SIMPLIFIED DU PONT FINANCIAL ANALYSIS MODEL: MARKET BASIS

Return on average farm equity (ROE) 5.5%

Return on average farm assets (ROA) 6.8%

plus

Spread between ROA and COL -1.0%

multiplied by

Average debt/equity ratio 1.25

Return on average farm assets (ROA) 6.8%

minus

Average cost of liabilities (COL) 7.8%

Average debt/equity ratio 1.25

Operating profit margin 15.7%

multiplied by

Asset turnover ratio 43.1%

Average farm equity, market $800,000

divided into

NFIFO - Withdrawals + Interest expense $122,000 $776,000 $499,000 $95,000 $78,000 $104,000 $60,000 $44,000 $300,000 $1,500,000 $1,200,000 $200,000 $800,000

divided by

Gross revenue $776,000

divided by

Average farm assets, market $1,800,000

less

Average farm liabilities $1,000,000

Gross revenue Operating expense Depreciation expense Interest expense = Net farm income from operations (NFIFO) + Withdrawals as unpaid labor = Return to operator capital* Average current farm assets** Average noncurrent farm assets, market Average noncurrent farm assets, book Average current farm liabilities** Average noncurrent farm liabilities = = = + = $1,800,000 6.8% $122,000 $78,000 $44,000 $800,000 5.5% $44,000 $60,000 $104,000

Liquidity ratios Current ratio Working capital Solvency ratios Debt/asset ratio, market Debt/asset ratio, book Equity/asset ratio, market Equity/asset ratio, book Debt/equity ratio, market Debt/equity ratio, book

1.50 $100,000

53.3% 66.7% 46.7% 33.3% 1.14 2.00

Average farm assets, market Return on average farm assets Return to average farm assets Less interest expense Return to operator capital* Average farm equity, market Return on average farm equity Return to operator capital* Withdrawals as unpaid labor Return to operator***

Operational efficiency ratios Operating expense ratio 64.3% Depreciation expense ratio 12.2% Interest expense ratio 10.1% NFIFO ratio 13.4%

*Return to average farm equity before income taxes and nonrecurring gains/losses on sale of capital assets. **Optional data necessary for liquidity analysis. ***Return to average farm equity and labor/management before income taxes and nonrecurring gains/losses on sale of capital assets.

Copyright 1993-05

3/9/2012

DETAILED DU PONT FINANCIAL ANALYSIS MODEL: Rolling Acres, Book Basis

Return on average farm equity 3.2%

Return on average farm assets (ROA) 5.1%

plus

Spread between ROA and COL -1.2%

multiplied by

Average debt/equity ratio 1.52

Return on average farm assets (ROA) 5.1%

subtracted by

Average cost of liabilities (COL) 6.3%

Operating profit margin 15.9%

multiplied by

Asset turnover ratio 0.32

Average debt/equity ratio 1.52

NFIFO - Withdrawals + Interest expense $105,100

divided by

Gross revenue $661,782

divided by

Average farm assets $2,076,420

Average farm equity $822,397

divided into

Average farm liabilities $1,254,023

Income Statement $/Bushel Crop Bushels 1 122,880 2.45 2 35,488 5.25 3 43,225 2.75 Livestock Head Weight $/Cwt 1 2 3 Other revenue Gross revenues Operating expenses Depreciation expense Interest expense Net farm income from operations (NFIFO) Withdrawals as unpaid labor Other withdrawals (net of nonfarm income) Operational efficiency ratios Operating expenses/Gross revenues Depreciation expense/Gross revenues Interest expense/Gross revenues Net farm income from operations/Gross revenues

Revenue 301,056 186,312 118,869 55,545 661,782 393,316 118,366 78,413 71,687 45,000 20,000

Average current farm assets $302,955 Cash Crop inv. Lvstk inv. Receivables 302,955 Other 302,955 Total

plus

Average noncurrent farm assets $1,773,465 Breed stock Machinery Real estate Buildings 1,773,465 Other 1,773,465 Total

Average current farm liabilities $551,499 Notes pay. Accrued int. Current port. Taxes pay. 551,499 Other 551,499 Total

plus

Average noncurrent farm liabilities $702,524 Notes pay. Mortg. pay. Deferred tax 702,524 Other 702,524 Total Valuation

59.4% 17.9% 11.8% 10.8%

Repayment capacity Net farm income from operations (NFIFO) + Depreciation expense Withdrawals as unpaid labor Other withdrawals (net of nonfarm income) Total income tax expense + Interest on term debt Repayment capacity Principal paid on term debt Interest on term debt Repayment margin Term debt service coverage ratio

71,687 118,366 45,000 20,000 17,436 71,047 178,664 124,100 71,047 (16,483) 0.92

Liquidity ratios Current ratio 0.55 -$248,544 Working capital Solvency ratios Debt/asset ratio Equity/asset ratio Debt/equity ratio

Run Description Rolling Acres, Book Basis

60.4% 39.6% 1.52 xxx Primary inputs necessary for analysis xxx Secondary inputs optional to enhance analysis

Copyright 1993-05

3/9/2012