Managing For Today and Tomorrow

Business Planning Block 1

Title: The Balance Sheet

Optimal Setting: Computer lab availability for Excel spreadsheet exercises.

Approximately 100 minutes

Note that the instructions below can provide guidance in allocating time across the two 50

minute blocks in case the blocks are not on the same evening. The optimum setting for the

second 50 minute block is a computer lab with internet access. Please visit the site to verify the

internet access and ability to use the Excel based spreadsheet (IBSNW). Download it from

(http://www.anniesproject.org/instructors-facilitators-login/mtt-resources/) under Session 1.

Enter data to verify.

If no computer lab is available, hand-held calculators and work sheets can be used. You

will need additional staff to assist participants with balance sheet data entry and analysis. An

alternative is to have a discussion leader and data entry person to demonstrate where the data

goes constructing the balance sheet in front of the participants.

First 50-Minute Block

Teaching Objectives:

Participants will

1. Understand their current farm or ranch business and personal financial positions by being

able to identify a balance sheet and interpret three selected ratios for interpretation:

working capital, debt to asset ratio, and net worth.

2. Have a hand in planning the future of their farm or ranch business by understanding the

importance of vision, mission, and goals.

a. Know how to write goals.

b. Know where to find and use business planning resources.

Teaching Materials:

Business Planning Part 1.pptx

Business Planning Part 1 PPT slides ...........................................................pages 99 - 108

Getting Ready to Complete a Balance Sheet – handout ............................ pages 109 - 110

Financial Vocabulary – activity .................................................................. pages 111 - 112

Income Statement Items – handout ............................................................ pages 113 - 114

Sample balance sheets version of Integrated Balance Sheet pages ........... pages 115 - 124

Balance Sheet Exercise .............................................................................. pages 125 - 126

Summary of Key Ratio Calculations & Benchmarks

– Ag Decision Maker C3-55 .......................................................................................... pages 127 - 128

Farm Financial Scorecard ..................................................................................... page 129

Teaching Outline

1. Introduce the topic by starting with first objective. Open with discussion question: “Why do

you need to be smart about finances when we are discussing retirement and transition

issues?” Women can be grouped to encourage dialogue among women for five minutes, or

if class is 10 or fewer discuss as a class. Groups of four best allow for all women to

participate in discussions.

2. Review objectives of this session.

3. Basics of Balance Sheet, Cash Flow, and Income Statement – PowerPoint

4. Use handouts to support points in PowerPoint - After you have gone through PPTs

have participants:

a. Start on page 109 and discuss how to get ready to complete a balance sheet.

b. Review the financial vocabulary on page 111.

c. Start on the balance sheet exercise on page 125 and have them answer the questions.

d. Briefly discuss the Farm Ratios on page 127 and 128

e. Have them fill in the Score Card on page 129

5. Encourage participants to share stories of how they have been involved (or not involved)

with the financial paperwork in the farm or ranch business.

6. If Block 2 doesn’t immediately follow, ask participants to compare their balance sheets at

home to the IBSNW. Encourage them to determine whether their income statement is

providing them with an accurate measure of net farm income from operations.

7. Flip back to the PPT slides on page 108 and review the homework assignments. Focus on

filling out a five-year trend looking at current ration, working capital and net worth.

8. Summarize or transition into second Block class is 10 or fewer discuss as a class. Groups of

four best allow for all women to participate in discussions.

9. Review objectives of this session.

10. Basics of Balance Sheet, Cash Flow, and Income Statement – PowerPoint

11. Use handouts to support points in PowerPoint - After you have gone through PPTs

have participants:

a. Start on page 109 and discuss how to get ready to complete a balance sheet.

b. Review the financial vocabulary on page 111.

c. Start on the balance sheet exercise on page 125 and have them answer the questions.

d. Briefly discuss the Farm Ratios on page 127 and 128

e. Have them fill in the Score Card on page 129

12. Encourage participants to share stories of how they have been involved (or not involved)

with the financial paperwork in the farm or ranch business.

13. If Block 2 doesn’t immediately follow, ask participants to compare their balance sheets at

home to the IBSNW. Encourage them to determine whether their income statement is

providing them with an accurate measure of net farm income from operations.

14. Flip back to the PPTs on page 108 and review the homework assignments. Focus on filling

out a five-year trend looking at current ration, working capital and net worth.

15. Summarize or transition into second Block.