AGEC 6000 PRINCIPLES OF AGRIBUSINESS MANAGEMENT

Fall 2001 – Lecture T,TH 12:30-1:45

Dr. Greg Traxler, Comer 304 Phone - 844-5619; gtraxler@acesag.auburn.edu

http://www.ag.auburn.edu/dept/aec/courses/agec0500/agec0500t.html

Office Hours: M-F 11:00-11:30 and by appointment

Secretary: Ms. J. Turney, Comer 308

Graduate Teaching Assistant: Ms. Kenrett Jefferson, Comer 309, 844-5626

Course description: Principles of economics applied to agriculture, uses of farm records to improve management of the farm; developing enterprise budgets and use in preparing a profit-maximizing farm plan. The class focuses on the application of economic principles to farm management problems and on the use of financial information for business decision making.

Course objectives: By the end of the quarter you should:

1. Understand the application of economic theory to management of the farm business.

2. Be able to identify, collect and organize relevant financial information for a farm firm and use this information to perform financial analysis.

3. Understand the use of the following standard farm management tools:

a) Income statement

b) Balance sheet

c) Cash flow statement

d) Enterprise budgets

e) Partial Budgeting

f) Projected income statement

g) Ratio analysis

4. Be able to set up a functional business recordkeeping system using Quicken software

Exam Dates

There will be two or three one-hour examinations.

Comprehensive Final Exam: 5:00 p.m. - 7:30 p.m. Thursday, December 13, 2001

Office Hours: My office hours are 2:00 - 4:00 T, TH. If these hours are inconvenient for you, please make an appointment so that we can meet at a time that is convenient for you. I will use some class time to answer project questions. Please do not come to my office before class (11:30-12:30), because I use that time to prepare for class. You are encouraged to get all the extra help you need in order to do well on the exams and assignments. I have a busy schedule this quarter, so please call ahead to make an appointment.

Students with special difficulties (such as language, hearing or other learning disabilities) should see me the first week of class to discuss accommodations.

General Course Outline

Text: Farm Management. Fourth Edition. By Ronald D. Kay and William M. Edwards

Course lecture notes are available (in MS WORD97 format) at: http://www.ag.auburn.edu/dept/aec/courses/agec0500/agec0500t.html

I. Introduction: Meaning and Purpose of Farm Management

Text: Chapters 1-2

II. Accounting Information and Financial Analysis

Depreciation, Inventories, Balance Sheet, Income Statement

Text: Chapters 3-6

First Mid-term Exam

III. Capital and Use of Credit

Chapter 19

IV. Managing Income Taxes (1/2 week)

Text: Chapter 16

Budgets, Whole Farm Planning and Cash Flow Planning

Partial budgets, enterprise budgets, whole-farm planning and budgeting Text: Chapters 10-13, skip Chpt 12

V. Investment analysis, forms of business organization, land control and use

Text: Chapters 14, 17, 20

Second Mid-term Exam

VI. Economic Principles:

Production functions, profit maximization, equi-marginal principle, cost concepts

Text: Chapters 7-9

Final Exam

Grading Policy

Mid-term exams 60%

Homework 10%

Final Exam 30%

 

Grading scale: 91 - 100 A

81 - 90 B

71 – 80 C

65 – 70 D

Below 65 F

Unannounced quizzes may be given. You will need a dean's note to allowed to make up a test or assignment. Students who have missed an exam for an excused reason will be given a make-up exam during the last week of class. Students missing an exam without a valid excuse will be assigned a zero for that exam. The final exam will be comprehensive. It will be similar in format to the mid-term exams.

AGEC 6000 PRINCIPLES OF AGRIBUSINESS MANAGEMENT Fall 2001

SCHEDULE OF LAB ASSIGNMENTS

Lab date

Activity

Homework item due

Homework due date

Sept 4

Billy Beefraiser Farm

  • Create cash and asset/liability account
  • Create Balance sheet report

a) Balance sheet

b) Answer questions on assignment

Sept 11

September 11

Farm Project

  • Create asset/liability accounts
  • Chart of accounts
  1. Balance sheet as of 12/31/96

Sept 18

September 18
  • Expense/income transactions
  1. Balance sheet as of 12/31/97

Oct 2

October 2
  • Generating enterprise cash flow and farm income statement (Profit and loss)
  1. Income statement
  2. Profit and loss

October 9

October 9
  • Generate income statement by class
  1. Incomes statement by class

October 18

October 30
  • Generate monthly cash flow
  1. Monthly cash flow
  2. Cash flow and income statement analysis (ratios)

November 6

For the lab due on October 2 note that you have to have all the transactions entered to the balance sheets requested on the due date.

These will be graded assignments. The grades on these, plus any additional homework assignments, will constitute your homework grade.