I guess I didn't think I was advocating keeping a pile of cash but maybe I'm not thinking right what working capitol is. I think a revolving line of credit is great when there is income to be coming in but don't see the point paying off long term debt and in turn increasing short credit borrowing more every year. I already said it is going to get better the longer you are in business. I just think it is a way to measure profitability. If spending too much on living,interest, machinery and anything else including poor crops and poor prices they will all have an impact on working capitol in my opinion. Using up all your working capitol and borrowing on your asset's is like a reverse mortgage on your house. I know net worth and assets are great but sure is nice to be able to pay bills when due with out taking an additional mortgage on the farm. There was a thread on here last December of a forum member that was asking questions on depreciation that to me seemed like he was using up working capitol. http://talk.newagtalk.com/forums/thread-view.asp?tid=601292&mid=4994937#M4994937 |