Measuring & Analyzing Farm Financial Performance

by Michael Langemeier

This spreadsheet uses Schedule F information (net cash income or net cash profit), and beginning and ending balance sheets to compute accrual net farm income, and key financial ratios and repayment capacity measures.

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RELATED RESOURCES

2026 Trends in Farmland Price to Rent Ratios in Indiana

September 9, 2026

Indiana farmland values remain elevated relative to the cash rent they generate. Purdue agricultural economist Michael Langemeier examines what the farmland price-to-rent ratio can tell us about land values, future returns and the risks facing buyers.

Comparison of Long-Run Rates of Return for Crop and Livestock Farms

August 13, 2026

Have crop farms or livestock farms generated better long-run returns? Michael Langemeier compares rates of return for beef, dairy, diversified, and crop farms from 2007–2025, revealing why recent livestock price strength hasn’t translated into a clear long-run advantage.

Impact of Leverage on Rates of Return of Crop Farms

July 24, 2026

Increasing financial leverage will increase expected returns as long the marginal returns from the use of loans exceed the cost of borrowing. In favorable economic times, higher leverage can improve financial performance and stimulate farm growth. However, in unfavorable economic times, leverage can cause business performance to deteriorate rapidly. Thus, higher leverage may increase expected returns and financial risk.

UPCOMING EVENTS

Weathering Water Extremes: Connecting Soil Health, Drainage, Irrigation, and Farm Resilience

Join educators from across the Midwest to build skills for communicating soil health concepts on Nov. 4-5, 2026. In the field, we’ll evaluate the relationship between soil health and water management focusing on irrigation and edge of field practices. The in-service will have both classroom and on farm demonstrations.

Land of Opportunity: A Conference for Farmland Owners!

The Land of Opportunity: A Conference for Farmland Owners will be held at two locations on October 5 and October 6, providing farmland owners with valuable information and resources to help them make informed decisions about their land. The conference will feature keynote presentations, educational breakout sessions, and networking opportunities designed specifically for those who own, manage, or have an interest in farmland.