EXPLANATION OF KEY FINANCIAL RATIOS

Used In The Farm Survey

The following financial benchmarks are in no particular order. The benchmarks have been derived from the performance of the top 20% of clients. They indicate the key financial drivers, which are leading to a very good financial performance for these top 20% of farmers on an ongoing basis.

There are top farmers who can go outside one of the financial benchmarks and still generate healthy financial performances on an ongoing basis, however breaking two key benchmarks over a reasonable period could severely challenge even the top farmers’ ongoing viability.

The key point with ratios is to analyse them over a number of years to identify the trends.