Definitions
The following income and expenditure categories were used to summarise the analysis, each set of data was standardised using the same format from current or historical accounts.
GROSS FARM INCOME: All farm income from sales of sheep, wool, cattle, deer, goats, crops; any other farm income (net of livestock purchases).
Less:
TOTAL FARM WORKING EXPENDITURE: including the following categories of
expenses:-
- Working Expenses: Fertiliser, Wages, Contracting, Shearing, Cultivation, Animal Health, Breeding, Feed, Concentrates, Grazing, Dog Food, Selling Charges, Seeds, Cash Cropping Expenses, Sacks & Twine, Spraying, Freight, Weed & Pest, Farm Electricity, Stores, Trees.
- Repairs & Maintenance: Farm Buildings, Fencing and Yards, Water Supply, Irrigation, Drainage, Plant & Machinery, and General maintenance of a non-capital nature.
- Vehicle Expenses: Farm Fuel, Vehicle R&M, Registration and Insurance, Farm Car.
- Fixed Expenses: Farm Insurance, ACC, Rates.
- Administration: Accountancy, Consultancy, Telephone, General, Bank Fees.
EQUALS: ...... CASH FARM SURPLUS
Less:
- Debt Servicing: Interest and Principal on Current Account, Term, Mortgages, Hire Purchase,
- Family Loans and Rent (if any).
- Personal Drawings, House, Car, Insurance, Produce Used.
- Taxation Income Tax and Net GST Payments were not included in the analysis.
EQUALS: ........... DISPOSABLE PROFIT
Less:
- Capital: Capital Replacement, Vehicle & Plant Purchases, Other (net of any capital sales), Capital Development, Fencing, Irrigation, etc.
- Investment: Add New Loans, Subtract extraordinary Principal Repayments (if any), Investments (off-farm investments or capital injections), Income Equalisation Adjustments.
Plus:-
Off Farm Income:
EQUALS: ... NET CASH SURPLUS/DEFICIT OR CHANGE TO CURRENT ACCOUNT
Income tax and net GST payment figures were not included in the analysis. Both disp6sable profit and Net cash results are therefore pre-tax figures.
Equity was not analysed for the time series data because this would have required the valuation of stock, land and plant over the period rather than simply using book values for assets. The period post 1985 was one in which capital farm values varied greatly due to the economic reforms and the cost pnce squeeze affecting farm profitability and the market valuation of farmland.
The 10 case studies are presented in Part II of this report.
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