It's quite possible that this winter, your lender will want to do something called a sensitivity analysis, or 'stress test.'

No need to get stressed out – it can actually help your business. If he or she does not want one, you can do one yourself.

It's important for grain farmers especially, with prices now hovering below $3.74 per bushel. That was the price I got for my FFA corn way back in 1974. I thought I was rich!

Now, some people may not want to peak under this hood for fear of what they’ll discover. Sort of like avoiding a doctor visit when you know you really should get in there.

It is possible that a financial stress test will find something ugly lurking in your financial statements. “For example, if we are forecasting $4 corn and the farmer cannot cash flow at that price, that is a real problem because prices are at that level or below now,” says Wells Fargo lender Robert Grote. “Even borrowers who have a lower breakeven point or have leverage, and the sensitivity test shows their cash flow is going to go negative, then it may be a problem with the balance sheet and income statement.”

You can do a stress test of sorts by simply doing what-if scenarios with your financial statements. See where you are on profitability if operating expenses were to increase by 5 or 10% - what would happen to repayment capacity? What if revenue drops by 10% this year compared to last year, how does that impact numbers?

The fixes may be as simple as locking in lower interest rates with a longer repayment schedule. Or, you may determine that some assets are under-utilized and should be sold.

From a benchmark perspective, look at boosting liquidity. The top 20% of profitable farmers in FINBIN, from 2009 to 2013, have liquidity (working capital ratio to gross revenue) upwards of 44%. Around 33% is a good average, and any time that ratio falls below 10% it’s a red flag.

If your banker can help you fix rates and boost liquidity, take it. With fixed rates and higher working capital/gross revenue you can be confident you’re in good financial health. But a stress test will help you find out for sure.

“Focus on liquidity because that's going to be priority number one over the next few years,” says Virginia Tech economist Dave Kohl.

You want to be liquid, in part, to avoid ill-timed sales. When farmers harvest grain and lock it tight in a bin, as they did last fall, they were waiting to see if end users needed the grain badly enough to push prices higher and start grain moving; so far that really hasn’t happened.

Dave Kohl's five steps to positive margins:

-Business revenue up

-Non business revenue up

-Expenses down – these will be different for every farm; don't focus on minutiae

-Family living and taxes down. Develop personal and business income statements to see more clarity in family living budgets. They can be a tremendous drain not only on repayment ability but also liquidity. Too often farm operating money is eaten up by family living costs.

-Restructure debt service capacity. Farmers with strong balance sheets will want to refinance if necessary. But be careful of many refis, they just keep rolling operating losses on to term debt – he calls them 'roll over Beethoven.'