Is your farm making enough money? Read this book to find out. It is a guide one of our leading commercial farmers insists every one of his employees first read before he takes them into service. That is how important Turning Vision Into Value by Mike Ward and Allan Price is regarded by some.
Ward is director of the Graduate School of Management at the Gordon Institute of Business Science (GIBS), whereas Price, a former architect, has dedicated his life to simplifying finances for ordinary people.
The book explains financial and accounting principles to people who have no prior knowledge of the subject. The central themes are how to create economic value and how to measure it in business-like farming.
The core accounting principles explained include the measures of economic value. A lot is also said about return on net assets (RONA) and return on equity (ROE). It explains why these two measures are important and the underlying levers that drive them.
These different ways of measuring performance are then extended to the concept of sustainable growth. Because growth is so important when creating value, a lot of time is given to understanding the consequences of too much or too little growth in a business.
The final section of the book uses the earlier chapters to explain corporate valuation and covers economic concepts like the time value of money, discounting and the cost of capital.
The book is available at Van Schaik bookstores, or you can download a PDF copy from the internet. It’s a decision that could save you quite a bit of money, and also make you some!