March Madness

Many producers are itching to get into the fields to start planting. If that is your case, remember, safety first!

Capital Turnover Ratio

Do you want to know the latest fun financial standards ratio to measure economic performance? One land-grant university found that the capital turnover ratio is significant in the success of the loan and the business.

This ratio is calculated by going to your records and getting total revenue and total assets. Divide total revenue into total assets. For example, if your assets are $1,000,000 and revenues are $500,000, the capital turnover would be two years.

In general, feedlots, dairies, hog operations, and horticulture businesses turn their capital much faster than grain and beef cow-calf operations. A benchmark for grain operations is every four to seven years. Lower it to two to three years if you lease or rent. For dairy and horticulture, the ratio can be as low as six months to two years.

As America attempts to compete globally, producers will attempt to get more out of fixed costs, causing the ratio to decrease.

Tips

  • Watch oil prices if we go to war with Iraq. They will shoot to $25 to $35 a barrel!

  • The job market is tight. Only one out of 45 students in my problem solving class has a job. Five are going to graduate school.

  • Three of my Final Four:

  • Duke

    Oklahoma

    Oregon

    Wild Card, possibly Illinois

Pot Hole

Boy, Delta Airlines has less than desired service out of Atlanta! The little commuter flight that is always late was cancelled. Back to their old tricks!

Rule of Thumb: If the trip is under six hours, just drive there!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

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