Page 326 - Agriculture_Form_Three

Agriculture for Secondary Schools
Agriculture for Secondary Schools

Record Scope of analysis Finding reasons Action(s) for
item improvement

Summarise and
compare the
monthly or seasonal Find reasons for Plan for ways to
SALES or yearly sales and the yield and price increase productivity
receipts to find out changes or sales so as to
if there are changes. improve the business
Are they rising or
falling?

Summarise and
compare the Plan for ways
monthly or seasonal Find reasons for to reduce farm
COSTS or annual purchases the expense trend purchases and
and expenses to changes expenses so as
find out if there are to improve farm
changes. Are they enterprise
rising or falling?

Summarise and Plan for ways to
compare the improve receipts/
monthly or seasonal sales/productivity
or annual profits of Find reasons for
PROFITS consecutive periods the changes of or reduce purchases
/expenses and
so as to find out if farm performance fixed costs so as
there are changes. to improve the
Are they rising or performance
falling?

Figure 15.1: Schematic presentation of analysis for sales, costs and profits

Gross margin analysis
Gross margin is the amount of money a farmer or an entrepreneur retains after
incurring the variable costs associated with producing the goods which he/she
sells or the services he/she provides. It is equal to the difference between the total
gross income (revenue) and the total variable costs. Gross margin is also termed
as gross profit. Total revenue is obtained by multiplying farm yields and selling
prices. Variable costs are production costs which are directly allocated to a particular
enterprise and usually change according to seasons, size and scale of production.
Examples of variable costs include seeds, fertilisers, agro-chemicals, casual or hired
labour, packaging materials, land preparation and transport of inputs and produce.

Student’
Student’s Book Form Twos Book Form Three
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