Using profit to manage volatile business performance

Cover of Profit Allocation fact sheetUsing profit to manage volatile business performance Fact Sheet

Building financial reserves and equity in good years, to provide buffering against the the impact of low income years, are keys to financial success in today's high-cost farming systems. What can you do during years of favourable returns to influence business performance during periods of low returns?

Key points

Appropriate use of profits in good years plays a key role in overall financial success of your business.

Convert profits into increased equity by investing profits into financial buffers, debt reduction or capital for business growth.

Using equity for growth as a financial buffer against future losses allows your business to survive and ride out the down times.

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GRDC Project Code ORM00011

Region South