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Managing Risks and Profits - Module 3: Financial Considerations in Managing Risks and Profits

Summary

In the short run, though, simply meeting all cash flow commitments on time becomes the principal financial concern for most producers. Cash receipts from product sales and farm program payments are the primary sources of income for paying input bills, making loan payments, replacing depreciable assets, and meeting family living expenses and tax payments. If your cash receipts fall short of covering these anticipated expenditures, then you have to utilize other sources of cash such as savings, operating loans, outside income, or sales of assets.