Some base assumptions have been set up on the calculator. These are for guidance only and should be adapted for your own situation.
The outcome will show a profit (or loss) on an enterprise on a $/ha basis. The higher the gross margin, the more profit you have.
- Enter your base yield. A good starting point is your long term average for the area in question. This calculator is based on a cropping enterprise.
- Enter a grain price – Use the long term net on farm values, say a five year average. Do not use current prices as these are likely to be misleading.
- Enter the individual inputs for the crop. This should include all costs you include in your gross margin calculations (i.e. all direct costs)
- This will leave you with a gross margin for the crop in question.
- Enter your cost of funds. (if you are borrowing money then this should be at the cost of your overdraft. If you have credit funds in the bank this should be at the rate of interest you are being paid, or the rate of return you will get from investing the funds elsewhere)
- Enter in your machinery costs and your depreciation costs for the machinery you use in the enterprise.