1. Financial record keeping

2. Assets • Current Assets • Items that are tangible and can quickly be converted to cash or that will be sold within12 months Examples are … cash on hand, checking and savings accounts, stocks, money others owe you, current non-depreciable inventory, livestock, crops and feed • Non – Current Assets (Long term) • Items that have a useful life of more than one year and are used in the business – • Examples… non-current , non depreciable inventory, land

3. Intermediate Assets – depreciable inventory • Examples .. Machinery, equipment , breeding livestock, cash value of insurance, personal vehicles, household goods

4. Liabilities • Current Liabilities – accounts and notes payable, this year’s part of non-current liabilities • Non – current liabilities – mortgages and other debts not due this year Total liabilities = current liabilities (debts) + non – current liabilities (debts)

5. Net Worth or owner’s Equity = total assets minus total liabilities • Debt-to-Equity Ratio = total liabilities /net worth