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A business performance index model that measures wealth change in Australian farm businesses

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  • Sefton, Clive A.
  • Cox, Rodney J.

Abstract

This paper presents an evaluation of a farm-business assessment model that uses financial performance measures and tracks ‘wealth change’ to evaluate performance trends over time, and ranks the relative business performance of commercial participants. Its core component involves the use of comparative analysis, which is structured as an introductory rapid-assessment model, together with a ranking system that has been designed to differentiate the relative performance levels of farm businesses. The system has been labelled as the Business Performance Index (BPI) model to reflect its performance-ranking role that explores the relationships, if any, between farmer attitudes and business performance. The BPI model is discussed within the context of the debate as to the role and shortcomings of comparative analysis and benchmarking methods. The data collection method and the analysis have been field tested across 200 farm families throughout Victoria and New South Wales. During the interviews, data were collected from financial statements, supporting documents and farmer comments. The model’s results have been statistically compared to results obtained from two other ‘aggregate score’ methods of assessing business performance.

Suggested Citation

  • Sefton, Clive A. & Cox, Rodney J., 2005. "A business performance index model that measures wealth change in Australian farm businesses," AFBM Journal, Australasian Farm Business Management Network, vol. 2(2).
  • Handle: RePEc:ags:afbmau:123165
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    File URL: http://purl.umn.edu/123165
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    References listed on IDEAS

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    1. Ronan, Glenn & Cleary, Gordon, 2000. "Best Practice Benchmarking in Australian Agriculture: Issues and Challenges," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123728, Australian Agricultural and Resource Economics Society.
    2. Ferris, Alexandria & Malcolm, Bill, 1999. "Sense and Nonsense in Dairy Farm Management Economic Analysis," 1999 Conference (43th), January 20-22, 1999, Christchurch, New Zealand 123803, Australian Agricultural and Resource Economics Society.
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    Cited by:

    1. Williams, John & McSweeney, Peter & Salmon, Robert, 2014. "Australian Farm Investment: Domestic and Overseas Issues," Australasian Agribusiness Perspectives 234408, University of Melbourne, Melbourne School of Land and Environment.

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