Difference between revisions of "Dynama+"

From Breedcow Dynama
Jump to navigation Jump to search
m (Add Monthly Cash flow)
 
(30 intermediate revisions by 6 users not shown)
Line 1: Line 1:
The Dynamaplus program uses the current herd structure and numbers as a starting point to plot the likely future cash flow, profit and debt servicing capacity of a ''dynamic'' cattle enterprise. The program can model changes in herd structure, financial and economic performance in ten year blocks.  
+
==Summary==
 +
The Dynama+ program uses the current herd structure and numbers as a starting point to plot the likely future cash flow, profit and debt servicing capacity of a ''dynamic'' cattle enterprise. The program can model changes in herd structure, financial and economic performance in ten year blocks.  
  
The Dynamaplus program starts with actual stock numbers on hand to develop its budgets. This is very unlike the “steady state” imagined in [[Breedcowplus]] program.  
+
The Dynama+ program starts with actual stock numbers on hand to develop its budgets. This is very unlike the “steady state” imagined in [[Breedcow+]] program.  
  
 
The program calculates expected herd numbers for each annual period based on the expected brandings, deaths and sales within the period and calculates herd cash flow. The outputs are based on the expectation of future prices and animal performance provided by the manager of the enterprise.   
 
The program calculates expected herd numbers for each annual period based on the expected brandings, deaths and sales within the period and calculates herd cash flow. The outputs are based on the expectation of future prices and animal performance provided by the manager of the enterprise.   
  
Dynamaplus is therefore used to consider the capacity of a beef cattle herd to manage debt, undertake development or recover from a sudden production or economic shock. It is commonly used to either prepare a budget for current operations or consider the implementation of change over time.  
+
Dynama+ is therefore used to consider the capacity of a beef cattle herd to manage debt, undertake development or recover from a sudden production or economic shock. It is commonly used to either prepare a budget for current operations or consider the implementation of change over time.  
  
The Dynamaplus program is comprised of six core worksheets - [[DynamaplusGrowthPath|Growth Path]], [[DynamaplusAECalc|AECalc]], [[DynamaplusPrices|Prices]], [[DynamaplusHuscosts|Huscosts]], [[DynamaplusAssets|Assets]] and [[DynamaplusDynama|Dynama]]. Each worksheet can be accessed by clicking on the tabs at the top of the web page.
+
The Dynama+ program is comprised of six core worksheets - [[Growth Path]], [[Dynama+ AECalc|AECalc]], [[Dynama+ Prices|Prices]], [[Dynama+ Huscosts|Huscosts]], [[Dynama+ Assets|Assets]] and [[Dynama+ Dynama|Dynama]]. Each worksheet can be accessed by clicking on the tabs at the top of the web page.
  
Dynamaplus can be readily set up with values by importing data from a [[Breedcowplus]] file.
+
----
  
'''''insert transfer explanation / diagram'''''
+
===Using the Dynama+ program===
  
==The concepts underpinning the Dynamaplus program==
+
The program is located with the [[https://breedcowdynama.com.au Breedcow and Dynama Software]], within the ''Tools'' tab, which can be accessed after registering or logging in to use the free software.
  
The core of Dynamaplus is a ten year livestock schedule that shows the annual flow of cattle through the herd. The flow of cattle and the performance described for the herd drives all of the outputs of the model.
+
*A new scenario can be created by clicking the ''Save'' button beside a blank yellow name bar and can be named by typing in the yellow bar. This scenario or previously created scenarios can be edited by clicking the ''Open'' button.
 +
*To open an example scenario click the ''Copy'' button beside the example scenario and it will be copied into your scenario list where it can be opened as your own scenario.
 +
*A scenario can be shared with another user by clicking the ''Share'' button then entering in the email address for the user you wish to share it with. ''Note that this must be the email they have used to register their account with at https://breedcowdynama.com.au.'' Once sent the shared scenario will appear in the recipient's scenarios list for the relevant program.
  
===Measures of profit and cash flow in Dynamaplus===
 
  
The Dynamaplus program calculates a range of financial measures that include both cash and non-cash components in their construction. The key measures calculated are net worth, cash flow for debt service, net income and return on total capital (in dollars and percent). The relationships between these measures and what they mean is discussed in detail in the appendix of this user manual.     
+
[[file: Dynama_Scenario_List.PNG|frame|center|Dynama+ scenario list]]
  
In summary:
+
----
  
*Net worth is calculated as the total asset value less total debt as at a particular date. Net worth is also known as “equity” and may be expressed as a percentage.
+
===Entering data in Dynama+===
*Cash flow for debt service is calculated by deducting all cash outgoings (except loan service) from all cash inflows. Note that this differs from the definition of cash flow in the discussion of accounting measures in the appendix, which is net of debt service. In Dynamaplus, the cash flow for debt service is put first towards the service of term loans, with any surplus going into the working accounts and any shortfall funded from working accounts.
+
The Dynama+ program is comprised of the [[Growth Path]], [[Dynama+ AECalc|AECalc]], [[Dynama+ Prices|Prices]], [[Dynama+ Huscosts|Huscosts]], [[Dynama+ Assets | Assets]], [[Dynama+ Dynama|Dynama]] and ''Monthly Cash Flow'' worksheets. Each worksheet is accessed by clicking on the tab at the top of the web page.
*Cash in and cash out include all cash components of the net income calculation, plus items of a private or capital nature that are not part of the net income calculation. The latter include family living expenses and taxation, capital expenditures, receipts and other capital transactions including gifts given or received and transfers to or from other accounting entities.
 
*Depreciation and livestock inventory change, which are part of the net income calculation, are not included in the cash flow calculation since they are not cash.
 
*Net income is defined in Dynamaplus as being equal to gross income, including the increase or decrease in livestock inventory value, less all variable and fixed costs including interest and depreciation. Net income includes some non-cash items (inventory change and depreciation) and excludes some cash items (tax, family expenses, capital transactions and loan reductions). '''Net income is thus not the same thing as net cash flow.'''
 
*Depreciation is the annual provision made in profit budgets to spread the cost of capital items such as vehicles, machinery and fences over the period of use of these items. Such capital costs, rather than being charged against net income as they occur, are smoothed over time and charged annually as depreciation. These capital costs will show up in a cash flow budget (and in [[DynamaplusDynama|Dynama)]] as lump sum outlays. If funded by borrowing, there will also be a cash inflow as the loan is received, and a series of outflows as the loan is repaid. Leased capital does not show up in the depreciation calculation (or in the balance sheet) but appears as a lease payment in the calculation of net cash flow or net income.
 
  
Budgets constructed in Dynamaplus need to observe the limits on stocking rate (adult equivalents), working account balances and total debt that apply in the real world of the beef enterprise being modelled.
+
Entering data in the worksheets is best undertaken in the following order:
  
====Profit versus cash flow====
+
Step 1. [[Growth Path]]
  
A profit and loss statement is one of the three main ways used to look at overall business outlook and performance - the cash flow budget (or statement of sources and uses of cash) and the statement of assets and liabilities being the other two.
+
Step 2. [[Dynama+ AECalc|AECalc]]
 
Cash flow statements and budgets are regularly drawn up to monitor or predict short term cash flow but looking at short term cash flow on its own can paint a very misleading picture of the direction of a beef business.  A cash-flow statement /budget show the cash expected to come into and go out of a business over a given period. It can indicate the amount of working capital that may be needed from outside sources and whether it is possible to fund the production cycles of the business within the current borrowing limits negotiated with the lender.
 
  
A cash-flow budget can bear little relationship to the actual profitability of the business as it may include things like capital income and expenditure, new loans, off farm income and personal expenses.  A cash-flow budget also does not reflect the non-cash items such as unpaid operator’s allowance, depreciation or increases/decreases in the value of inventories. Estimating these things in a profit budget allows a more accurate estimate of how efficiently resources are being used.
+
Step 3. [[Dynama+ Prices|Prices]]
  
Profit and loss statements or budgets are constructed to estimate the profit of a business over a given period so therefore focus on the efficiency of resource use within the business.  
+
Step 4. [[Dynama+ Huscosts|Huscosts]]
  
It can be argued that profit can only really be measured once the investment is finalised and all of the inflows and outflows accounted for. As most beef businesses have an effective investment life that may span decades, the estimates of profit derived will apportion values to capital at the start and end of the time period of the analysis. In this way any improvement in the underlying value of capital or a change in the livestock and plant inventory due to a change in strategy can be included in the estimate of profit made.
+
Step 5. [[Dynama+ Assets|Assets]]
  
=====Profit terms=====
+
Step 6. [[Dynama+ Dynama|Dynama]]
  
===How adult equivalents, prices and variable costs are calculated in Dynamaplus===
+
The “Name” areas at the top of each worksheet are for users to identify worksheet data files. 
  
====What are adults equivalents?====
+
Each worksheet also has a Note Pad or Memo Page in which more detailed information, such as supplement costing or cattle freight calculations, can be recorded.
  
=====Adult equivalents and feeding supplements=====
+
Dynama+ can be readily set up with values by importing data from a [[Breedcow+]] file.
  
===Age groups in the Dynamaplus program===
+
----
  
====Adding brand years to match age groups====
+
'''Importing and using Breedcow+ data in Dynama+'''
  
===How mating, calving and death rates are calculated in Dynamaplus===
+
Users can enter actual livestock numbers, asset values, liabilities, prices and budget figures in Dynama+ to start off the process. Entering targets and data already developed in Breedcow+ can speed this process up.
  
====Weaning rate calculations in Dynamaplus====
+
Using a Breedcow+ analysis as starting data for cattle numbers, production parameters, prices and husbandry costs provides an efficient starting point and actual cattle numbers can be “overtyped” in the first year of the Dynama+ livestock model to closely match numbers and sales to the initial cash flow.
  
====Spraying in Dynamaplus====
+
Use the ''Import Breedcow'' function to import [[Breedcow+]] data into Dynama+.
  
====Calculating Dynamaplus herd bull requirements====
+
Data for the [[Dynama+ AECalc|AECalc]], [[Dynama+ Prices|Prices]], [[Dynama+ Huscosts|Huscosts]] and [[Dynama+ Dynama|Dynama]] pages can be transferred from separate Breedcow+ files if desired or the ''Import All'' function found on the [[Dynama+ Dynama|Dynama]] page can be used to import one lot of data from a [[Breedcow+]] file into the program.
  
====Calculating the number of calves in Dynamaplus====
+
Using the ''Import Herd'' and ''Import Autosales'' function on the [[Dynama+ Dynama|Dynama]] worksheet allows a basic herd structure and production targets to be imported into Dynama+. Fixed costs and balance sheet values will have to be added manually, if required.
  
====Deaths in Dynamaplus====
+
 
 +
[[file:Inport buttons.PNG|left|frame|Figure 1 - Import Breedcow]] [[file:Import All.PNG|center|frame|Figure 2 - Import All found on the Dynama page]]
 +
 
 +
Indeed, the whole 10 year budget can be run off [[Breedcow+|Breedcow+'s]] data, since the end point of the Dynama herd, i.e. year 10, can also be transferred from a [[Breedcow+]] file using the ''Import AutoSales'' button found on the Dynama page. The transferred AutoSales values determine annual sales in the Dynama+ herd schedule such that herd structure converges on that represented in the Breedcow+ file.
 +
 
 +
If the Breedcow file used for AutoSales is the same as used to define the starting point, the result will be 10 years of stable state in Dynama+. Otherwise it will be a transition from the starting stable state to the end point stable state. Since the formula driven sales numbers can be overridden, the transition can usually be helped along by altering sales where required. If production parameters, prices and variable costs differ from year 1 and year 10, these values must also be phased over time from year 1 to year 10 values.
 +
 
 +
Users can benefit from modelling the intended end point in Breedcow+ and importing that data from Breedcow+ using the ''Import AutoSales'' button on the Dynama page. This is infinitely faster than making individual entries for each group of cattle for each year. Once AutoSales are in place, sales can still be changed manually – the difference is that you may need to change only two or three entries for each year, and perhaps not even for all the years.
 +
 
 +
Modelling change in Breedcow+ is only the first step – it tells us if the change is profitable once it has been implemented. The next thing we need to know is how the transition from one system to another affects cash flow and debt service. A run of Dynama+ files, using file transfers from Breedcow+ to speed things up, can provide this information.
 +
 
 +
Menu options are provided in the Dynama+ program to import part or all of the data from a Breedcow+ file into any or all of the Dynama+ worksheets. The data can be inserted in the first or last year of the Dynama+ file. Data transferred to the final year will be used as the end point of a manual transition from starting data to end data.
 +
 
 +
----
 +
'''For more detailed explanation on the principles behind the Dynama+ program and its assumptions go to [[Dynama+ Assumptions|Dynama+ assumptions]].'''
 +
----

Latest revision as of 03:55, 14 June 2023

Summary

The Dynama+ program uses the current herd structure and numbers as a starting point to plot the likely future cash flow, profit and debt servicing capacity of a dynamic cattle enterprise. The program can model changes in herd structure, financial and economic performance in ten year blocks.

The Dynama+ program starts with actual stock numbers on hand to develop its budgets. This is very unlike the “steady state” imagined in Breedcow+ program.

The program calculates expected herd numbers for each annual period based on the expected brandings, deaths and sales within the period and calculates herd cash flow. The outputs are based on the expectation of future prices and animal performance provided by the manager of the enterprise.

Dynama+ is therefore used to consider the capacity of a beef cattle herd to manage debt, undertake development or recover from a sudden production or economic shock. It is commonly used to either prepare a budget for current operations or consider the implementation of change over time.

The Dynama+ program is comprised of six core worksheets - Growth Path, AECalc, Prices, Huscosts, Assets and Dynama. Each worksheet can be accessed by clicking on the tabs at the top of the web page.


Using the Dynama+ program

The program is located with the [Breedcow and Dynama Software], within the Tools tab, which can be accessed after registering or logging in to use the free software.

  • A new scenario can be created by clicking the Save button beside a blank yellow name bar and can be named by typing in the yellow bar. This scenario or previously created scenarios can be edited by clicking the Open button.
  • To open an example scenario click the Copy button beside the example scenario and it will be copied into your scenario list where it can be opened as your own scenario.
  • A scenario can be shared with another user by clicking the Share button then entering in the email address for the user you wish to share it with. Note that this must be the email they have used to register their account with at https://breedcowdynama.com.au. Once sent the shared scenario will appear in the recipient's scenarios list for the relevant program.


Dynama+ scenario list

Entering data in Dynama+

The Dynama+ program is comprised of the Growth Path, AECalc, Prices, Huscosts, Assets, Dynama and Monthly Cash Flow worksheets. Each worksheet is accessed by clicking on the tab at the top of the web page.

Entering data in the worksheets is best undertaken in the following order:

Step 1. Growth Path

Step 2. AECalc

Step 3. Prices

Step 4. Huscosts

Step 5. Assets

Step 6. Dynama

The “Name” areas at the top of each worksheet are for users to identify worksheet data files.

Each worksheet also has a Note Pad or Memo Page in which more detailed information, such as supplement costing or cattle freight calculations, can be recorded.

Dynama+ can be readily set up with values by importing data from a Breedcow+ file.


Importing and using Breedcow+ data in Dynama+

Users can enter actual livestock numbers, asset values, liabilities, prices and budget figures in Dynama+ to start off the process. Entering targets and data already developed in Breedcow+ can speed this process up.

Using a Breedcow+ analysis as starting data for cattle numbers, production parameters, prices and husbandry costs provides an efficient starting point and actual cattle numbers can be “overtyped” in the first year of the Dynama+ livestock model to closely match numbers and sales to the initial cash flow.

Use the Import Breedcow function to import Breedcow+ data into Dynama+.

Data for the AECalc, Prices, Huscosts and Dynama pages can be transferred from separate Breedcow+ files if desired or the Import All function found on the Dynama page can be used to import one lot of data from a Breedcow+ file into the program.

Using the Import Herd and Import Autosales function on the Dynama worksheet allows a basic herd structure and production targets to be imported into Dynama+. Fixed costs and balance sheet values will have to be added manually, if required.


Figure 1 - Import Breedcow
Figure 2 - Import All found on the Dynama page

Indeed, the whole 10 year budget can be run off Breedcow+'s data, since the end point of the Dynama herd, i.e. year 10, can also be transferred from a Breedcow+ file using the Import AutoSales button found on the Dynama page. The transferred AutoSales values determine annual sales in the Dynama+ herd schedule such that herd structure converges on that represented in the Breedcow+ file.

If the Breedcow file used for AutoSales is the same as used to define the starting point, the result will be 10 years of stable state in Dynama+. Otherwise it will be a transition from the starting stable state to the end point stable state. Since the formula driven sales numbers can be overridden, the transition can usually be helped along by altering sales where required. If production parameters, prices and variable costs differ from year 1 and year 10, these values must also be phased over time from year 1 to year 10 values.

Users can benefit from modelling the intended end point in Breedcow+ and importing that data from Breedcow+ using the Import AutoSales button on the Dynama page. This is infinitely faster than making individual entries for each group of cattle for each year. Once AutoSales are in place, sales can still be changed manually – the difference is that you may need to change only two or three entries for each year, and perhaps not even for all the years.

Modelling change in Breedcow+ is only the first step – it tells us if the change is profitable once it has been implemented. The next thing we need to know is how the transition from one system to another affects cash flow and debt service. A run of Dynama+ files, using file transfers from Breedcow+ to speed things up, can provide this information.

Menu options are provided in the Dynama+ program to import part or all of the data from a Breedcow+ file into any or all of the Dynama+ worksheets. The data can be inserted in the first or last year of the Dynama+ file. Data transferred to the final year will be used as the end point of a manual transition from starting data to end data.


For more detailed explanation on the principles behind the Dynama+ program and its assumptions go to Dynama+ assumptions.