This article throws light upon the top four economic principles applied to farm management. The economic principles are: 1. The Law of Diminishing Marginal Returns 2. The Law of Equi-Marginal Returns 3. Law of Opportunity Cost 4. Law of Comparative Advantage. Economic Principle # 1. The Law of Diminishing Marginal Returns: Since agriculture is a productive activity we should be [...]
This article throws light upon the three main types of cash book that can be maintained in a farm business. The types are: 1. Cash Book with Cash and Discount Columns 2. Cash Book with Cash and Bank Columns 3. A Cash Book with Bank and Discount Column 4. Petty Cash Book. 1. Cash Book with Cash and Discount Columns: [...]
This article throws light upon the three financial test ratios used to find out the state of profitability in the farm business. The financial test ratios are: 1. Cost Ratios 2. Capital Ratios 3. Income Ratios. 1. Cost Ratios: These show the relationship between costs and returns. Cost ratios are averages and their magnitude reflecting physical production efficiency, selection of [...]