Assessment of Farm Business Health and Long-Run Forward Business Planning.

Experiences with the Top Farm Management Farm Business Simulation Model.

R. A. Schoney
Dept. of Agricultural Economics
University of Saskatchewan

As farms become larger and more capital intensive, long-run forward planning and risk assessment become increasingly more important. The Top Management Farm Business Simulator is designed to assist producers in assessing the profitability and risk of alternative farm business opportunities. This is done in three steps: prognosis, diagnosis and prescription. Prognosis is based on projecting business income, cash flows and net worth over periods of up to 15 years. Farm business wealth is assessed based on the ability of the firm to generate positive cash flows and a reasonable return to equity within an acceptable level of risk. Diagnosis is based on the comparison of firm cost efficiency and financial structure to peer performance benchmarks. Prescriptive analysis is based on the comparison of the risk-return efficiency of the base scenario to up to seven business alternatives. Risk efficiency tests include first and second degree stochastic dominance and stochastic dominance with respect to a function.

Monday, February 24, 1997
Park Town Hotel, Birch Room
Cocktails 5:30, Dinner 6:00, Presentation 7:00

Tickets $17
For more information contact:
Kent Kostuk 373-8255 kent.kostuk@usask.ca
Winfried Grassmann 966-4898 grassman@cs.usask.ca