Profitability and Financial Sustainability Analysis in Italian Aquaculture Firms by Application of Economic and Financial Margins | Science Publications

American Journal of Agricultural and Biological Sciences

Giuseppe Bonazzi¹  Mattia Iotti¹ 

关键词: Financial Sustainability;    Profitability;    Aquaculture Firms;    Free Cash Flow to Equity;    Operating Cycle;    Net Working Capital;   

DOI  :  10.3844/ajabssp.2015.18.34

学科分类：农业科学（综合）

来源: Science Publications

【 摘 要 】

Agricultural Firms operating inthe aquaculture sector in Italy are often characterized by high investment andhigh capital intensity. In fact, these companies need to develop structures andbreeding systems to generate adequate cash flow to repay their investment infixed assets. In addition, the biological cycle of breeding further extends theneed for capital, in this case to finance working capital. There is thereforeoften a mismatch between the economic and financial cycles, wherein profitmargins may differ from financial margins. In this way, such companies have aneconomic advantage but no sustainable financial cycle. In these cases, severalcrisis may force companies to default, especially when firns are unable tocover debt repayment. This difficulty is particularly present in Italy, whereaquaculture firms are often Small and Medium Enterprises (SMEs) and thereforehave greater difficulty than large companies accessing the capital market. Ourresearch evaluates the cost effectiveness and financial sustainability of asample of forty firms operating in the aquaculture sector in Italy, within atimespan of five years, through comparative analysis of the economic andfinancial margins. The analysis shows that such firms are capital intensive (TA/VPof median value is 1.16%). Financial debt emerges as the first source ofcapital then increasing companies’ financial dependence through credit systemsand borrowing costs. Firms have a particular absorption in the NWC cycle, withI_DAYS being 143.29 days, AR_DAYS being 72.75 and 145.51 AP_DAYS expressingfinancial operating cycle (I_DAYS + AR_DAYS - AP_DAYS) with a length of 70.53days. Profit margins, even if they are correlated with financial margins, are loweron average. The research highlights that economic model worst explains FCFE (F= 0.011 and adjusted R² = 0.803), while the financial model bestexplains FCFE (F = 0.000 and adjusted R² = 0.922). Our research willbe further developed through analyzing cooperatives, unincorporatedpartnerships and sole proprietorships. It may also be useful to undertake acomparative analysis of aquaculture firms operating in other countries of theMediterranean basin.

【 授权许可】

Unknown