Jeremy Doetch, Ag Lender with German American State Bank in Illinois, visits with Chris on the financial fundamentals necessary for navigating 2023 and beyond. The conversation begins with a brief discussion on the importance of having a current succession and transition plan, that’s updated regularly. The balance of the conversation revolves around many specific financial considerations as you communicate with your lender, build your financial documentation, and utilize this information for the most accurate and dependable decision making. Jeremy points out what he views as some of the most important data to provide your lender during loan renewals and for accurate analysis of your financial condition. 

1. Accrual adjusted market value balance sheet. 

2. Detailed income statement. 

3. Detailed cash flow from prior year and projections for the upcoming year. 

4. Operating plan that includes crop rotations and detailed production planning. 

5. Operating plan that includes specific marketing strategies. 

6.Capital plan which includes purchases, replacements, and sales. 

They go on to discuss need for additional financial analysis depending on the growth strategy, size of operation, repayment capacity, working, capital, and the ability to manage and navigate risk. Finally, they discuss numerous ratios, but list three of the most important. 

1. Debt service coverage ratio. 

2. Working capital ratio. 

3. Debt to asset ratio.