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

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.

Website:  http://www.arjonline.org/agricultural-sciences/american-research-journal-of-agriculture/