Farmers are used to calculating net income and profits each year for the entire farm bus­iness. Most farms and ranches pro­duce more than one product, though.

By dividing the operation into multiple production entities, the contribution of each one toward the financial goals of the business can be evaluated.

Enterprise accounting

The individual sources of farm income can be divided into "enterprises" or "profit centers." Each crop being produced and each species of livestock present can be considered a separate enterprise. Generally, these will ...