Financial benchmarks for expansion

 Resize text         Printer-friendly version of this article Printer-friendly version of this article
By the third year of an expansion project, your cash debt repayment capacity should be at 130 or more.

That’s one of the thumb-rules that Steve Bodart used while serving as a dairy business specialist for Land O’Lakes. After more than 12 years in that role, Bodart recently went to work as manager in charge of finance and personnel management at a 1,100-cow dairy in Emerald, Wis.

Cash debt repayment capacity refers to how much money is left over, after farm operating expenses and family living expenses, to pay down long-term debt, including principal and interest. A repayment capacity of 130 means there is $1.30 available to pay each $1 of debt service during the year.

Comments (0) Leave a comment 

e-Mail (required)


characters left

644K Hybrid Wheel Loader

The 229 hp 644K Hybrid Wheel Loader from John Deere utilizes two sources of energy: diesel and electric. The machine’s ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight