Predictors of farm performance and repayment ability as factors for use in risk-rating models

Lyubov Zech, Glenn Pederson

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

This study investigates important factors that should be used by lenders in riskrating 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.

Original languageEnglish (US)
Pages (from-to)41-54
Number of pages14
JournalAgricultural Finance Review
Volume63
Issue number1
DOIs
StatePublished - May 5 2003

Keywords

  • Farm financial performance
  • Regression models
  • Repayment ability
  • Risk-rating

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