Future Business Leaders of America (FBLA) Agribusiness Practice Test

What is the primary factor that influences herd valuation at the end of a period?

1. Number of animals at the beginning of the period

2. Change in livestock purchases

3. Closing valuation of herd - opening valuation of herd

4. Number of animals sold during the period

The correct answer is: Closing valuation of herd - opening valuation of herd

The primary factor that influences herd valuation at the end of a period is the closing valuation of the herd minus the opening valuation of the herd. This reflects the overall change in the value of the herd over the accounting period, taking into account various factors such as growth, market variations, changes in breed quality, and any additions or reductions in the number of animals. This calculation provides an accurate representation of how the herd's value has fluctuated during the period, highlighting the impact of overall performance and market conditions on herd valuation. It reflects the net change in worth, which combines both appreciation and depreciation due to market factors and the herd's management practices. Understanding this difference is crucial for agribusiness managers and owners, as it directly relates to the financial health of their operations and aids in making future business decisions.