ENGLISH


088 FARM FINANCIAL ANALYSIS F: REVENUE
 S: ANALYSIS FINANCIERO DE LA FINCA

This is carried out to show the financial performance of the FARM
during a specified accounting period (usually a year). It may be
done in terms of actual performance during some past period or on
a planning basis in terms of expected performance in the future.
The broad procedure by which revenues and costs are categorized is
shown in the following diagram where the OPPORTUNITY COSTS OF THE
FARM are made up of the opportunity cost of the farm's INVESTMENT
CAPITAL and of its family labour (including management).

 a-----------------a
 I non-farm 1
 I net income
------------------------------------ ---------
 GROSS I TOTAL I NET I NET FAMILY I
 FARM i GROSS I FARM I FARM
 INCOME : MARTIN I INCOME I EARNINGS II
 o ----------
 : IOPPORTUN- 1 I EARNINOSI
 I ITY COST
 SI of farm I
 i I family
 SI I labour, I I
 I INVESTMENT 1
 S1I CAPITAL I
 SI I and II
 : I MANAGEMENT
 S----------------I --------
 SI FIXED I
 SI COSTS I
 !I and I
 I indirectly
 i Ivariable!
 { I costs
 S------- ---- (
 I DIRECT I
 IVARIABLFI
 S COSTS I
 I- I----------a


 Note that if comparisons of farm performance in terms of
 profitability are to be made between farms, the appropriate
 measure is NET FARM INCOME plus interest on borrowed capital.
 Comparisons will not then be confounded by differences between
 farms in their level of indebtedness.


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