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A key objective of the FARM Assistance analysis is to compare and contrast the expected outcomes of different strategic actions for a farm or ranch by conducting a “what if” type of analysis. As s result, participants can evaluate the implications of many different production scenarios and gain insight on the answer to the following question: What is the best plan to follow given my current situation as well as the opportunities and risks that I face?
An investment analysis is typically focused on two main issues, financial profitability and financial feasibility. The projected change in the financial position of a business is a significant indication of the plan’s profitability. For this reason the analysis will often focus on the change in real net worth over the time period and compare the projected ending real net worth of each alternative. Pointing out the annual cash position and the probability of cash shortages highlights the feasibility of each plan.
Again, this analysis is intended to provide information to support the decision-making process. It is not intended to make a decision for you. Because the FARM Assistance analysis compares the ranges of possibilities for different strategic actions, it is not always clear that one plan is better that another. It may be that one plan is expected to generate more net worth, but it is less feasible in terms of cash flow. In other cases, an alternative plan may have a higher average net worth but more downside risk. Each subscriber must also weigh other factors in their decision such as the level of work or stress associated with a particular strategic plan.
The FARM Assistance analysis will make no recommendations. The decision made is up to the individual and will depend on personal preferences and the level of risk each individual is willing to take. The purpose of the FARM Assistance program is to objectively present the information that will be the most valuable to subscribers as they make their business decisions.