuring performance.

3. Cash Flow Statement

The cash flow statement provides critical information from the balance sheet and the income statement. It tracks the movement of cash within your farm over a period of time, analyzing the changes to the other statements to get an accurate reading of how your cash was used. This information can help determine whether your business is creating and managing its finances effectively.

Working with Professionals Who Specialize in Farm Business Financial Statements

Modern farmers juggle a vast array of responsibilities. Finding out that some days may include the title “Data Analyst” or “Accountant” can be daunting. According to a USDA study, most U.S. farms need in-house accountants to solve this dilemma. However, professional accountants are not one-size-fits-all. Understanding the unique dynamics of agribusiness takes experience and a tight focus on the industry. The right firm will not only help your farm grow but make it thrive.

Here are a few reasons to consider Genske, Mulder & Company, LLP for your farm business needs:

• – A Leading Accounting Firm in the nation for dairy and agribusiness and one of the top 200 national accounting firms overall.
• – Delivering actionable clarity to our clients, not just spreadsheets.
• – Industry experts with over forty years of experience who understand your unique situation.

Find an expert accounting partner to help manage your financial statements. Get started today.