Profit

This page shows a breakdown of Area, Total Income, Total Variable Costs and Total Gross Margin for cane and any other crops entered into FEAT. Furthermore, Fixed Costs are subtracted and Other Income added to the Total Gross Margin in order to calculate the Farm Operating Return. The Return on Investment (%) is also calculated by dividing Total Assets (from Assets page) by the Operating Return.

Farm Operating Return

Farm operating return, calculated as gross income less total costs (excluding interest and tax), is a good measure of profitability to compare two farming systems with different fixed costs and capital expenditure (i.e. comparing one farming system with irrigation to another farming system without irrigation).

Return on Investment

Return on Investment (ROI) measures how effectively farm assets are working to generate profit and calculated as Operating Return divided by Total Assets. ROI is a useful measure to compare two farming systems with different assets (i.e. comparing one farming system with old machinery to another farming system with new machinery).

When evaluating management practice changes, it is important to evaluate cash flow implications and determine whether the business has sufficient cash flow to cover the changes. Completing a Cash Flow budget in FEAT will provide a forecast of any deficits and surpluses in cash throughout the year so that a plan can be enacted to ensure bills and loan repayments are paid on time.