(23 points) Use the following information to compute values for each of the profitability measures listed below. Evaluate each of the measures: weak, fair, strong (or if $ value how you would rate it).

U.R. Rancher Income Statement December 31, 2020
Revenue:
Cash crop sales	$56,000
Case livestock sales	$70,500
Inventory changes:
Crops	-$200
Market livestock	$6,000
Misc. supplies	$900
Livestock product sales	$0
Government program payments	$0
Gains/Loss from sale of culled breeding stock	$1,200
Custom work	$1,700
Other farm incomes	$1,500
Gross revenue		$137,600
Expenses:
Purchased feed and grain	$5,800
Purchased market livestock	$22,500
Other cash operating expenses:
Fertilizer and chemical expenses	$5,400
Seed purchased	$1,900
Vet and health expenses	$1,100
Fuel, oil	$2,800
Labor	$12,400
Repairs, maintenance	$2,800
Property taxes	$2,100
Insurance	$1,300
Misc. expenses	$1,400
Depreciation	$7,500
Total operating expenses		$67,000
Net farm income from operations		??????
Other Revenues and Expenses:
Cash interest paid	$20,900
Change in interest payable	$0
Total interest expense		$20,900
Gain/loss on the sale of capital assets
Machinery	$2,600
Land	$0
Total gain/loss on sale of capital assets		$2,600
Net farm income		??????

Other Key Information Needed
Beginning net worth (from balance sheet)	$320,000
Ending net worth (from balance sheet)	$350,000
Total beginning assets (from balance sheet)	$510,000
Total ending assets (from balance sheet)	$530,000
Value of unpaid management (estimate)	$4,000
Value of unpaid labor (estimate)	$12,000

	Value (2 points each)	Evaluate (W, F, S, etc.) (1 point each)
Net Farm Income Operations
Net Farm Income
Net Farm Income Ratio
Rate of Return on Assets
Rate of Return on Equity
Operating Profit Margin Ratio
Asset Turnover Rate

8. Verify the earns times turns relationship (2 points)

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