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KayDee Gilkey Working Capital Trends
by KayDee Gilkey, click here for bio

Program: Farm and Ranch Report
Date: February 14, 2017

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Working capital is always king and while commodity prices remain in a slump —-

CliftonAllenLarson principle and Farm CPA Today blogger Paul Neiffer shares some trends he sees in farmers’ working capital.

Neiffer: “The trends in working capital —as I think everyone would expect — have been negative. I’ve done several analysis with farmers over the few months and we’ve seen working capital go from — lets say for a typical farmer in some operations maybe its gone from $750,000 down to $250,000. But I also see farmers correcting that by going out and refinancing their equipment. A lot of farmers bought equipment for cash when times were good and that really sucked working capital into that equipment. Now they are refinancing that and bringing that cash into working capital — so we are seeing a positive trend there. Another thing I’ve seen with several of our farmers is since they are having net operating losses this years from farming. We are actually carrying those back five years or four years — because farm net losses can be carried back five years. So we are going back four years or five years and picking up taxes that were paid then and we get that income tax refund and that goes back into the farming operation as additional working capital. So those are some of the trends we are seeing in that arena.”

Farm CPA Today is one of my favorite informative blogs, if you haven’t yet visited it, go to Farm CPA today.com.

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