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13 Cards in this Set

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What is benchmarking?
Benchmarking is the process of comparing results from your business to results of similar businesses, so as to know where the greatest scope exists for your business to be more efficient. (Eg where costs might be cut, or revenues increased.)
What does your "Percentage of the average" mean?
Is your result expressed as a percentage of the average for that category. (That is your_figure divided by the FBS_figure times 100).
What does your "Relative rank" mean?
It is where your figure falls in terms of the percentage of farms in the category when they are ranked from 'Low' to 'High', for that figure. For example, a 'Low' comment for 'sales and subsidies' means that the level of 'sales and subsidies' in your accounts falls within the range shown by _the 25% of farms in the category with the lowest level_ of sales and subsidies.
Define "Gross margin"?
Enterprise output minus variable costs.
Define "Variable costs"?
Are those costs that vary directly in proportion to the amount of production. Eg To produce more wheat, more seed is needed. Or, for a retailer, the "cost-of-goods-sold".
What does "Gross margins in the top 25% of farms with Enterprise"?
Are farm businesses which came within the top 25% of all farms with that enterprise (for enterprise gross margins), in terms of gross margins per hectare, or per head, as appropriate.
What are "High performers" in profitability, balance sheets, or performance ratios?
The top 25% of farms of that type (for profitability, balance sheets, and performance ratios) in terms of ratio of total output to total input (measured in Pounds Sterling).
Define "Net profit" as used in "Farm profitability"?
Is profit before 'rent, interest and bank charges' (are deducted). This enables your results to be compared on a 'level playing field' with other farms regardless of whether they are tenanted or owner occupied.
What is "Machinery depreciation"?
Is used to account for the (depreciating) CAPITAL COST of machinery and plant over their useful life. It can be calculated on the basis of "straight-line" or "current-value".
What is included in "Sales" in "Farm profitability"?
The sum of enterprise outputs, plus incomes from miscellaneous activities (eg agri-environment, or farm cottage rental)
What is "Enterprise output"?
The sum of farm product (output) sales (eg crops or milk), plus direct subsidies, plus by-product sales.
Why is a "Low" relative rank for a cost not always good?
You might use higher quality inputs, or have a more severe biological constraint (eg a weed infestation).
Why is a "Low" relative rank for a output price not always bad?
You might sacrifice lower quality for greater yield. Eg grow feed wheat, instead of premium milling wheat.