Predictors of farm performance and repayment ability as factors for use in risk‐rating models
Abstract
This study investigates important factors that should be used by lenders in risk‐rating their farm customers. These factors predict actual farm performance and debt repayment ability. Linear and logistic regression models are used to identify the debt‐to‐asset ratio as a major predictor of repayment ability. In addition, the rate of asset turnover and family living expenses are strong predictors of farm performance. The results are tested over several time periods to verify the robustness of the predictors.
Keywords
Citation
Zech, L. and Pederson, G. (2002), "Predictors of farm performance and repayment ability as factors for use in risk‐rating models", Agricultural Finance Review, Vol. 63 No. 1, pp. 41-54. https://doi.org/10.1108/00214990380001140
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited