A recent upgrade to the popular FINBIN website allows producers to benchmark their farm or ranch finances against a peer group of truly comparable farms, improving producer access to farm financial databases.
ST. PAUL, Minn. (9/25/2013) — A recent upgrade to the popular FINBIN website allows producers to benchmark their farm or ranch finances against a peer group of truly comparable farms, improving producer access to farm financial databases.
FINBIN is the farm financial benchmarking database maintained by the Center for Farm Financial Management (CFFM), which is part of University of Minnesota Extension and the College of Food, Agricultural and Natural Resource Sciences. It includes financial data from 3,700 farms in 10 states. Anyone with access to the web and their financial information can benchmark his or her operation against a peer group of farms from FINBIN.
"FINBIN has always allowed producers to create reports based on type of farm, size of farm, debt level, and several other criteria," said Dale Nordquist, CFFM associate director and Extension economist. "This new feature will allow producers to enter key financial measures then select a peer group of farms and quickly see how they stack up."
The comparable measures are based on the Farm Financial Standards Council's (FFSC) Financial Guidelines for Agricultural Producers. If the producer's accounting system calculates the FFSC measures, these can simply be entered on the web page. If not, they can enter a few summary financial totals and let the website calculate the ratios and measures. Tips are included to help producers enter the right information.
What will producers get? The report will show where they compare in terms of the five key areas of financial management: liquidity, solvency, profitability, repayment capacity, and financial efficiency. "It is not unusual to find a farm that is strong in terms of profitability but has a major weakness in liquidity," said Nordquist. "That's important for the farm manager to know. Should we see a financial downturn, liquidity is what will get you through the tough years."
The database is compiled from farms that use CFFM's FINPACK software for farm business analysis. Each individual farm analysis goes through several layers of checks to verify accuracy. All reports are based on accrual farm income. The website will help calculate accrual measures for producers who do not have that information.
To try it, visit www.finbin.umn.edu and click on 'Compare Your Farm FINANCIAL RATIOS' (on left). To learn more about managing farm finances, visit Interpreting Financial Statements and Measures, CFFM's online financial workshop, at http://ifsam.cffm.umn.edu. To join a farm business management program, click the About FINBIN button on the website for a list of participating groups.
The revisions to FINBIN were funded by the U.S. Department of Agriculture, National Institute of Food and Agriculture.
Source: Dale Nordquist, University of Minnesota Extension economist.
Media Contact: Catherine Dehdashti, U of M Extension, (612) 625-0237, firstname.lastname@example.org