KADUNA STATE UNIVERSITY

FACULTY OF AGRICULTURE
DEPARTMENT OF AGRICULTURAL ECONOMICS AND EXTENSION

COURSE TITLE: AGRICULTURAL ENTREPRENUERSHIP

COURSE CODE: AEE 301

GROUP 14
NAME MATRIC NO.
PAMELA ZANGWAN CLEMENT KASU/20/AGR/1043
JOLLY NANGEONIYETBANI KASU/20/AGR/1044

ASSIGNMENT

Using a balance sheet of any organization and explain the meaning of each of the
following estimates

1. Current ratio
2. Net capital ratio
3. Debt structure ratio
4. Debt to equity ratio

8th February, 2024

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1. Current ratio: current ratio is defined as assets that are cash or will be turned
into cash in a year or less. It compares all of a company current assets to its
current liabilities.
current assets
current ratio
current liabilities

 Current assets are assets that will be used up or sold within the next
year as part of normal business activities
 Current liabilities are financial obligations that will become due and
payable within one year from date of balance sheet and will cash be
available in these assets within next year.
2. Net capital ratio: This is the net around of all element of current ratio. It
reveals if a business has sufficient amount of net funds available in the short
term to stay in operations. It is useful to creditors and lenders.

Total assets
Net Capital Ratio
Total liabilities

3. Debt Structure ratio: This shows what proportion current liabilities are to
total liabilities and it can be converted to percentage

Current liabilities
DSR
Total liabilities

4. Debt to Equity Ratio: Also called leverage ratio shows how much debt a
company has compared to its assets

Total liabilities
DTER=
Total equity

Equity = Total farm Asset –Total Farm Liability

5.

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 MISISSIPI STATE UNIVERSITY EXTENSION SERVICE

5th April, 2021

CURRENT ASSETS CURRENT LIABILITIES

Cash $52, 208 Account payable
Accounts Receivable Crop $0
Crops $10, 500 Livestock $6,578
Livestock $0 Income taxes payable $13, 705
Inventories Notes payable due $95, 570
Crops $88,750 With 12 months
Feed $32,825 Accrued interest
Livestock $51,750 Notes due within 12 $3,385
months
Supplies $2,548 Non-current loans $24,941
Growing crops Finance leases $2,162
Cash investment $35, 400 Current portion and principal
Prepaid expenses $45,000 Due on
Other current asset $19,000 Term Debt $57,816
Finance leases $14,215
Total current assets $337,981 Other current liabilities $ 0
Non-Current assets
Machinery & $728,000
equipment
Breeding livestock $298,100 Total current liabilities $218,372
Right-of-use Assets Non-current liabilities
Finance leases $44,921 Non portion of Principle due
Investment in Notes payable $66,257
Cooperatives $27,763 Real Estate Debt $501,868
Real estate $2,480,000 Finance leases $30,706
Building & $207,825 Non-current deffered $231,650
improvement
Income tax
Estimated income tax $495,545
due to valuation
Other non-current $0
liabilities
Total non-current $3,786,609 Total non-current $1,290,026
Asset liabilities

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 Total farm liabilities $1,508,398
Total farm equity $2,616,192
Total farm asset $4,129,590 Total farm $4,124,590
liabilities+equity

current asets
1. Current ratio = current liabilities

337,981
Current ratio = 218,372 = 1.55

total assets
2. Net capital ratio = total liability

4,124,590
Net capital ratio = 1,508,398 =¿ 2.73

current liabilities
3. Debt structure ratio = total liabilities

218,372
= 1,508,398 = 0.145

total liability
4. Debt to equity ratio = total equity

1,508,398
= 2,616,192 = 0.061

1. 1.55 means the company's assets are more compared to it liabilities

2. The figure 2.73 shows that the company doesn't have enough funds to stay in
short termed operations

3. 0.145 shows that current liabilities are not much compared to total liabilities

4. With the figure 0.061 shows that the company has enough assets to it's dept

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 References

Alabi O.O, Dr. Coker & Dr. Adebayo O.O (2016). Agricultural Project Appraisal and
Financial Management. Chapter Eleven, Page 145-151

Caleb S., Dylan Z., Megan L., Alexandra K., & Micahel(2019). Financial Term A-Z
investopedia.https//:www.investopedia.com/financialterm-
dictionary4769733

Farm Financial Analysis serves: Balance Sheet (nd)Misissippi State University

Extension Service.(published 5th of April, 2021)
http://extension.msstateedu/publicationsifarm-financial-analysis-series-
balance-sheet