10/6/2024 6:44:44 PM	AGBUS 105 Course Outline as of Summer 2017	Reinstated Course
CATALOG INFORMATION
Discipline and Nbr:  AGBUS 105	Title:  AGRICULTURE FINANCE
Full Title:  Agricultural Finance
Last Reviewed:2/14/2022

Units		Course Hours per Week			Nbr of Weeks	Course Hours Total
Maximum	3.00	Lecture Scheduled	3.00		17.5 max.	Lecture Scheduled	52.50
Minimum	3.00	Lab Scheduled	0		6 min.	Lab Scheduled	0
		Contact DHR	0			Contact DHR	0
		Contact Total	3.00			Contact Total	52.50
		Non-contact DHR	0			Non-contact DHR Total	0

Total Out of Class Hours:  105.00

Total Student Learning Hours: 157.50

Title 5 Category:  AA Degree Applicable
Grading:  Grade Only
Repeatability:  00 - Two Repeats if Grade was D, F, NC, or NP
Also Listed As: 
Formerly:  AGBUS 72

Catalog Description:

This course involves the study of basic financial concepts, agricultural lending, financial institutions, financial and investment analysis. In addition, this course examines financial risk, risk management, legal aspects of agricultural finance, and the principles and practices for financing different forms of legal business organizations in agriculture.

Prerequisites/Corequisites:

Recommended Preparation:
Eligibility for ENGL 100 or ESL 100; AND MATH 151

Limits on Enrollment:

Schedule of Classes Information
Description:

This course involves the study of basic financial concepts, agricultural lending, financial institutions, financial and investment analysis. In addition, this course examines financial risk, risk management, legal aspects of agricultural finance, and the principles and practices for financing different forms of legal business organizations in agriculture.

(Grade Only)
Prerequisites:
Recommended:Eligibility for ENGL 100 or ESL 100; AND MATH 151
Limits on Enrollment:
Transfer Credit:
Repeatability:00 - Two Repeats if Grade was D, F, NC, or NP

ARTICULATION, MAJOR, and CERTIFICATION INFORMATION

Associate Degree:		Effective:		Inactive:
Area:
CSU GE:	Transfer Area			Effective:	Inactive:
IGETC:	Transfer Area			Effective:	Inactive:
CSU Transfer:		Effective:		Inactive:
UC Transfer:		Effective:		Inactive:
C-ID:

Certificate/Major Applicable: Both Certificate and Major Applicable

COURSE CONTENT

Student Learning Outcomes:
At the conclusion of this course, the student should be able to:

1.  Explain the importance and sources of finance in agribusiness

2.  Analyze financial risk and identify appropriate financial options for businesses

3.  Apply capital budgeting techniques in financial decision making

4.  Evaluate an agribusiness organization and identify appropriate legal documents required for

    financing

Objectives:

Upon completion of this course, students will be able to:

1. Explain the importance of finance in agribusiness

2. Identify the different types of financial statements and their functions

3. Discuss the functions of lending institutions in agribusiness

4. Describe the types of debt and their cost benefit analysis in agribusiness

5. Demonstrate knowledge of financial analysis

6. Demonstrate understanding of capital budgeting methods

7. Explain sources of risk and risk management in agricultural finance

8. Demonstrate knowledge of investment analysis

9. Describe basic legal documents used in agricultural finance

10. Explain how financing guidelines are applied in agribusiness

Topics and Scope

I. Introduction to Agribusiness Finance                  

    A. Agribusiness finance            

    B. Agribusiness producers            

    C. Importance of finance in agribusiness            

    D. Domestic trends in agribusiness finance            

II. Financial Understanding of Accounting Concepts                  

    A. Understanding balance sheets            

    B. Measuring income            

    C. Comparing cash and accrual accounting            

    D. Statements            

         1. Cash flow      

         2. Profit and Loss      

         3. Owner's equity      

    E. Common Issues in agricultural finance            

III. Agricultural Lending                  

    A. Interaction between lenders and borrowers            

    B. Commercial banks            

    C. Farm credit system            

    D. Life insurance financing            

    E. Farm Service Agency             

     F. Federal Agricultural Mortgage Corporation            

    G. Debt Choice            

         1. Types of debt      

         2. Cost and benefits of debts      

IV. Investment Analysis                  

    A. Return of owner's equity            

    B. The DuPont identity of return on equity            

    C. Asset management ratios            

    D. Financial efficiency ratios (profitability, solvency, liquidity, repayment, loan-to-value)            

    E. Common Size financial statements            

V. Capital Budgeting                  

    A. Time value of money            

         1. Compound interest            

         2. Annuities            

         3. Basic loan calculations            

         4. Determining Annual Percentage Rate (APR)            

         5. Refinancing analysis            

         6. Cash budgeting            

    B. Net present value            

    C. Income taxes and capital budgeting            

    D. Leases and leasing            

VI. Risk in Agribusiness                  

    A. Financial and business risk            

    B. Sources of business risk in agriculture            

    C. Attitudes toward risk            

    D. Market valuation of risk                  

    E. Risk management in agribusiness            

VII. Legal Aspects of Agricultural Finance                  

    A. Contracts            

    B. Promissory notes            

    C. Security agreement            

    D. Mortgages versus deeds of trust            

    E. Life cycle of loans            

    F. Loans defaults and foreclosures            

    G. Determinants of interest rates            

VIII. Financing Business Organizations in Agriculture                  

    A. Types of legal business organizations            

    B. Business Organizations and Financing models                  

    C. Business organizations and equity generation            

    D. Business types and the transfer of capital            

    E. Estate management and tax implications

Assignments:

1. Case Studies (8-10)

2. Problem sets (weekly)

3. Two 3 - 5 page Term papers on Agricultural finance policies and trends

4. One to two reports 4 - 6 pages long on Investment and Lending for a specific sector in agriculture

5. Quizzes (4) and exams (3)

6. Final Exam

Methods of Evaluation/Basis of Grade.

Writing: Assessment tools that demonstrate writing skill and/or require students to select, organize and explain ideas in writing.		Writing 15 - 35%
Term papers, case studies, reports
Problem solving: Assessment tools, other than exams, that demonstrate competence in computational or non-computational problem solving skills.		Problem Solving 15 - 25%
Problem sets
Skill Demonstrations: All skill-based and physical demonstrations used for assessment purposes including skill performance exams.		Skill Demonstrations 0 - 0%
None
Exams: All forms of formal testing, other than skill performance exams.		Exams 50 - 70%
Quizzes and exams
Other: Includes any assessment tools that do not logically fit into the above categories.		Other Category 0 - 0%
None

Representative Textbooks and Materials:

Financial Management in Agriculture. 7th ed. Barry, Peter and Ellinger, Paul. Pearson. 2011 (classic)

Fundamental of Agribusiness Finance. Battles, Ralph and Thompson, Robert. Wiley-Blackwell (classic)

Farm Financial Standards Council. Financial Guidelines for Agricultural Producers (Annual Report)

Instructor prepared materials

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