Information and Communication Technology

6.1.1. A Guide to the Financial Analysis of Shrimp Farming (spread sheet)

This Programme was written by Wade L. Griffin, Professor, Department of Agricultural Economics, Texas A&M University and Granvil D. Treece, Aquaculture Specialist, Texas A&M University, Sea Grant College Programme, 1996 .

In starting a shrimp culture business, one of the first steps is to develop a business plan. The business plan should contain a statement about the business and a financial plan. Once the basic business plan has been developed, it is necessary to demonstra te the economic feasibility over the planning horizon of the venture. This type of analysis is required by banks or investors for determining the financial success of the venture. The purpose for this Programme is to assist the user in conducting an econom ic feasibility analysis of a shrimp farm. To achieve this objective a financial analysis is conducted for a hypothetical intensive shrimp farm on the Texas coast. The hard copy of the analysis accompanying the diskette shows the results of the analysis and a "read me" file explains how to use the model and how to customize it to suite the users’ needs. The model includes seven (7) tables: 1. Unit Cost, Production, and Financial Assumptions; 2. Construction and Equipment Needs; 3. Farm Production and Inputs Used; 4. Capital Transactions and Various Financial Assumptions; 5. Pro Forma Cash flow Budget (Profit and Financial Return); 6. Pro Forma Balance Sheet; and 7. Pro Forma Income Statement (break-even analysis, sensitivity analysis). This financial model fo r a shrimp farm is developed in a fully integrated spread sheet. For example, if you want to change your stocking density, the model will automatically make all the changes to your cash flow, balance sheet, income statement, and rate of return.