A FARM MANAGEMENT SURVEY IN BROOKS CO., GA. 11 
pared with $19.41. Nearly half of the receipts from cattle consisted 
of dairy products sold and consumed in the home, the balance being 
mostly cattle sold on the hoof. The low receipts per animal unit 
from cattle are due to the low grade of most of the native stock kept, 
and to the presence of the cattle tick in the county when these records 
were taken. A strong effort is being made to eradicate the tick and 
to improve the breed of cattle kept. The hogs grown are mostly 
grade stock of fair to good quality. 
SOURCES OF INCOME. 
One means of measuring the importance of the different farm 
enterprises is by the receipts from each in the form of sales and in- 
creases in inventories. Figure 8 shows graphically the sources of 
farm receipts and the relative importance of each, measured by this 
standard. It is seen that cotton is by far the most important single 
source of income, furnishing half of all the farm receipts, 1 that term 
1 Definitions. — The terms defined below will be used frequently throughout this 
bulletin. 
Farm receipts include all sales from the farm and increase of inventories of live stock, 
feeds, supplies. 
Farm expenses include all current cash expenditures, the value of farm labor per- 
formed by the family (except the operator), depreciation on buildings and equipment, 
and decreases in inventories of live stock and feed and supplies. 
Gross farm income is the sum of all farm sales, plus any increases in inventories. 
The net farm income is the difference between this sum and the sum of all farm 
expenses. For convenience, the term farm income is used to designate the net farm 
income. 
Labor income is the sum that the operator has left for his own labor and management 
after deducting from the farm income the interest on his investment figured at the 
current rate on well-secured farm loans. In this study 8 per cent interest is the rate 
used. Frequently prices of land are influenced by factors other than the present earning 
power for farming purposes. In such cases it is better, when calculating labor income, 
to use the interest on the working capital plus the net rent from the real estate instead 
of the interest on the investment. In this study these two methods of calculation gave 
essentially the same result, hence the simpler one was used. 
Farmer's earnings represent the sum of the labor income plus what the farm furnishes 
toward the living of the opei-ator and all others living or boarding in the farm home. 
Farm-management surveys have shown that the farm returns are largely dependent 
upon size of the business. For many purposes it is desirable that the factor of size be 
eliminated in order that farms of different sizes may be grouped together and compared. 
For this purpose the index of earnings is used herein. This factor is determined as 
follows : All farms of similar size are grouped together and the average farmer's earnings 
for each group is computed. The farmer's earnings of each farm in a given group is then 
compared with the average for that group, the group average being expressed as 100. 
Therefore, the index of earnings is the farmer's earnings expressed as a percentage of 
the farmer's earnings for all farms of a similar size. For example, if a farm shows an 
index of earnings of 110, it means that the farm in question returned farmer's earnings 
10 per cent larger than did the average farm of a similar size. 
The per cent return on investment is computed by deducting the value of the farmer's 
labor from the net farm income and dividing the remainder by the total capital invested. 
This figure expresses the profits of the business as that term is ordinarily used in the 
business world, and is nearly independent of the size of the farm. Obviously, this factor 
would have little value in comparing tenants with owner farms, but in this study all 
farms have been reduced to the same tenure, namely, that of owners who operate their 
own farms. 
The per cent return on investment eliminates the factor of size even more completely 
than does the index of earnings. These two terms express the profits of the business 
from different points of view, one ascribing the profits to capital and the other to the 
operator's labor and management. Both having been found very useful in this study, 
and are the ones used throughout as the principal measures of farm efficiency. 
