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# How would you calculate the value of a cow?

PrepLounge: Personal Fit
New answer on Apr 25, 2024
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How would you answer this question in your Personal Fit interview? Receive feedback on your answer and browse through the Q&As to review the approaches of other applicants and experts.

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You should assess the value generated, the selling value and the costs:

1. Value generated during cow possession:

• milk
• sons
• compost

2. The selling value will depend on:

• remaining value generable
• meat value
• other parts value (e.g. horns, skin)

3. Main costs:

• fixed costs amortization (e.g. farmer wage, structures, insurance, cow equipment)
• medical expenses
• feed and water

Best,

Antonello

Kosten:

Futter, Haltung, Arzt, Sonstiges x Lebenszeit

Profit:

Gewicht x Kilopreis

Ich würde die Kuh wiegen und ihr Alter bestimmen und dann mit den Preisen vergleichbarer Kühe vergleichen

It would depend on the value it can produce in it's lifetime. If selling dairy products made from the cow is more profitable i will keep the cow, if selling it's meet is more profitable i will sell the cow for it's meat and hide

First I would research market rates on different cows and see where this cow fits. I would assess the breed, age, gender, and it's living conditions to come up with a calculation on value.

Liters of milk per year plus births over lifetime plus salvage value

The variable of the milk it produces times the lifespan and the “scrape value” for selling it at the end if it's lifetime.

There are three ways to price the cow

1)benchmarking: see how much cows of competitors cost

2)cost based pricing. Calculate how much the products of the cow cost to calculate revenues and subtract the costs of farming the cow (labor, food, facilities), finally add a profit margin

3)price based: how much is the farmer willing to pay for the cow.

In answering this question I would focus on portraying creativity and innovation, instead of focussing on the detailed value analysis.

My dad happens to be a farmer, so my answer would be to give him a call, which will probably not be an answer the interviewer is expecting

and probably not an answer the op was expecting.

From an valuechain perspective I'd divide the cow into it's categories of value.

This could be:

1. Milk production

2. Meat production

3. Leather production

4. Other (Bones etc.)

Then i would try to valuate the lifetime earnings per category.

the age

the cost and the quality of the alimentation it has

the cost the elevage and estable

the milk that it can give

the quality of the meat

the race

I would asses the value generated:

- milk produced

- grass consumed

- amount of cows in the factory

- percentage of production produced by each cow

based on the KG and its meat

Determine how much the cow consumes (food, water, housing,…) compared to its weight

I would access a market value of the cow and based on these characteristics i will assume the value of my cow

Schätzung durch Vergleichswerte bspw. Wertermittlung eines Bullen

Like a stream of cash flow. The terminal value in this case would be the amount the butcher would pay at the end of the lifetime.

2 main factors considering we can obtain meat or other resources from the cow
- NPV: How much is the cow worth today (based in weight, for example)
- Future value: How can I profit from the cow in the long term (by producing milk or growing)

Additional considerations could include cultural factors: if the cow is considerated sacred in our culture, it's invaluable.

I would try to estimate the value a cow produces each month and then estimate the life time of a cow

Value of milk which can be extracted from her lifetime + Value of meat which can be sold in the market.

1. Analyse the market & competition

2. Cost of “production”

3. Premiumness of the product (e.g. organic vs convetional, origin)

4. Demand

Each year equals

Value generated from the milk+meat, selling price and costs

Anhand der Liter der Milch, welche die Kuh durchschnittlich gibt. Anschließend die Liter der Milch mit dem aktuellen Marktpreis multiplizieren. Zusätzlich würde ich noch den Wert des Fleisches als Schätzwert in meine Überlegungen miteinbeziehen.

Liter gegebene Milch x Lebenszeit

_____________________________________

Preis Milch

Conduct market research to find out how cows are valued.

Estimate the value of cow in the market

the weight, the milk it produces it per day and the market price

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