Name_________________________ Section____________ ID _______________________AGRICULTURAL ECONOMICS 330Fall 2005Exam 11. List 3 uses for each of the following financial statement: (6 points)a. Balance Sheetb. Income Statement2. How can the cash flow budget be used for the following? (6 points)a. As a financial control toolb. For analyzing the impact of riskc. As an investment analysis tool3. The discussion of financial statement analysis was built around 5financial criteria that are used to evaluate a business’s financial positionand performance. List them. You don’t need to define. (10 points)4. Define the following terms. (16 points)a. Pro Formab. Current Liabilitiesc. Book Valued. Owner-equity (net worth)e. Liabilityf. Accrued Interestg. Asseth. Statement of Owner Equity5. What is the reason for having a balance sheet that shows both cost andmarket values. (5 points)6. Fifteen different financial measures are listed below. Indicate for eachwhether it is a liquidity (L), solvency (S), profitability (P), repaymentcapacity (RC), or financial efficiency (FE) measure. (15 points)_______ 1. Budgeting error_______ 2. Current ratio_______ 3. Working capital_______ 4. Debt/income ratio_______ 5. Asset turnover ratio_______ 6. Interest expense ratio_______ 7. Rate of return on equity_______ 8. Capital replacement and term debt repayment margin_______ 9. Cash flow coverage ratio_______ 10. Debt/equity ratio_______ 11. Operating expense ratio_______ 12. Debt/asset ratio_______ 13. Operating profit margin ratio_______ 14. Term debt and capital lease coverage ratio_______ 15. Rate of return on assets7. In financial analysis and problem solving in general, multipleperspectives or frames of reference tend to produce better and moreappropriate conclusions. Provide me with 3 different perspectives orways of looking at a firm’s financial measures that can be used toimprove the quality of the analysis. (6 points)8. A business can be generating a positive cash flow and be unprofitable. Give me 3 examples of how/why the statement is true. (6 points)9. What creates the deferred taxes liability on current assets (5 points)10. If a business is using borrowed money profitably, will its rate of returnon equity (ROE) be higher or lower than its rate of return on assets (ROA)and why? (5 points)11. Calculate the cash basis net farm income and the accrual adjusted netfarm income for 2005 for Rob Johnson’s Farms, a proprietorship. ( 20points)1. Cash sales of stocker calves $250,0002. Cash sales of cotton 400,0003. Cash received for custom combining 25,0004. Cash rent paid 75,0005. Cash purchases of seed, chemicals, fertilizer, fuel 380,0006. Principal payments on farm mortgage 50,0007. Interest paid on all loans 100,0008. Wages paid to hired labor 30,0009. Sale of used tractor with a book value of $15,000 20,00010. Purchase of new planter on 2/1/05 80,00011. Government payments received 40,00012. Cotton inventory 12/31/04 260,00013. Cotton inventory 12/31/05 300,00014. Accounts receivable 12/31/04 30,00015. Accounts payable 12/31/04 45,00016. Increase in supplies inventory from the beginningto the end of the year 40,00017. Purchase of stocker calves 200,00018. Cash sales of corn silage 100,00019. Cash sales of wheat 125,00020. Depreciation expense 60,00021. Family living withdrawals 48,00022. Increase in value of owned land 96,00023. Accounts receivable 12/31/05 024. Accounts payable 12/31/05 60,00025. Accrued interest payable 12/31/04 25,00026. Accrued interest payable 12/31/05