Farm Management Exam 2 Questions with Correct Answers| Latest Update
Guaranteed Success
The current ratio is a measure of a farm firm's Ability to pay short-term credit obligations
Two similar farms could have the same return to management but different net farm income
due to Differences in amount of unpaid labor and equity capital used
In general terms, efficiency refers to: The volume of production generated per unit of
resource utilized in the farm business
A trend analysis for a farm business could be performed using what kind of data for
comparison? Historical data from the same farm for the past five years
The degree to which a farm's assets adequately secure its debts is referred to as: Solvency
An advantage to using the value of working capital instead of a cash flow budget to analyze a
farm's liquidity: It is simpler to calculate
When the value of livestock production per $100 feed fed is greater than 100 it means that:
Feed costs were less than gross revenue adjusted for inventory changes, home consumption
and livestock purchses
Which of the following ratios does not analyze the solvency of the farm business? Turnover
ratio
Which of the following is a measure of economic efficiency? Gross revenue per year of labor
Low profitability can be caused by: All of the above can cause low profitability
, The debt/asset ratio and the debt/equity ratio both measure the overall solvency of the farm
business. True
Cash grain farms can usually operate safely with a lower current ratio than dairy farms. False
Increasing livestock production by building up inventories of raised breeding stock and feed can
cause temporary liquidity problems. True
Most of the information needed for analyzing profitability comes from the balance sheet.
False
The return on assets (ROA) is a good measure of the marginal return that can be expected from
investing more capital in the business. False
In general terms, "efficiency" determines whether farms and ranches with the most resources
also generate the most production. True
Physical efficiency measures do not take into account the prices paid to acquire resources.
True
If a farm has zero liabilities, the ROA and ROE will be the same True
Which of the following may be included on a partial budget? All of the Above
The values shown on a partial budget are Only changes in revenues and expenses
Which of the following are the profit increasing changes on a partial budget? Reduced costs
and additional revenue
Guaranteed Success
The current ratio is a measure of a farm firm's Ability to pay short-term credit obligations
Two similar farms could have the same return to management but different net farm income
due to Differences in amount of unpaid labor and equity capital used
In general terms, efficiency refers to: The volume of production generated per unit of
resource utilized in the farm business
A trend analysis for a farm business could be performed using what kind of data for
comparison? Historical data from the same farm for the past five years
The degree to which a farm's assets adequately secure its debts is referred to as: Solvency
An advantage to using the value of working capital instead of a cash flow budget to analyze a
farm's liquidity: It is simpler to calculate
When the value of livestock production per $100 feed fed is greater than 100 it means that:
Feed costs were less than gross revenue adjusted for inventory changes, home consumption
and livestock purchses
Which of the following ratios does not analyze the solvency of the farm business? Turnover
ratio
Which of the following is a measure of economic efficiency? Gross revenue per year of labor
Low profitability can be caused by: All of the above can cause low profitability
, The debt/asset ratio and the debt/equity ratio both measure the overall solvency of the farm
business. True
Cash grain farms can usually operate safely with a lower current ratio than dairy farms. False
Increasing livestock production by building up inventories of raised breeding stock and feed can
cause temporary liquidity problems. True
Most of the information needed for analyzing profitability comes from the balance sheet.
False
The return on assets (ROA) is a good measure of the marginal return that can be expected from
investing more capital in the business. False
In general terms, "efficiency" determines whether farms and ranches with the most resources
also generate the most production. True
Physical efficiency measures do not take into account the prices paid to acquire resources.
True
If a farm has zero liabilities, the ROA and ROE will be the same True
Which of the following may be included on a partial budget? All of the Above
The values shown on a partial budget are Only changes in revenues and expenses
Which of the following are the profit increasing changes on a partial budget? Reduced costs
and additional revenue
