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Dairy Business Analysis Project: Financial Summary for 1995-2001¹

A. de Vries, R. Giesy, L. Ely, A. de Araujo, A. Andreasen, B. Broaddus, S. Eubanks, D. Mayo, P. Miller, T. Seawright, C. Vann²

Introduction

The Dairy Business Analysis Project (DBAP) was initiated in 1996 by the University of Florida in an effort to measure and document the financial performance of Florida dairy businesses using standardized accounting measures. The University of Georgia has been a collaborator since 1998. The DBAP website is http://www.animal.ufl.edu/dbap .

Financial data for the years 1995 through 2001 were collected from participating dairies and screened for completeness and validity. Each dairy then received a report detailing its financial results compared to the average results for the other participants and the dairies with the highest net farm income from operations per cwt.

This publication is a summary of the data collected for the years 1995 through 2001. Some results may be slightly different from the annual DBAP summaries published in EDIS because minor changes in the calculations have been made over the years. This publication is intended for general use by dairy farmers, the allied industry, and government, and educational professionals.

Data Collection and Accounting Methods

Dairy businesses in Florida, Georgia, and Alabama were asked to participate in DBAP. Participants were therefore not a random sample of all dairies in the three states.

Most of the data were collected by extension agents when visiting farms using a standardized data collection spreadsheet. Occasionally, data were sent in by the dairy farms. The financial data were either entered into the spreadsheet on the farm or mailed in on paper copies of the spreadsheet.

The accounting methods follow the recommendations made by the Farm Financial Standards Council, 1997, Financial Guidelines for Agricultural Producers. All revenues and expenses were accrual adjusted. Cash receipts and expenses were therefore adjusted for changes in inventory, prepaid expenses, depreciation, accounts payable, and accounts receivable. Depreciation data were taken from tax records. Asset valuation was based on market values. Unpaid management was valued at $50,000 per farm. Gain or loss on sale of capital assets resulted when depreciation did not completely account for the gain or loss in the value of the asset during the year.

The bottom line of each dairy business is its net farm income. Net farm income is the return to the owner and unpaid family members for their labor, management, and equity in the business. It is the total income available for the owner's salary, new investments, taxes, and loan principal payments.

All submitted data were carefully scrutinized and checked for completeness. The cash flow statement reconciles the net cash flow resulting from the reported operating, investing, and financing activities with the reported available cash on the January 1 and December 31 balance sheets. The equity statement reconciles the changes in equity through reported retained capital and valuation with the calculated equity on the balance sheets. The reconciliation attempts typically result in unresolved imbalances. Both cash flow imbalance and equity imbalance had to be less than 10% for the business to be included in the summary results reported here.

Results

Financial data was collected from 263 dairy x year combinations between 1995 and 2001, but 234 of those were included in this summary. All dairies were located in Florida, Georgia, and Alabama. Data were collected from 20, 27, 44, 55, 26, 23, and 39 dairies in the seven years from 1995 through 2001, respectively. The average herd size was 1,527, 1,375, 1,280, 808, 1,063, 1,079, and 977 cows with 15,689, 15,774, 16,586, 16,963, 17,973, 17,778, and 17,170 pounds milk sold per cow for the years 1995 through 2001, respectively. Total revenue for the seven years were, in chronological order, $16.98, $20.24, $18.03, $19.40, $19.07, $18.16, and $20.00. Corresponding total expenses were $17.60, $18.51, $17.83, $17.42, $16.27, $17.08, and $17.75. Total revenue minus total expenses equals net farm income from operations, which averaged $(0.63), $1.73, $0.20, $1.98, $2.79, $ 1.07, and $2.25 per cwt. for 1995 though 2001, respectively. Net farm income for 1995 through 2001 averaged $0.26, $2.19, $1.27, $2.07, $2.91, $1.10, and $2.39, respectively.

Summary results are presented in Tables 1.1 through 5.5. Some definitions and calculation rules are as follows:

Asset turnover ratio = total revenues / average assets

Average assets = average of value of assets on January 1 and December 31

Average equity = average of value of equity on January 1 and December 31

Capital replacement and term debt repayment margin = NFIFO + depreciation + interest on term debt - net social security and income taxes - owner withdrawals - annual scheduled payments on term debt and capital leases

Cash flow coverage ratio = (cash revenues - cash expenses) / current liabilities

Current assets = assets that can be converted to cash within one year without interrupting the business

Current liabilities = liabilities due within one year

Current ratio = current assets / current liabilities

Debt to asset ratio = liabilities / assets

Debt to equity ratio = liabilities / equity

Depreciation expense ratio = depreciation / total revenue

Equity = assets - liabilities

Equity to asset ratio = equity / assets

FTE = full time equivalent worker, on average 54 hours per week

Interest expense ratio = interest paid / total revenue

Net farm income = NFIFO + gain or loss on sale of capital assets

NFIFO = net farm income from operations

NFIFO ratio = NFIFO / total revenue

Operating expense ratio = (total operating expenses - depreciation) / total revenue

Operating profit margin ratio = (NFIFO + interest paid - unpaid management) / total revenues

Rate of return on assets = (NFIFO + interest paid - unpaid management) / average assets

Rate of return on equity = (NFIFO - unpaid management) / average equity

Term debt and capital lease coverage ratio = (NFIFO + non dairy income + depreciation + interest paid on term debt - net social security and income taxes - owner withdrawals) / (annual scheduled payments on term debt and capital leases)

Working capital = current assets / current liabilities

The results in tables 2.1 through 5.5 are sorted in three groups with approximately the same number of farms per group based on the sorting criteria.

List of Tables

1.1. Average and standard deviation of business size and production efficiency by year.

1.2. Average and standard deviation of revenues by year.

1.3. Average and standard deviation of costs by year.

1.4. Average and standard deviation of financial performance by year.

1.5. Average and standard deviations of balance sheets by year.

2.1. Business size and production efficiency by average number of cows.

2.2. Revenues by average number of cows.

2.3. Costs by average number of cows.

2.4. Financial performance by average number of cows.

2.5. Balance sheet by average number of cows.

3.1. Business size and production efficiency by milk per cow.

3.2. Revenues by milk per cow.

3.3. Costs by milk per cow.

3.4. Financial performance by milk per cow.

3.5. Balance sheet by milk per cow.

4.1. Business size and production efficiency by net farm income from operations per cwt.

4.2. Revenues by net farm income from operations per cwt.

4.3. Costs by net farm income from operations per cwt.

4.4. Financial performance by net farm income from operations per cwt.

4.5. Balance sheet by net farm income from operations per cwt.

5.1. Business size and production efficiency by average dairy assets per cow.

5.2. Revenues by average dairy assets per cow.

5.3. Costs by average dairy assets per cow.

5.4. Financial performance by average dairy assets per cow.

5.5. Balance sheet by average dairy assets per cow.

Tables

Table 1.1. DBAP 1995-2001 Summary - Average and standard deviation of business size and production efficiency by year.

Category		1995	1996	1997	1998	1999	2000	2001
Number of farms		20	27	44	55	26	23	39
Business size
Number of cows	mean std1	1,527 2,420	1,375 1,683	1,280 2,127	808 759	1,063 880	1,079 899	977 980
Number of heifers	mean std1	822 1,667	734 1,120	724 1,317	424 596	589 792	615 747	477 693
Milk sold (million lbs)	mean std1	24.22 36.14	21.75 25.22	21.31 32.14	14.26 14.76	19.85 18.44	20.59 19.40	17.55 19.45
FTE workers	mean std1	29 40	26 33	23 34	16 19	21 23	20 17	19 19
Acres of pasture + cultivated land	mean std1	1,245 2,509	859 1,399	817 1,874	388 455	515 512	463 539	437 474
Production efficiency Milk sold / cow (lbs)	mean std1	15,689 3,420	15,774 2,973	16,586 3,228	16,963 3,489	17,973 3,101	17,778 3,702	17,170 2,837
Cows / FTE worker	mean std1	57.95 29.65	54.39 25.92	54.07 18.83	55.79 21.14	59.00 23.54	53.81 19.03	51.53 18.84
Milk sold / FTE worker (million lbs)	mean std1	0.88 0.41	0.82 0.29	0.88 0.28	0.92 0.31	1.03 0.35	0.96 0.37	0.88 0.35
Cull rate	mean std1	0.35 0.16	0.34 0.12	0.35 0.15	0.38 0.12	0.34 0.09	0.38 0.11	0.36 0.13
1Standard deviation.

Table 1.2. DBAP 1995-2001 Summary - Average and standard deviation of revenues by year.

Category		1995	1996	1997	1998	1999	2000	2001
Number of farms		20	27	44	55	26	23	39
Revenues (per cwt)
Milk sold ($)	mean std1	15.26 0.57	18.39 0.82	16.68 0.97	18.35 0.90	17.80 0.91	16.69 0.79	18.24 1.22
Raised, leased cow sales ($)	mean std1	0.89 0.93	1.09 1.31	0.66 0.74	0.47 0.70	0.53 0.59	0.61 0.79	0.56 0.78
Heifer sales ($)	mean std1	0.16 0.50	0.26 0.40	0.19 0.57	0.14 0.53	0.20 0.63	0.40 1.08	0.29 0.53
Gain on purchased livestock sales ($)	mean std1	0.00 0.00	(0.08) 0.51	0.10 0.96	(0.12) 0.77	(0.19) 0.54	(0.04) 0.63	(0.08) 0.99
Other revenues ($)	mean std1	0.66 0.87	0.59 0.78	0.40 1.11	0.55 0.78	0.72 0.92	0.50 0.62	0.99 1.05
Total revenues ($)	mean std1	16.98 1.27	20.24 1.73	18.03 1.81	19.40 1.35	19.07 1.53	18.16 1.76	20.00 2.26
1Standard deviation.

Table 1.3. DBAP 1995-2001 Summary - Average and standard deviation of costs by year.

Category		1995	1996	1997	1998	1999	2000	2001
Number of farms		20	27	44	55	26	23	39
Costs (per cwt)
Personnel ($)	mean std1	2.76 0.68	2.45 0.69	2.40 0.95	2.23 0.92	2.37 0.78	2.66 0.87	2.69 1.04
Purchased feed ($)	mean std1	7.61 1.23	8.80 1.29	8.41 1.61	7.69 1.44	7.04 1.32	6.94 1.74	7.32 1.61
Crops ($)	mean std1	0.24 0.40	0.31 0.39	0.28 0.39	0.32 0.42	0.31 0.38	0.27 0.42	0.48 0.89
Machinery ($)	mean std1	0.77 0.31	0.89 0.58	0.82 0.52	0.83 0.45	0.88 0.53	0.86 0.53	1.01 0.52
Livestock ($)	mean std1	2.00 1.00	2.25 1.26	2.31 1.49	1.56 0.66	1.53 0.77	1.69 0.92	1.64 0.88
Milk marketing ($)	mean std1	1.21 0.33	0.98 0.26	1.06 0.31	1.09 0.38	1.04 0.40	1.10 0.36	1.05 0.37
Buildings and land ($)	mean std1	0.45 0.39	0.50 0.30	0.53 0.28	0.65 0.42	0.61 0.47	0.63 0.64	0.64 0.49
Interest ($)	mean std1	0.69 0.56	0.75 0.43	0.69 0.53	0.70 0.54	0.55 0.31	0.65 0.43	0.61 0.53
Depreciation:
Livestock ($)	mean std1	0.00 0.00	0.00 0.02	0.07 0.22	0.87 0.77	0.70 0.60	0.88 0.76	0.67 0.69
Machinery ($)	mean std1	0.48 0.70	0.50 0.53	0.35 0.36	0.44 0.41	0.37 0.23	0.44 0.41	0.50 0.42
Buildings ($)	mean std1	0.53 1.24	0.43 0.85	0.15 0.19	0.20 0.26	0.13 0.12	0.22 0.18	0.24 0.33
Other expenses ($)	mean std1	0.85 0.47	0.65 0.39	0.76 0.38	0.84 0.45	0.74 0.37	0.74 0.32	0.90 0.47
Total expenses ($)	mean std1	17.60 2.68	18.51 2.08	17.83 2.11	17.42 2.19	16.27 1.58	17.08 2.49	17.75 2.01
Net farm income from operations ($)	mean std1	(0.63) 2.34	1.73 2.45	0.20 2.21	1.98 1.94	2.79 1.75	1.07 2.07	2.25 1.85
Gain on sale of capital assets ($)	mean std1	0.89 1.74	0.46 1.47	1.07 5.16	0.09 0.43	0.11 0.46	(0.04) 0.49	0.15 0.43
Net farm income ($)	mean std1	0.26 1.67	2.19 2.54	1.27 4.59	2.07 1.99	2.91 1.73	1.10 2.04	2.39 1.92
1Standard deviation.

Table 1.4. DBAP 1995-2001 Summary - Average and standard deviation of financial performance by year.

Category		1995	1996	1997	1998	1999	2000	2001
Number of farms		20	27	44	55	26	23	39
Liquidity
Current ratio	mean std1	2.08 2.36	2.34 3.01	8.20 40.82	159.12 919.97	12.97 25.64	2.02 2.29	2.34 3.43
Working capital	mean std1	(258,913) 1,287,444	31,219 706,000	(91,439) 546,903	140,989 400,112	312,030 555,198	(8,319) 632,552	185,321 536,348
Solvency
Debt to asset ratio	mean std1	0.23 0.22	0.43 0.27	0.43 0.34	0.41 0.29	0.41 0.27	0.36 0.20	0.32 0.21
Equity to asset ratio	mean std1	0.77 0.22	0.57 0.27	0.57 0.34	0.59 0.29	0.59 0.27	0.64 0.20	0.68 0.21
Debt to equity ratio	mean std1	0.47 0.64	5.31 18.98	0.87 5.56	(9.46) 79.54	1.94 4.04	0.74 0.64	0.72 1.18
Profitability
Rate of return on assets	mean std1	(0.03) 0.25	0.12 0.23	0.03 0.13	0.12 0.24	0.15 0.15	0.07 0.08	0.09 0.09
Rate of return on equity	mean std1	(0.08) 0.27	0.09 1.57	(0.10) 1.32	(1.76) 14.84	(1.24) 7.56	0.07 0.14	0.11 0.19
Operating profit margin ratio	mean std1	(0.05) 0.18	0.09 0.11	(0.02) 0.18	0.10 0.11	0.15 0.09	0.06 0.13	0.09 0.10
Financial efficiency
Asset turnover rate	mean std1	1.09 0.61	1.00 0.59	0.99 0.61	1.14 1.35	1.03 0.44	0.89 0.46	0.90 0.42
Operating expense ratio	mean std1	0.94 0.10	0.83 0.09	0.92 0.11	0.78 0.10	0.76 0.08	0.82 0.10	0.79 0.10
Depreciation expense ratio	mean std1	0.06 0.10	0.05 0.06	0.03 0.03	0.08 0.04	0.06 0.03	0.08 0.04	0.07 0.04
Interest expense ratio	mean std1	0.04 0.03	0.04 0.02	0.04 0.03	0.04 0.03	0.03 0.02	0.04 0.02	0.03 0.03
Net farm income ratio	mean std1	(0.04) 0.13	0.08 0.11	0.01 0.12	0.10 0.10	0.14 0.09	0.06 0.12	0.11 0.09
Repayment capacity
Cash flow coverage ratio	mean std1	0.42 1.14	1.23 2.92	10.91 69.86	132.24 820.96	10.48 20.75	4.24 8.71	3.08 6.73
Term debt coverage ratio2	mean std1	0.00 0.00	0.00 0.00	18.41 68.81	19.88 64.46	32.36 41.70	9.93 38.44	10.66 33.57
Capital replacement margin3	mean std1	(153,399) 862,181	291,830 491,115	(121,642) 543,483	204,627 638,405	416,446 727,686	145,544 578,631	386,201 635,232
1Standard deviation. 2Term debt and capital lease coverage ratio. 3Capital replacement and term debt repayment margin.

Table 1.5. DBAP 1995-2001 Summary - Average and standard deviations of balance sheets by year.

Category		1995	1996	1997	1998	1999	2000	2001
Number of farms		20	27	44	55	26	23	39
Balance sheet (January 1)
Current assets / cow ($)	mean std1	280 129	287 194	306 216	322 269	548 309	459 354	451 376
Total assets / cow ($)	mean std1	3,352 2,090	3,902 1,743	3,788 2,125	3,914 2,374	3,910 1,921	4,555 2,637	4,535 2,267
Current liabilities/cow ($)	mean std1	330 413	482 422	373 295	616 697	551 407	541 479	376 339
Total liabilities / cow	mean std1	961 955	1,510 886	1,545 1,395	1,523 1,049	1,459 946	1,383 790	1,305 833
Equity / cow ($)	mean std1	2,392 1,482	2,392 1,460	2,243 2,199	2,391 2,351	2,451 2,199	3,172 2,877	3,230 2,315
Balance sheet (December 31)
Current assets / cow ($)	mean std1	261 129	388 219	278 219	464 304	633 341	418 252	541 421
Total assets / cow ($)	mean std1	3,382 2,084	3,892 1,612	3,891 1,978	4,072 2,413	4,078 1,911	4,552 2,376	4,725 2,298
Current liabilities/cow ($)	mean std1	282 398	304 393	313 318	353 310	291 335	419 317	394 285
Total liabilities / cow ($)	mean std1	1,050 1,059	1,540 893	1,554 1,427	1,460 990	1,408 771	1,431 828	1,301 869
Equity / cow ($)	mean std1	2,331 1,305	2,352 1,456	2,338 2,066	2,613 2,444	2,670 2,207	3,121 2,379	3,425 2,358
1Standard deviation.

Table 2.1. DBAP 1995-2001 Summary - Business size and production efficiency by average number of cows.

Category	1995	1996	1997	1998	1999	2000	2001
Number of farms	20	27	44	55	26	23	39
Business size
Number of cows
Lowest third	288	383	222	219	356	251	201
Middle third	736	796	651	568	829	877	621
Highest third	3,820	2,946	3,059	1,649	2,062	2,167	2,108
Number of heifers
Lowest third	126	170	107	109	238	149	118
Middle third	355	505	358	320	443	432	309
Highest third	2,141	1,526	1,758	850	1,123	1,316	1,002
Milk sold (million lbs)
Lowest third	3.67	6.33	3.41	3.28	6.31	3.51	3.26
Middle third	12.42	13.00	11.33	10.27	15.33	17.21	11.04
Highest third	60.51	45.90	50.62	29.46	39.04	42.02	38.35
FTE workers
Lowest third	5	8	6	5	7	5	5
Middle third	16	15	13	11	18	18	13
Highest third	71	56	52	32	40	38	37
Acres of pasture + cultivated land
Lowest third	206	179	233	197	345	196	180
Middle third	581	559	426	316	482	305	304
Highest third	3,169	1,838	1,849	654	728	933	827
Production efficiency
Milk sold / cow (lbs)
Lowest third	12,598	15,573	14,916	15,091	17,503	14,025	16,144
Middle third	17,477	16,236	17,332	18,132	18,118	19,852	17,840
Highest third	16,394	15,513	17,404	17,602	18,262	18,865	17,525
Cows / FTE worker
Lowest third	75.54	43.61	45.32	50.02	57.43	49.31	41.29
Middle third	48.01	50.73	52.91	54.70	54.72	53.31	50.81
Highest third	53.61	67.23	64.16	62.71	65.90	58.94	62.48
Milk sold / FTE worker (million lbs)
Lowest third	0.99	0.64	0.67	0.73	0.98	0.69	0.66
Middle third	0.81	0.83	0.90	0.97	0.96	1.04	0.90
Highest third	0.85	0.97	1.07	1.06	1.16	1.12	1.09
Cull rate
Lowest third	0.42	0.33	0.29	0.36	0.31	0.42	0.41
Middle third	0.32	0.39	0.37	0.41	0.35	0.35	0.32
Highest third	0.33	0.29	0.39	0.38	0.36	0.38	0.34

Table 2.2. DBAP 1995-2001 Summary - Revenues by average number of cows.

Category	1995	1996	1997	1998	1999	2000	2001
Number of farms	20	27	44	55	26	23	39
Revenues (per cwt)
Milk sold ($)
Lowest third	15.52	18.16	16.07	18.16	17.29	16.78	17.71
Middle third	14.90	18.14	16.76	17.97	17.79	16.32	18.15
Highest third	15.49	18.86	17.21	18.94	18.31	17.07	18.87
Raised, leased cow sales ($)
Lowest third	1.10	1.03	0.78	0.43	0.69	1.16	0.50
Middle third	0.86	1.25	0.48	0.42	0.53	0.36	0.83
Highest third	0.73	0.98	0.75	0.57	0.36	0.39	0.36
Heifer sales ($)
Lowest third	0.15	0.31	0.25	0.26	0.11	0.66	0.24
Middle third	0.17	0.20	0.28	0.09	0.06	0.16	0.22
Highest third	0.17	0.27	0.04	0.09	0.47	0.45	0.41
Gain on purchased livestock sales ($)
Lowest third	0.00	(0.25)	0.37	0.10	0.14	(0.04)	0.23
Middle third	0.00	0.00	(0.09)	(0.15)	(0.23)	(0.04)	(0.28)
Highest third	0.00	0.00	0.04	(0.29)	(0.45)	(0.06)	(0.17)
Other revenues ($)
Lowest third	0.84	0.74	0.76	0.74	0.94	0.94	1.66
Middle third	0.87	0.77	0.09	0.57	0.52	0.26	0.74
Highest third	0.19	0.27	0.39	0.32	0.76	0.38	0.54
Total revenues ($)
Lowest third	17.61	19.99	18.23	19.69	19.17	19.50	20.34
Middle third	16.80	20.35	17.52	18.90	18.67	17.06	19.66
Highest third	16.58	20.39	18.42	19.63	19.45	18.23	20.01

Table 2.3. DBAP 1995-2001 Summary - Costs by average number of cows.

Category	1995	1996	1997	1998	1998	2000	2001
Number of farms	20	27	44	55	26	23	39
Costs (per cwt)
Personnel ($)
Lowest third	2.56	2.31	2.34	1.95	1.93	2.53	2.39
Middle third	2.85	2.46	2.46	2.26	2.65	2.81	2.87
Highest third	2.85	2.59	2.41	2.47	2.46	2.59	2.82
Purchased feed ($)
Lowest third	7.88	9.52	8.52	8.03	7.08	7.81	7.31
Middle third	7.60	8.75	8.06	7.51	6.89	6.49	7.47
Highest third	7.36	8.15	8.70	7.53	7.20	6.66	7.19
Crops ($)
Lowest third	0.16	0.25	0.30	0.32	0.35	0.42	0.90
Middle third	0.33	0.36	0.28	0.27	0.39	0.20	0.32
Highest third	0.19	0.34	0.26	0.37	0.16	0.22	0.21
Machinery ($)
Lowest third	0.73	0.83	0.94	0.85	0.93	1.07	1.27
Middle third	0.84	1.19	0.82	0.82	0.95	0.74	0.80
Highest third	0.73	0.63	0.70	0.84	0.74	0.81	0.94
Livestock ($)
Lowest third	1.83	2.11	2.35	1.39	1.23	1.67	1.48
Middle third	1.82	2.08	2.00	1.59	1.98	1.75	1.69
Highest third	2.39	2.56	2.62	1.69	1.27	1.64	1.75
Milk marketing ($)
Lowest third	1.35	0.99	1.14	1.24	0.97	1.31	1.06
Middle third	1.15	0.95	1.06	0.93	1.06	0.96	1.07
Highest third	1.15	1.00	1.00	1.11	1.10	1.07	1.01
Buildings and land ($)
Lowest third	0.49	0.40	0.62	0.66	0.93	0.98	0.59
Middle third	0.50	0.51	0.49	0.61	0.41	0.44	0.71
Highest third	0.36	0.59	0.49	0.69	0.56	0.53	0.60
Interest ($)
Lowest third	0.67	0.82	0.82	1.01	0.36	0.80	0.81
Middle third	0.90	0.71	0.65	0.55	0.62	0.54	0.56
Highest third	0.43	0.72	0.59	0.55	0.64	0.64	0.45
Depreciation:
- Livestock ($)
Lowest third	0.00	0.01	0.04	1.08	0.67	0.94	0.66
Middle third	0.00	0.00	0.13	0.69	0.50	0.69	0.54
Highest third	0.00	0.00	0.04	0.85	0.98	1.04	0.82
- Machinery ($)
Lowest third	0.78	0.54	0.39	0.64	0.37	0.60	0.64
Middle third	0.43	0.58	0.36	0.35	0.38	0.46	0.45
Highest third	0.25	0.39	0.31	0.35	0.35	0.27	0.41
- Buildings ($)
Lowest third	1.07	0.61	0.14	0.18	0.11	0.28	0.33
Middle third	0.33	0.32	0.10	0.27	0.10	0.16	0.19
Highest third	0.27	0.35	0.22	0.16	0.20	0.21	0.19
Other expenses ($)
Lowest third	1.02	0.58	0.98	1.10	0.97	0.69	1.03
Middle third	0.83	0.72	0.72	0.74	0.56	0.69	0.87
Highest third	0.71	0.64	0.58	0.69	0.72	0.86	0.86
Total expenses ($)
Lowest third	18.54	18.97	18.56	18.44	15.90	19.10	18.47
Middle third	17.59	18.62	17.12	16.59	16.48	15.93	17.54
Highest third	16.68	17.95	17.92	17.28	16.37	16.54	17.25
Net farm income from operations ($)
Lowest third	(0.94)	1.02	(0.33)	1.25	3.27	0.39	1.86
Middle third	(0.79)	1.73	0.39	2.31	2.19	1.12	2.11
Highest third	(0.10)	2.44	0.50	2.35	3.08	1.69	2.76
Gain on sale of capital assets ($)
Lowest third	1.36	0.48	2.73	0.09	0.04	0.23	0.02
Middle third	0.63	0.29	0.32	0.08	0.10	(0.21)	0.19
Highest third	0.75	0.60	0.27	0.10	0.19	(0.09)	0.23
Net farm income ($)
Lowest third	0.43	1.50	2.40	1.35	3.31	0.69	1.88
Middle third	(0.16)	2.02	0.71	2.39	2.29	0.99	2.31
Highest third	0.66	3.04	0.77	2.45	3.27	1.64	2.99

Table 2.4. DBAP 1995-2001 Summary - Financial performance by average number of cows.

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Category	1995	1996	1997	1998	1999	2000	2001
Number of farms	20	27	44	55	26	23	39
Liquidity
Current ratio
Lowest third	0.59	2.05	1.03	0.94	14.61	1.20	2.70
Middle third	2.77	1.72	24.19	525.19	12.61	2.79	2.19
Highest third	2.00	3.00	2.29	3.45	12.18	1.87	1.59
Working capital
Lowest third	(18,801)	75,549	(14,434)	(14,981)	162,878	(42,456)	31,707
Middle third	94,364	51,275	(21,152)	109,797	227,389	59,076	55,775
Highest third	(970,060)	(33,165)	(248,772)	329,884	566,984	(60,834)	468,480
Solvency
Debt to asset ratio
Lowest third	0.33	0.38	0.49	0.49	0.30	0.36	0.32
Middle third	0.16	0.46	0.36	0.37	0.41	0.33	0.34
Highest third	0.23	0.45	0.46	0.36	0.52	0.40	0.29
Equity to asset ratio
Lowest third	0.67	0.62	0.51	0.51	0.70	0.64	0.68
Middle third	0.84	0.54	0.64	0.63	0.59	0.67	0.66
Highest third	0.77	0.55	0.54	0.64	0.48	0.60	0.71
Debt to equity ratio
Lowest third	0.89	0.67	0.75	1.41	1.64	0.72	0.67
Middle third	0.24	(0.41)	1.49	1.44	2.64	0.65	1.00
Highest third	0.34	15.68	0.29	(31.84)	1.37	0.89	0.49
Profitability
Rate of return on assets
Lowest third	(0.18)	0.04	(0.03)	0.02	0.11	0.03	0.03
Middle third	0.03	0.17	0.08	0.12	0.12	0.06	0.10
Highest third	0.02	0.15	0.05	0.22	0.24	0.11	0.15
Rate of return on equity
Lowest third	(0.22)	0.01	(0.09)	(6.10)	(4.68)	0.02	0.00
Middle third	(0.03)	0.72	(0.24)	(0.09)	0.06	0.06	0.10
Highest third	(0.00)	(0.45)	0.07	0.81	0.56	0.12	0.22
Operating profit margin ratio
Lowest third	(0.15)	0.03	(0.13)	0.02	0.14	(0.04)	0.02
Middle third	(0.02)	0.09	0.03	0.12	0.12	0.08	0.11
Highest third	0.01	0.15	0.05	0.14	0.18	0.12	0.15
Financial efficiency
Asset turnover rate
Lowest third	0.99	0.94	0.87	0.87	0.81	0.86	0.67
Middle third	1.16	1.00	1.14	1.03	1.05	0.90	0.95
Highest third	1.11	1.06	0.96	1.51	1.22	0.92	1.06
Operating expense ratio
Lowest third	0.92	0.85	0.95	0.79	0.75	0.85	0.79
Middle third	0.95	0.85	0.91	0.78	0.80	0.83	0.81
Highest third	0.95	0.81	0.91