PRACTICING GOOD BUSINESS RELATIONS IN THE HORTICULTURE INDUSTRY

What kinds of records should businesses keep? Assets Liabilities Net worth Profit and loss statement Cash receipts Non-cash receipts Invoice

Assets

Things that one owns and completely pays for.

Example: Your car after all payments have been made.

Assets

Current Assets-items quickly converted to cash or that will be sold within 12 months cash checking savings stocks or bonds

Assets

Non-current-items that have a useful life or more than one year land machinery breeding livestock

Liabilities

Things that you owe money to other people for or debts

Example: My Visa

Liabilities

Current-debts that are due to be paid this year fertilizer and feed bills tractor and building payments part of the mortgage due this year

Non-Current-debts not due this year mortgages not due this year

Net Worth

One’s assets minus their liabilities. You have $3000 in the bank, but you owe

$1750 for your bills. Your net worth is $1250.00.

Net Worth

Current Assets + Non-Current Assets=Total Assets

Current Liabilities + Non-Current Liabilities=Total Liabilities

Inventory

An itemized list of things owned by a business with the beginning value and depreciated value

Inventory

Non-depreciable-items that will be used or sold within a year feed supplies

Inventory

Depreciable-items that have a useful life of more than one year and lose value because of age, wear or becoming out-of date because of technology advancements.

Land is NOT depreciable property tractor computer chainsaw

Profit and loss statement

A financial statement of a business that reports the profit made by the business or the losses incurred.

Cash receipts

Cash that is paid for services or merchandise.

Non-Cash receipts

Payment for services in other ways than cash.

Invoice

Shows items and prices for things that have been bought from a certain business.

Other business records

Labor Materials Travel

Debt-to-Equity Ratio

Used by banks and lending institutions to decide whether or not to lend money to specific people or businesses

Debt-to-Equity Ratio = Total Liability

Net Worth