FINPACK Knowledge Base
FINPACK Knowledge Base: General
How to Approach Credit Analysis in FINPACK
This step-by-step guide to approaching credit analysis in FINPACK covers data sources, financial analysis tools, projections and credit analysis, providing a broad overview of the many tools FINPACK offers and giving guidance on how to choose the best tool to fit your credit culture.
Importing Data from Another FINPACK File
FINPACK allows users to import data from a different FINPACK data file into their current file. This feature allows the receiving file to add or import new data, without overwriting the remaining contents of the file.
Importing Data into FINPACK+ Credit Analysis Files
New data, from an external FINPACK Credit Analysis file can be imported into your institution’s FINPACK+ Credit Analysis file for a customer. This feature allows you to add information, like a balance sheet or cash flow projection, into existing Credit Analysis file, without overwriting the remaining contents of the file.
Consolidating Data Sources in FINPACK+
FINPACK Credit Analysis allows users to consolidate the balance sheets or tax forms from several different data files into a consolidated file.
Understanding Cross-Collateralization in FINPACK
In complex agricultural or commercial lending, a single asset often secures multiple loans across different collateral analysis groups.
Balance Sheets
Handling Fluctuating Values of Ag Co-op Stock
“What is the proper way to handle Ag Co-op stock in a balance sheet in which the stock changes in value from year-to-year?”
Importing and Exporting Balance Sheet Detail
A helpful guide on the process of working with Intermediate, Long Term, and Personal Assets of an Agricultural balance sheet and Noncurrent and Personal Assets of a Commercial balance sheet.
Entering Finance Leases in FINPACK
When should a lease be recorded on the balance sheet? If a lease is included on the balance sheet, how do you determine the asset value and loan balance? These are frequent questions as the use of leases for machinery, buildings, and other assets become more common.
Consolidating Balance Sheets
FINPACK allows users to consolidate the balance sheets or tax forms from several different data files into a consolidated file.
Financial Analysis
Detail is your friend in FINPACK’s Enterprise Analysis
This document provides a short list of areas where it is important to enter detail in FINAN to aid in completing the Crop and Livestock Enterprise Analysis.
Treatment of Breeding Livestock in FINPACK’s Earned Net Worth Analysis
The purpose of Earned Net Worth Analysis is to back out Change in Market Valuation from total market value net worth change to arrive at the amount of net worth change resulting from earnings.
How Schedule F Income Is Used in FINPACK
FINPACK uses IRS Schedule F data in two analysis tools: 1) it is used to generate an accrual adjusted income statement in the Schedule F Cash to Accrual tool; 2) it can be used to calculate the cash based debt coverage measure that appears at the bottom of the Schedule F data entry in Tax Forms.
Discrepancies Caused by CCC Loans in Sched F Cash to Accrual
Tax preparers are not consistent in reporting repayment of CCC loans that have previously been reported as income for tax purposes. FINPACK tries to adjust for these inconsistencies but adjustments are not always possible.
Projections
FINPACK Labor Hour Estimates
FINFLO calculates Cost of Production Estimates for crop and livestock enterprises. These calculations rely on labor hours in the budgets. This document summarizes labor hours for several crop and livestock enterprises from FINBIN which can be used in the budgets.
Minnesota Price & Cost Summary
These prices and costs are suggested as guides for planning based on historical cost and returns for Minnesota farms included in the FINBIN Farm Financial Database.
Cash Flow Management for Financial Stability: Profitability, Debt Service, and Projections
Cash flow is a critical component of a business’s financial health and performance, yet it is often confused with profitability.
Discrepancies
Sleuthing Cash Discrepancies
There are often tricky situations where a year end analysis will not balance when it comes to cash in and cash out. Whether you are using the Schedule F Cash to Accrual Analysis or the Financial Analysis (FINAN) there are some common culprits to track down cash discrepancies.
Cash Discrepancy Triggers
Doing a thorough, accurate evaluation of a customer’s past performance is key to feeling confident when evaluating credit requests. Oftentimes in agriculture, the customer data received to perform this analysis is incomplete. Therefore, cash discrepancy errors can leave you scratching your head when completing a financial analysis (FINAN) or Schedule F cash to accrual analysis. Either missing sources or uses of cash may be a cash discrepancy culprit in an analysis. This missing cash can lead to either positive or negative cash discrepancies. Here we will look at potential culprits for both positive and negative cash discrepancies.
Other Resources
Farm Finance Scorecard
The Farm Financial Scorecard is an easy to use and highly informative resource for benchmarking a farm’s financial metrics against industry standards.
Tax Impact on Debt Coverage (agriculture files)
This paper discusses how to handle income taxes payable so the calculation for term debt coverage includes accrual income taxes rather than income taxes paid.