from this whole case study I need to know these information:

1.

Industry Analysis (one to two pages)

Identify the industry within which the company competes.

Describe the overall size of the industry, its state of maturity and growth pattern.

• Describe the external environment in which the company competes (nationally or internationally as applicable)

2.

Target Market Profile (one to two pages)

Define the value proposition.

• Describe size, segment, trends and customer profiles of the target market.

Describe key attributes that drive customers' buying decisions.

Describe potential product or service substitutes.

3. Competition (one to two pages)

Identify primary and secondary competitors within the target market.

Describe competitors' strengths and weaknesses compared to the company.

4. Marketing Strategy and Sales Plan (one to two pages)

Describe the marketing plan and distribution channels.

Describe the sales efforts including how to attract and retain customers.

Outline the pricing strategy and any sales incentives or promotions used.

5. Research, Development and Technology (up to one page)

Describe plans for research and development efforts.

Explain how the business will improve or develop products and what resources will be needed.

PAGE 2 ROB and FAYE SAMPLE SAMPLE FARMS LTD. equipment capacity. The existing facility is now essentially over-capacity for A CASE STUDY what was originally designed. PAGE 1 In the winter of 2015/16. Rob and Faye have some decisions to make. They had Both Rob and Faye feel the nearly 4,200 cultivated acres they farm is enough been managing quite nicely until 2012 and 2013 when they had a couple of really. "We have what we want," says Rob. "We work hard and don't seem to have a lot tough years. 2012 was especially tough with poor yields. Things improved of time away from the business even though we have some excellent help." immensely in 2014 and 2015. There was an issue though. They lost a long term, They were using a full time employee and some seasonal assistance during the hard working employee just before harvest. They were able to get through the summer and fall. It was always a struggle to find good employees or sometimes harvest but without their employee, it was tough. There were long hours and the even to find an employee at all. Years ago, when Rob and Faye believed they stress levels were high. Rob and Faye realize that they need to take some just needed help during seeding and harvest, they would try to find help at those action as they don't want to find themselves in the situation again. particular..times Often they found unqualified, unreliable and unmotivated people. Faye often said they seem transient, not really caring about anything but the paycheck. We had one guy who would miss work after he got his BACKGROUND Rob and Faye have been farming in Manitoba for 33 years. They purchased 800 acres of land in 1981 from Rob's father, paying $200,000 for it. A few years paycheck. It was stressful trying to find and keep people." They decided to find and keep a full time employee (Jim) with some seasonal assistance as a way to manage the issue of getting the help they needed, when they needed it. The later, they purchased an adjoining half section for $128,000 The first land purchase was paid off in 1990, and their second purchase was paid off in the concept came with a cost as it was a challenge to keep people busy during the year 2000. They purchased another 1,440 acres, plus some outbuildings, in 2011 for $1,400,000. A neighbor and long term landlord had wanted to sell and winter. It worked fairly well until Jim, who was a long tenure employee, abruptly left just before harvest last year. They're not entirely sure why he left. It was they really didn't think they had any option but to make the purchase. They had lucky that it was an open fall, and that John (their son) could get back to help that added a grain handling system just about 10 years ago now. The old, smaller year. granaries Rob's father had used were not really functional, given modern PAGE 3 PAGE 4 Rob and Faye farm together in a corporate structure. They each own 50% of the Recently, with family imminently set to come back to the farm, Rob and Faye common shares. The land they bought from their father and the next parcel is in have been wondering if some investing in some other business might be the best both their personal names, held outside the company. There is no rental way to go arrangement with the corporation for this land. The most recent land acquisition was purchased by the company and is held inside the corporation. They weren't Rob says that their lenders do not appear to be overly concerned but do seem to sure what was the best way to structure the purchase but after a lot of be asking for more and more information. Granted, it was worse a couple of discussion, they opted to have the company own the land. years ago but now, even after a couple of pretty good years, there is a requirement for more and more reporting and information. THE FARM BUSINESS Managing a successful farm these days is much like a juggling act with the daily In spite of the hard work and low profit from time to time, Rob and Faye feel that demands of the business and the seasonal production urgencies. It can get to be farming has given them a good life. Right now, Rob and Faye should be a bit stressful. They have been looking at the costs in their business and ways in beginning to enjoy more of the benefits associated with farming. The farm which they could reduce them. For example, the costs associated with the should be comfortably paying its way. They have accumulated just over custom work they require. It is fairly significant. It seems every year that the $1,700,000 in owner's equity or about $3,600,000 of equity (net worth) when the timing of getting the custom work done isn't what it should be and that sometimes shareholder loans are excluded and market value of the assets, including it affects quality and yield. They run one combine and one seeding unit. Both are personally held land, is factored in. maxed out in terms of capacity. Rob's equipment could stand to be upgraded somewhat as it is a bit older and the capacity would have to be greater if they They have three term loans, an operating loan and some accounts payable. The were to use less custom work. That's why they started with the custom work in operating loan has not revolved in the last two or three years. The table below the first place. The capital investment would mean more debt but would summarizes the existing term loans. eliminate a lot of the custom work. PAGE 5 PAGE 6 Original Date Original Principal and Principal due Principal Outstanding Amount Interest 2016 brighter and the renovations were long overdue. Rob has in the past tended to purchase smaller capital items through the operating line rather than setting up repayment terms. Cashflow feels tight at times but maybe it's still a hangover Annualized December 2015 from 2012 and 2013 2011 $1,400,000 $127,058 $1,244,561 $49,885 2013 $ 350,000 $ 70.000 $ 210.000 $70,000 THE MANAGEMENT (equal principal) $ 11,548 2014 $ 50,000 $ 40,962 $ 9,495 The large loan taken out in 2011 to purchase some land was definitely a risk. It was financed over 20 years with a maturity in 2031. But given the circumstances, they dido't feel that they had any option. Luckily they had their land paid for so there was enough security to complete the purchase without any down payment, though the loan did equal about 60% of the total land value. There was a loan taken early in 2013 to provide some additional operating capital; financed over 5 The management structure is similar to the vast majority of mid-sized farms. Faye does the bookkeeping and helps with the office functions, such as payroll and GST reporting. Rob's passion is farming and while he assumes responsibility for all other management functions, he'd rather be outside working. He knows that there should be some changes, but things were working fine until Jim resigned. There dido't seem to be any issues, at least none that Rob could pinpoint. Sure, there were some arguments from time to time. Jim's kids were now teenagers and maybe there was some worry about the farm's financial picture after those bad years. years. They didn't want to do this, but thought that they didn't have many options as 2012 was a terrible year, THE FAMILY They took out a loan in 2014 to complete some home renovations and to purchase a fifth wheel The last loan has a 5 year term. It represents an additional commitment to annual cashflow, but they wanted to try and get some Rob is 56 and Faye is 54 years old. They have a 29 year old son and a 27 year old daughter. Their son, John, is married to Rebecca. Rebecca grew up in Winnipeg and is an occupational therapist. There are not a lot of employment opportunities for Rebecca in her area of training. It will be even more difficult to find employment in her profession now that they have decided to return to the time away from the farm. Plus the fact that the farming picture was much PAGE 7 PAGE 8 farm. There was a lot of discussion with the family about the commitment but she and John talked it over a lot and this is what they want to do. They're not sure Rob and Faye take a fixed management salary of $60,000 plus an allowance for their daughter attending university. Every month, Rob takes money from the farm account and transfers it into a separate account for family living expenses. Faye believes they should be placing an emphasis on family savings and security, with planning and saving for retirement becoming one of their priorities but she cannot seem to get very far with Rob. how it's going to work. Will there be enough money for everybody? She currently works at the local day care. John has an agriculture business degree from the University of Manitoba and works for the provincial Department of Agriculture. John is paid a wage of almost $65,000 per year. John had a couple of other jobs before catching on with the Ministry. He likes his job but is increasingly finding office work to be slow-paced. Returning to one of his former employers was a possibility but he really liked to help out with the harvest in the fall when he could and the dream of farming at some point never got too far away. However, while he and Rebecca have no children, they are definitely in the picture and raising Both Rob and Faye feel the equity they have built in the farm will provide protection for their family and for their retirement. Faye's parents ran a successful construction business and have done quite well. There could be a sizeable estate to distribute. However, there has been no discussion within her family about her parents' estate settlement plans nor has Faye seen any Will. Both her parents them on a farm, near a small community seems really attractive. Rebecca really are in excellent health. Rob's parents have both passed away. Rob and Faye's thinks they should start their family right away, especially if she isn't going to be pursuing any real career path in the foreseeable future. term loans are life insured. Rob has no disability insurance. There are no other life insurance policies. Rob seems to be under constant stress and this causes Faye some concern. Rob and Faye's daughter, Carol, is finishing university this year with a degree in Education from the University of Calgary. Carol is in a long term relationship with Brad, an apprentice carpenter. Their plans are unknown but will hinge a lot on Carol's employment situation. While Carol did help on the farm when she was She has a hard time getting him to talk about their situation. Compounding the situation is the possibility that John and Rebecca are moving back to the farm. Faye wonders if Rob is worried about how all this will work out. And who knows younger, no discussions have taken place around any potential farm interest. what Carol and Brad might want to do in the future. PAGE 9 THE FUTURE As mentioned, they were able to get through the harvest without too much difficulty but feel that they need to take some action as they don't want to find themselves in a situation like that again. But what to do? How do they avoid hiring someone that will leave within a year or two? Now that Rebecca and John have committed to returning to the farm, how is this all going to work out? 2015 2016 $860,058 $1,144,035 $1.456,785 $394,331 $2,004,093 $1,851,116 $381,991 $223,288 $114,958 $27,407 $747,644 $240,996 $240,577 $164,351 $38,217 $684,141 $1,256,449 $1,166,975 B 1 Sample Farms Ltd. Income Statement 2 3 2012 2013 2014 4 5 INCOME 6 Crop Sales $1,265,882 $1,307,341 $1,056,547 7 Inventory Change $58,458 ($547,832) ($386,494) 8 9 GROSS REVENUE $1,324,340 $759,509 $670,053 10 11 PRODUCTION EXPENSES 12 Fertilizer $291,717 $241,624 $279,728 13 Chemical $147,110 $150,966 $154,134 14 Seedigrain purchases $226,939 $179,022 $204,872 15 Crop Insurance $18,611 $16,370 16 Total $684,377 $587,982 $638,734 17 18 GROSS MARGIN $639,963 $171,527 $31,319 19 20 OPERATING EXPENSES 21 Custom York $67,355 $76,637 $17.990 22 Fuel and oil $42,186 $54,447 $44,441 23 Vages (direct) $63,106 $59,670 $61,212 24 Repairs & Maintenance - Machinery $91,503 $85,937 $33,538 25 Total Operating Expenses $264,150 $276,691 $157,181 26 27 CONTRIBUTION MARGIN $375,813 ($105,164) ($125,862) 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities $13,273 $11,431 $14,953 31 Rent $64,659 $56,969 $61,201 32 Repairs & Maintenance - Building $26,333 $20,286 $11.473 33 Insurance $34,731 $39,195 $39,532 34 Interest & Bank charges $16,677 $19,887 $28,932 35 Interest on Long Term Debt $91,216 $82,664 $97,054 36 Office $34,020 $24,577 $25,530 37 Professional Fees $10,468 $7,134 $7,475 38 Property Taxes $23,521 $26,284 $22,743 39 Salaries & Benefits $67,212 $73,299 $72,167 40 Amortization $99,037 $91,976 $107,625 41 Total Overhead & Administration Exp $481,147 $453,702 $488,685 42 43 NET OPERATING PROFIT ($105,334) ($558,866 ($614,547) $82,229 $72,140 $73,374 $49,235 $276,978 $84,101 $65,821 $97,864 $69,225 $317,011 $979,471 $849,964 $12,143 $60,304 $28,179 $30,876 $22,554 $98,254 $31,860 $9,050 $11,687 $74,276 $106,816 $485,999 $15,898 $71,652 $11,230 $30,646 $22,638 $102,084 $21,029 $8,740 $14,998 $73,259 $79,652 $451,826 $493,472 $398,138 $18,988 $16,384 $3,255 ($26,512) $12,115 $290,477 $25,226 $11,903 ($14,398) $313,208 $291,058 $17,194 $13,857 $0 $322.109 45 OTHER REVENUE (EXPENSE) 46 Programs (Government) $231,382 47 Rebates $17.667 48 Custom work $18,326 49 Gain / (Loss) on capital assets $13,389 50 Total Other $280,764 51 52 NET INCOME $175,430 53 514 Balance Sheet $117,295 $22.437 $17,083 $156,815 $546,7511 ($301339 $815581 $554,953 Income Statement + Clipboard Font Alignment Number PS fr E F O 2015 2016 $880,058 $1,144,035 $1,456,785 $394,331 $2,004,093 $1851,116 A B C D 1 Sample Farms Ltd. Income Statement 2 3 2012 2013 2014 4 5 INCOME 6 Crop Sales $1,265 882 $1 307,341 $1,056,547 7 Inventory Change $58,458 (5547,832) ($386 495) 8 9 GROSS REVENUE $1,324,340 $759, 509 $670,063 10 11 PRODUCTION EXPENSES 12 Fertilizer $291 717 $241 624 $279,728 13 Chemical $147,110 $150,966 $154,134 14 Seed/grain purchases $226,939 $179,022 $204,872 15 Crop Insurance $18,611 $16,370 $0 16 Total $684,377 $587,982 $638,734 17 18 GROSS MARGIN $639,963 $171,527 $31,319 19 20 OPERATING EXPENSES 21 Custom Work $67,355 $76,637 $17,990 22 Fuel and oil $42,186 $54,447 $44,441 23 Wages (direct) $63, 106 $59,670 $61,212 24 Repairs & Maintenance - Machinery $91,503 $85,937 $33538 25 Total Operating Expenses $264, 150 $276,691 $157,181 26 27 CONTRIBUTION MARGIN $375, 813 ($105,164) ($125,862) 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities $13,273 $11,431 $14.963 21 Rent R4 64 SS. SR1 201 Balance Sheet Income Statement $381 991 $223,288 $114,958 $27,407 $747 644 $240.996 $240,577 $164,351 $38,217 $694,141 $1,258 449 $1,166,975 $82.229 $72,140 $73,374 $49 235 $276.978 $84,101 $85,821 $97,884 $69,225 $317011 $979,471 $849.964 $12,143 $60304 $15,898 $71.52 IC all all 11 IM IM $ % GU 00 300 > Conditional Formatting Clipboard Font 27 Alignment Number 12 P5 X fi B $91,503 $284, 150 $85,937 $276,691 D $33,538 $157,181 E $49,235 $276,978 F $69,225 $317 011 $375,813 ($105,164) ($125 962) $979,471 $849,964 A 24 Repairs & Maintenance - Machinery 25 Total Operating Expenses 26 27 CONTRIBUTION MARGIN 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities 31 Rent 32 Repairs & Maintenance - Building 33 Insurance 31 Interest & Bank charges 35 Interest on Long Term Debt 36 Office 37 Professional Fees 33 Property Taxes 39 Salaries & Benefits 40 Amortization 41 Total Overhead & Administration Expenses 42 43 NET OPERATING PROFIT 44 45 OTHER REVENUE (EXPENSE) 46 Programs (Government) 47 Rebates 48 Custom work 49 Gain /(Loss) on capital assets 50 Total Other 51 52 NET INCOME $13,273 $64,659 $26,333 $34,731 $16,677 $91,216 $34,020 $10,468 $23,521 $67,212 $99,037 $481,147 $11,431 $56,969 $20,286 $39,195 $19,887 $82,664 $24,577 $7,134 6,284 $73,299 $91,976 $453,702 $14,953 $61 201 $11.473 $39,532 $28,932 $97,054 $25,530 $7,475 $22,743 $72, 167 $107,625 $488,685 $12,143 $60,304 $28,179 $30,876 $22,554 $88,254 $31,860 $9,050 $11,687 $74,276 $106,816 $485,999 $15,898 $71,652 $11 230 $30,846 $22,638 $102,084 $21,029 $8,740 $14.998 $73,259 $79,652 $451,826 + ($105,334) ($558 866) ($614547 $493 472 $398,138 $231,382 $17,667 $18,326 $13,389 $280,764 $18,988 $16,384 $3,255 {$26 512) $12,115 $290,477 $25 226 $11,903 ($14,399) $313,208 $291 058 $17,194 $13,857 $0 $322,109 $117,295 $22,437 $17,083 $0 $156,815 $175 430 18546751) 18301339) $815 581 $554 953 Balance Sheet Income Statement PAGE 2 ROB and FAYE SAMPLE SAMPLE FARMS LTD. equipment capacity. The existing facility is now essentially over-capacity for A CASE STUDY what was originally designed. PAGE 1 In the winter of 2015/16. Rob and Faye have some decisions to make. They had Both Rob and Faye feel the nearly 4,200 cultivated acres they farm is enough been managing quite nicely until 2012 and 2013 when they had a couple of really. "We have what we want," says Rob. "We work hard and don't seem to have a lot tough years. 2012 was especially tough with poor yields. Things improved of time away from the business even though we have some excellent help." immensely in 2014 and 2015. There was an issue though. They lost a long term, They were using a full time employee and some seasonal assistance during the hard working employee just before harvest. They were able to get through the summer and fall. It was always a struggle to find good employees or sometimes harvest but without their employee, it was tough. There were long hours and the even to find an employee at all. Years ago, when Rob and Faye believed they stress levels were high. Rob and Faye realize that they need to take some just needed help during seeding and harvest, they would try to find help at those action as they don't want to find themselves in the situation again. particular..times Often they found unqualified, unreliable and unmotivated people. Faye often said they seem transient, not really caring about anything but the paycheck. We had one guy who would miss work after he got his BACKGROUND Rob and Faye have been farming in Manitoba for 33 years. They purchased 800 acres of land in 1981 from Rob's father, paying $200,000 for it. A few years paycheck. It was stressful trying to find and keep people." They decided to find and keep a full time employee (Jim) with some seasonal assistance as a way to manage the issue of getting the help they needed, when they needed it. The later, they purchased an adjoining half section for $128,000 The first land purchase was paid off in 1990, and their second purchase was paid off in the concept came with a cost as it was a challenge to keep people busy during the year 2000. They purchased another 1,440 acres, plus some outbuildings, in 2011 for $1,400,000. A neighbor and long term landlord had wanted to sell and winter. It worked fairly well until Jim, who was a long tenure employee, abruptly left just before harvest last year. They're not entirely sure why he left. It was they really didn't think they had any option but to make the purchase. They had lucky that it was an open fall, and that John (their son) could get back to help that added a grain handling system just about 10 years ago now. The old, smaller year. granaries Rob's father had used were not really functional, given modern PAGE 3 PAGE 4 Rob and Faye farm together in a corporate structure. They each own 50% of the Recently, with family imminently set to come back to the farm, Rob and Faye common shares. The land they bought from their father and the next parcel is in have been wondering if some investing in some other business might be the best both their personal names, held outside the company. There is no rental way to go arrangement with the corporation for this land. The most recent land acquisition was purchased by the company and is held inside the corporation. They weren't Rob says that their lenders do not appear to be overly concerned but do seem to sure what was the best way to structure the purchase but after a lot of be asking for more and more information. Granted, it was worse a couple of discussion, they opted to have the company own the land. years ago but now, even after a couple of pretty good years, there is a requirement for more and more reporting and information. THE FARM BUSINESS Managing a successful farm these days is much like a juggling act with the daily In spite of the hard work and low profit from time to time, Rob and Faye feel that demands of the business and the seasonal production urgencies. It can get to be farming has given them a good life. Right now, Rob and Faye should be a bit stressful. They have been looking at the costs in their business and ways in beginning to enjoy more of the benefits associated with farming. The farm which they could reduce them. For example, the costs associated with the should be comfortably paying its way. They have accumulated just over custom work they require. It is fairly significant. It seems every year that the $1,700,000 in owner's equity or about $3,600,000 of equity (net worth) when the timing of getting the custom work done isn't what it should be and that sometimes shareholder loans are excluded and market value of the assets, including it affects quality and yield. They run one combine and one seeding unit. Both are personally held land, is factored in. maxed out in terms of capacity. Rob's equipment could stand to be upgraded somewhat as it is a bit older and the capacity would have to be greater if they They have three term loans, an operating loan and some accounts payable. The were to use less custom work. That's why they started with the custom work in operating loan has not revolved in the last two or three years. The table below the first place. The capital investment would mean more debt but would summarizes the existing term loans. eliminate a lot of the custom work. PAGE 5 PAGE 6 Original Date Original Principal and Principal due Principal Outstanding Amount Interest 2016 brighter and the renovations were long overdue. Rob has in the past tended to purchase smaller capital items through the operating line rather than setting up repayment terms. Cashflow feels tight at times but maybe it's still a hangover Annualized December 2015 from 2012 and 2013 2011 $1,400,000 $127,058 $1,244,561 $49,885 2013 $ 350,000 $ 70.000 $ 210.000 $70,000 THE MANAGEMENT (equal principal) $ 11,548 2014 $ 50,000 $ 40,962 $ 9,495 The large loan taken out in 2011 to purchase some land was definitely a risk. It was financed over 20 years with a maturity in 2031. But given the circumstances, they dido't feel that they had any option. Luckily they had their land paid for so there was enough security to complete the purchase without any down payment, though the loan did equal about 60% of the total land value. There was a loan taken early in 2013 to provide some additional operating capital; financed over 5 The management structure is similar to the vast majority of mid-sized farms. Faye does the bookkeeping and helps with the office functions, such as payroll and GST reporting. Rob's passion is farming and while he assumes responsibility for all other management functions, he'd rather be outside working. He knows that there should be some changes, but things were working fine until Jim resigned. There dido't seem to be any issues, at least none that Rob could pinpoint. Sure, there were some arguments from time to time. Jim's kids were now teenagers and maybe there was some worry about the farm's financial picture after those bad years. years. They didn't want to do this, but thought that they didn't have many options as 2012 was a terrible year, THE FAMILY They took out a loan in 2014 to complete some home renovations and to purchase a fifth wheel The last loan has a 5 year term. It represents an additional commitment to annual cashflow, but they wanted to try and get some Rob is 56 and Faye is 54 years old. They have a 29 year old son and a 27 year old daughter. Their son, John, is married to Rebecca. Rebecca grew up in Winnipeg and is an occupational therapist. There are not a lot of employment opportunities for Rebecca in her area of training. It will be even more difficult to find employment in her profession now that they have decided to return to the time away from the farm. Plus the fact that the farming picture was much PAGE 7 PAGE 8 farm. There was a lot of discussion with the family about the commitment but she and John talked it over a lot and this is what they want to do. They're not sure Rob and Faye take a fixed management salary of $60,000 plus an allowance for their daughter attending university. Every month, Rob takes money from the farm account and transfers it into a separate account for family living expenses. Faye believes they should be placing an emphasis on family savings and security, with planning and saving for retirement becoming one of their priorities but she cannot seem to get very far with Rob. how it's going to work. Will there be enough money for everybody? She currently works at the local day care. John has an agriculture business degree from the University of Manitoba and works for the provincial Department of Agriculture. John is paid a wage of almost $65,000 per year. John had a couple of other jobs before catching on with the Ministry. He likes his job but is increasingly finding office work to be slow-paced. Returning to one of his former employers was a possibility but he really liked to help out with the harvest in the fall when he could and the dream of farming at some point never got too far away. However, while he and Rebecca have no children, they are definitely in the picture and raising Both Rob and Faye feel the equity they have built in the farm will provide protection for their family and for their retirement. Faye's parents ran a successful construction business and have done quite well. There could be a sizeable estate to distribute. However, there has been no discussion within her family about her parents' estate settlement plans nor has Faye seen any Will. Both her parents them on a farm, near a small community seems really attractive. Rebecca really are in excellent health. Rob's parents have both passed away. Rob and Faye's thinks they should start their family right away, especially if she isn't going to be pursuing any real career path in the foreseeable future. term loans are life insured. Rob has no disability insurance. There are no other life insurance policies. Rob seems to be under constant stress and this causes Faye some concern. Rob and Faye's daughter, Carol, is finishing university this year with a degree in Education from the University of Calgary. Carol is in a long term relationship with Brad, an apprentice carpenter. Their plans are unknown but will hinge a lot on Carol's employment situation. While Carol did help on the farm when she was She has a hard time getting him to talk about their situation. Compounding the situation is the possibility that John and Rebecca are moving back to the farm. Faye wonders if Rob is worried about how all this will work out. And who knows younger, no discussions have taken place around any potential farm interest. what Carol and Brad might want to do in the future. PAGE 9 THE FUTURE As mentioned, they were able to get through the harvest without too much difficulty but feel that they need to take some action as they don't want to find themselves in a situation like that again. But what to do? How do they avoid hiring someone that will leave within a year or two? Now that Rebecca and John have committed to returning to the farm, how is this all going to work out? 2015 2016 $860,058 $1,144,035 $1.456,785 $394,331 $2,004,093 $1,851,116 $381,991 $223,288 $114,958 $27,407 $747,644 $240,996 $240,577 $164,351 $38,217 $684,141 $1,256,449 $1,166,975 B 1 Sample Farms Ltd. Income Statement 2 3 2012 2013 2014 4 5 INCOME 6 Crop Sales $1,265,882 $1,307,341 $1,056,547 7 Inventory Change $58,458 ($547,832) ($386,494) 8 9 GROSS REVENUE $1,324,340 $759,509 $670,053 10 11 PRODUCTION EXPENSES 12 Fertilizer $291,717 $241,624 $279,728 13 Chemical $147,110 $150,966 $154,134 14 Seedigrain purchases $226,939 $179,022 $204,872 15 Crop Insurance $18,611 $16,370 16 Total $684,377 $587,982 $638,734 17 18 GROSS MARGIN $639,963 $171,527 $31,319 19 20 OPERATING EXPENSES 21 Custom York $67,355 $76,637 $17.990 22 Fuel and oil $42,186 $54,447 $44,441 23 Vages (direct) $63,106 $59,670 $61,212 24 Repairs & Maintenance - Machinery $91,503 $85,937 $33,538 25 Total Operating Expenses $264,150 $276,691 $157,181 26 27 CONTRIBUTION MARGIN $375,813 ($105,164) ($125,862) 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities $13,273 $11,431 $14,953 31 Rent $64,659 $56,969 $61,201 32 Repairs & Maintenance - Building $26,333 $20,286 $11.473 33 Insurance $34,731 $39,195 $39,532 34 Interest & Bank charges $16,677 $19,887 $28,932 35 Interest on Long Term Debt $91,216 $82,664 $97,054 36 Office $34,020 $24,577 $25,530 37 Professional Fees $10,468 $7,134 $7,475 38 Property Taxes $23,521 $26,284 $22,743 39 Salaries & Benefits $67,212 $73,299 $72,167 40 Amortization $99,037 $91,976 $107,625 41 Total Overhead & Administration Exp $481,147 $453,702 $488,685 42 43 NET OPERATING PROFIT ($105,334) ($558,866 ($614,547) $82,229 $72,140 $73,374 $49,235 $276,978 $84,101 $65,821 $97,864 $69,225 $317,011 $979,471 $849,964 $12,143 $60,304 $28,179 $30,876 $22,554 $98,254 $31,860 $9,050 $11,687 $74,276 $106,816 $485,999 $15,898 $71,652 $11,230 $30,646 $22,638 $102,084 $21,029 $8,740 $14,998 $73,259 $79,652 $451,826 $493,472 $398,138 $18,988 $16,384 $3,255 ($26,512) $12,115 $290,477 $25,226 $11,903 ($14,398) $313,208 $291,058 $17,194 $13,857 $0 $322.109 45 OTHER REVENUE (EXPENSE) 46 Programs (Government) $231,382 47 Rebates $17.667 48 Custom work $18,326 49 Gain / (Loss) on capital assets $13,389 50 Total Other $280,764 51 52 NET INCOME $175,430 53 514 Balance Sheet $117,295 $22.437 $17,083 $156,815 $546,7511 ($301339 $815581 $554,953 Income Statement + Clipboard Font Alignment Number PS fr E F O 2015 2016 $880,058 $1,144,035 $1,456,785 $394,331 $2,004,093 $1851,116 A B C D 1 Sample Farms Ltd. Income Statement 2 3 2012 2013 2014 4 5 INCOME 6 Crop Sales $1,265 882 $1 307,341 $1,056,547 7 Inventory Change $58,458 (5547,832) ($386 495) 8 9 GROSS REVENUE $1,324,340 $759, 509 $670,063 10 11 PRODUCTION EXPENSES 12 Fertilizer $291 717 $241 624 $279,728 13 Chemical $147,110 $150,966 $154,134 14 Seed/grain purchases $226,939 $179,022 $204,872 15 Crop Insurance $18,611 $16,370 $0 16 Total $684,377 $587,982 $638,734 17 18 GROSS MARGIN $639,963 $171,527 $31,319 19 20 OPERATING EXPENSES 21 Custom Work $67,355 $76,637 $17,990 22 Fuel and oil $42,186 $54,447 $44,441 23 Wages (direct) $63, 106 $59,670 $61,212 24 Repairs & Maintenance - Machinery $91,503 $85,937 $33538 25 Total Operating Expenses $264, 150 $276,691 $157,181 26 27 CONTRIBUTION MARGIN $375, 813 ($105,164) ($125,862) 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities $13,273 $11,431 $14.963 21 Rent R4 64 SS. SR1 201 Balance Sheet Income Statement $381 991 $223,288 $114,958 $27,407 $747 644 $240.996 $240,577 $164,351 $38,217 $694,141 $1,258 449 $1,166,975 $82.229 $72,140 $73,374 $49 235 $276.978 $84,101 $85,821 $97,884 $69,225 $317011 $979,471 $849.964 $12,143 $60304 $15,898 $71.52 IC all all 11 IM IM $ % GU 00 300 > Conditional Formatting Clipboard Font 27 Alignment Number 12 P5 X fi B $91,503 $284, 150 $85,937 $276,691 D $33,538 $157,181 E $49,235 $276,978 F $69,225 $317 011 $375,813 ($105,164) ($125 962) $979,471 $849,964 A 24 Repairs & Maintenance - Machinery 25 Total Operating Expenses 26 27 CONTRIBUTION MARGIN 28 29 ADMINISTRATION and OVERHEAD EXPENSES 30 Utilities 31 Rent 32 Repairs & Maintenance - Building 33 Insurance 31 Interest & Bank charges 35 Interest on Long Term Debt 36 Office 37 Professional Fees 33 Property Taxes 39 Salaries & Benefits 40 Amortization 41 Total Overhead & Administration Expenses 42 43 NET OPERATING PROFIT 44 45 OTHER REVENUE (EXPENSE) 46 Programs (Government) 47 Rebates 48 Custom work 49 Gain /(Loss) on capital assets 50 Total Other 51 52 NET INCOME $13,273 $64,659 $26,333 $34,731 $16,677 $91,216 $34,020 $10,468 $23,521 $67,212 $99,037 $481,147 $11,431 $56,969 $20,286 $39,195 $19,887 $82,664 $24,577 $7,134 6,284 $73,299 $91,976 $453,702 $14,953 $61 201 $11.473 $39,532 $28,932 $97,054 $25,530 $7,475 $22,743 $72, 167 $107,625 $488,685 $12,143 $60,304 $28,179 $30,876 $22,554 $88,254 $31,860 $9,050 $11,687 $74,276 $106,816 $485,999 $15,898 $71,652 $11 230 $30,846 $22,638 $102,084 $21,029 $8,740 $14.998 $73,259 $79,652 $451,826 + ($105,334) ($558 866) ($614547 $493 472 $398,138 $231,382 $17,667 $18,326 $13,389 $280,764 $18,988 $16,384 $3,255 {$26 512) $12,115 $290,477 $25 226 $11,903 ($14,399) $313,208 $291 058 $17,194 $13,857 $0 $322,109 $117,295 $22,437 $17,083 $0 $156,815 $175 430 18546751) 18301339) $815 581 $554 953 Balance Sheet Income Statement