In interpreting data obtained from farm accounts, frequent use is made of financial ratios, and of rates of input per unit of labor, land, or capital employed in the farm business. These so-called farm efficiency factors are designed to give the farm operator an approximate measurement of his success in organizing and managing those elements of the farm business which are, to some degree, under his control.
Efficiency factors or operating ratios are also useful to the extension worker in farm management. This specialist, as he discusses applications of farm organization and management principles, often feels a need for some means of making a rapid preliminary appraisal of the farmer's performance in the recent past.
Hopkins, John A. Jr.
"The uses of efficiency factors in analysis of farm records,"
Research Bulletin (Iowa Agriculture and Home Economics Experiment Station): Vol. 13
, Article 1.
Available at: https://lib.dr.iastate.edu/researchbulletin/vol13/iss160/1