BEC-20806 Financial Management in Agriculture

Course

Credits 6.00

Language of instruction:

English

Assumed knowledge on:

Introduction to Business Economics (BEC-10306) or equivalent.

Continuation courses:

BEC-21306 Food Safety Economics; BEC-30306 Advanced Agricultural Business Economic; BEC-52806 Economics of Animal Health and Food Safety; BEC-50306 Advanced Financial Management.

Contents:

This course gives an overview and insight in the economics of the farm business, with a focus on financial management and accounting. Like corporate managers, farm managers continuously have to make decisions and control their business. There is a need to adapt their business to the current external environment and to anticipate future internal and external developments. For this purpose farm managers need reliable financial data based on a well defined accounting system, a good analysis of these data and information for decision making. Also stakeholders like banks, suppliers, government etc. have interest in reliable data and information from farms. This course deals with the financial management and accounting of the farm business both from the perspective of the farm manager and the other stakeholders.

Learning outcomes:

After successful completion of this course students are expected to be able to:
- explain the nature and scope of financial management and the major goals that motivate managerial performance of an agricultural business;
- explain the different legal forms of business organisation in agriculture;
- explain the financial statements, financial analysis and control, and financial planning;
- Analyse information in financial reports and to benchmark individual farms against other farms in the sector, with a special focus on farm specific averages;
- explain the concepts of financial leverage, risk, liquidity and lender-borrower relationships and to analyse their effects on business performance;
- explain the concepts and tools of asset valuation and long-term financial decision making, and apply these under conditions of risk and inflation and under alternative financing arrangements for owning and leasing business assets.

Activities:

The course includes lectures, practical's (cases) and computer practical's.

Examination:

All learning outcomes are assessed in the final exam. The final exam consists of multiple choice questions (40%) and open questions (60%).
Earned credits (up to maximum of 1.0) from the casework are charged in the end-mark, however only in the exams of the academic year in which the credits were earned and only if the grade for the final exam is at least 5.0.

Literature:

Barry, P.J. & P.N. Ellinger (2012). Financial management in agriculture. 7th ed. Pearson Education. ISBN 0-13-503759-x.
Readers with additional study material, handouts and practical exercises. For sale at WUR shop.