(edited)Business
How do you figure land costs as a line item. We bought 160 acres 78 of which is tillable. Paid $400K and owe $388K after 3 years of rec. CRP payments. Do I seperate tillable from non? Do I figure debt amount across acres? Do I figure just interest or principle plus interest? Same on machinery. Bought a tractor last year and CPA depreciated 100% last year. Have a 1% interest only loan on it. Do I count interest only, interest plus principle and what about depreciation? Thanks in advance.
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Similar answer, though there are different philosophies depending on your enterprises. The bank will care most about overall cash flow. Money in compared to money out.
We like to know where our costs and profits are coming from so each field has a separate budget. That does mean that some years a field will have negative return depending on rotation and rent (wheat in our area).
Some people "sub...
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There's more then one way to do it but we typical do a "cash" budget. Not sure who original said it but "cash is the blood of a business" so managing cash flows is what we focus on. So all principle and interest payments due that year across the tillable acres only. We normal don't budget depreciation rather budget a fairly high repair bill per acre to offset that, some of that's just our model o...
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Thank you for the information. I read this a few weeks ago and didn't realize I could respond.