Overview of Agricultural Loan Origination Loan origination is the process by which borrowers apply for credit and lenders review, approve and extend credit to borrowers. Agricultural loan origination follows a similar process to general loan origination but is tailored specifically to meet the unique needs and challenges of farmers and ranchers. Unique aspects of the
The Farm Credit System (FCS) is a nationwide network of cooperatively owned banks and associations in the United States. The system provides credit and financial services to farmers, ranchers, agricultural cooperatives, rural homeowners, and other agribusinesses in the United States. It’s function is to provide a source of credit for American agriculture by making loans
Welcome to the world of agricultural finance! This comprehensive guide provides a simple, yet informative, overview explores the combination agriculture and how banks, lenders, insurers and financial planners facilitate a critical role in the economy by providing opportunities to leverage capital to foster and grow agricultural businesses. Agricultural finance is more than just loans and
The net farm income ratio measures how much net income a farmer earns after accounting for any and all expenses. The net farm income ratio is one of the key financial efficiency ratios used in farm financial analysis. Net Farm Income Ratio Formula Net Farm Income Ratio = (Net Farm Income ÷ Total Revenue) x 100 This article is
The interest expense ratio measures how much of a farmer’s revenue is used to cover interest expenses and ultimately, meet their debt obligation. The interest expense ratio is one of the key financial efficiency ratios used in farm financial analysis. Interest Expense Ratio Formula Interest Expense Ratio = (Interest Expense ÷ Total Revenue) x 100 This article is a
The depreciation expense ratio measures how much of a farmer’s revenue is used to cover depreciation and amortization expenses. The depreciation expense ratio is one of the key financial efficiency ratios used in farm financial analysis. Depreciation Expense Ratio Formula Depreciation Expense Ratio = Depreciation Expense ÷ Total Revenue This article is a part of our series on Farm
The operating expense ratio measureshow much of a farmer’s revenue is used to cover operating expenses. The operating expense ratio is one of the key financial efficiency ratios used in farm financial analysis. Operating Expense Ratio Formula Operating Expense Ratio = Total Operating Expenses ÷ Total Revenue This article is a part of our series on Farm Financial Performance
The replacement coverage ratio in farm financials tells the farmer’s capacity to replace assets with their income. The replacement coverage ratio is one of the key repayment capacity ratios used in farm financial analysis. Replacement Coverage Ratio Replacement Coverage Ratio = Net Farm Income ÷ Depreciation and Capital Costs This article is a part of our series on Farm
The debt coverage ratio tellsuse whether a farmer or rancher is more likely to be able to pay debtobligations due in the coming year. Read on to learn more! The debt coverage ratio is one of the key repayment capacity ratios used in farm financial analysis. Debt Coverage Ratio Formula Debt Coverage Ratio = Net Operating Income ÷ Total
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