NPR - STANDARDIZING CANADIAN FARM FINANCIAL STATEMENTS: COLLABORATION BETWEEN EDUCATORS AND PRACTITIONERS

Abstract:
Standardized operating statements producing comparably calculated financial ratios useful as performance benchmarks are used in CTEAM, a management training program for farmers in Canada. Their value in helping farmers understand and improve their management performance led to collaboration between AME the training company and BDO Canada to introduce the standardized statements and ratios to BDO’s farm clients. This paper explains the collaboration between the two companies and extensions of the concepts to additional farmers in Canada and the US by GAA. The structure and rationale of the standardized statement are presented in this paper. The resulting ratios are defined and their management performance implications are examined. Their value in application is demonstrated by application to three BDO client farms. The applications identify areas in which the farms are performing well and those in which they have performance issues. Next steps for the collaboration are identified.
Key words: Financial Management; Benchmarking; Management Training.