Part Two: Accounting, Financial and Prospective Strategy Analysis
ACCOUNTING ANALYSIS会计分析
The purpose of this accounting analysis is to examine the policies that Tassal have chosen that are significant as to how it captures the underlying business reality. 这次会计分析的目的是检查和Tassal是如何捕捉到潜在的商业现实同样重要的Tassal的政策选择。Several accounting pol icies have been identified that are key to Tassal due to the nature of its product and the industry it competes in. 若由于其产品的性质和其参与竞争的行业，干会计政策已经被界定为Tassa的关键。
Biological Assets:生物资产
As Tassal undertakes an agricultural activity, it is allowed to adopt AASB 141 Agriculture, which permits it to value its biological assets at the end of each reporting period at its fair value less its cost to sell, allowing it to record these increments into its revenue. 由于Tassal进行农业活动，它允许采用AASB141农业。它允许重视在每个报告期结束时用公允价值减去销售成本来衡量它的生物资产，允许它将这些增量记入收入中。Due to the nature of the salmon and the delay for the company to recognise the benefits of the fish when it is sold, this standard allows Tassal to recognise the value of the salmon in its ‘live’ state and at a fair value. The standard also allows a choice if no market determined prices are available. This option is to value the biological asset at the present value of expected cash flows. 这样的选择是将生物资产作为预期现金流量的现值来衡量。
In adopting this standard, Tassal has chosen to value its biological asset at its fair value less its cost, specifically electing to value by the directors’ valuation, rather than an independent valuation. This use of directors’ valuation may perceive the board as being less financially prudent as well as there being some management incentive to adopt this method.
Borrowing Costs: 借贷成本
Changes to the treatment of borrowing costs from the reporting period of 2009 outlined in AASB 123 Borrowing Costs has eliminated the option of expensing Tassal’s borrowing costs in relation to its biological assets and now requires it to capitalise these costs into the asset themselves. These changes in its recognition have resulted in a decrease in its finance costs by $982,000 for the year of 2009, with movements of these costs into the value of its biological asset and its cost of sales. In treating this for prior periods, Tassal’s earlier reports to not provide a breakdown as to borrowing costs that could be capitalised.
Government Grants: 政府补助
Specific to the primary sector, the Australian government provides assistance to businesses that operate in the cultivation of agricultural products, which also includes the aquaculture of salmon. AASB 141 Agriculture differs from AASB 120 Accounting for Government Grants, in the recognition of these grants, as they are related to a biological asset, and the fact that Tassal choses to measure the grants at its fair value less the cost to sell rather then its cost less accumulated deprecation. Although a trivial amount that is provided and recognised as a source of revenue, it is important to identify the assistance that the government provides to Tassal in the form of grants and other items such as licenses.
Disclosure:流失
As a publicly traded company, Tassal is required to comply with ASX listing rules and other continuos disclosure requirements as governed by the Corporations Act 2001. 作为一家上市公司，Tassal必须遵守ASX上市规则和其他由2001年公司法管理的连续发布的要求。Its financial reports indicate that management have attempted to explain and provide forthcoming information as to the nature of its operations as well as provide other details of its operations in other informative means.
These informative means have included presentations to several industry bodies and important sector conferences such as the Austock Agribusiness Conference. Information provided in these presentations include the costing of certain projects that are currently being undertaken, changes in global and local market conditions, outlines of current strategic goals and particulars of Tassal’s current costing of its salmon and value added processes.
FINANCIAL ANALYSIS财务分析
Ratio Analysis: 比率分析
In order to provide a concise forecasting and valuation analysis, considerable examination of Tassal’s historic performance has been undertaken. 为了提供一个简洁的预测和估值分析中，已经对Tassal的历史表现进行了非常仔细的检查。 This has involved the analysis of both operating and financial performance against its previous years.
The financial statements have been reformatted with the separation of operating items and financial items. This purpose is to provide a clearer evaluation of Tassal’s ability in utilising its operating assets in its goal of creating value.
Operating Ratios: 营运比率
The above snapshot of Tassal’s operating ratios; especially its sales profit margin suggests that the company is having considerable sales difficulties. However, due to the nature of its primary product, this ratio must be viewed in light with the value of its current biological assets, which AASB 141 allows the firm to recognise for its overall revenue.
The historical performance of the company’s sales profit margin does not allow an accurate performance measure at this time for several reasons. Since emerging from receivership in 2004, the company undertook several significant long term investments of production facilities to provide for ample capacity. Secondly, similar to other agricultural production, the time delay in the harvesting of the salmon has meant that sales of salmon are only recognised when the fish is no longer a biological asset and has been moved into inventory.
In the calculation of Tassal’s inventory turnover, the amount of both its completed inventory and live biological assets was taken into account. This is important as it provides a clear picture as to the length of growing the fish from inception.
The comparison of both average day inventory and accounts receivables average against payables suggests that Tassal may be encountering a delay in its ability to cover its accounts payables in a timely manner.
Finally, Tassal’s operating working capital over the past 4 years indicate favourable liquidity performance and indicates that it historically has been able to cover any of its short term obligations.
Financial Ratios: 财务比率
The cost of debt can be measured in several ways. For this analysis, we have measured the cost of debt using the company’s after tax financial expense against the total amount of net financial obligations. The downward trend of Tassal’s cost of debt can be associated with a steady level of debt repayments while the level of its total debt has increased. This has been quite favourable in light of current credit conditions and other macro economic factors.
The effect of debt has had a positive change on the overall return on equity of the firm. However the operating return on assets has had a significant decrease over the 2007-2008 periods, followed by a levelling off for the remainder of the years. This decrease was a result of significant increases in its investment activities as well as a substantial increase in shareholders equity through issuing. It would be most probable that Tassal has an adequate amount of debt given its current structure and its use of that debt has been to undertake substantial investments.
Cash Flows: 现金流
The analysis of Tassal’s cash flows provides an indication as to how strong the company is at cash generation and the purposes it uses the cash for. The negative cash flow trend suggests that the firm is expending more cash then it is able to generate. This decision is in line with its current strategic goal of heavy investing activities such as the purchases of plant and property, as well as the acquisition of several brands.
In order to finance these investing activities and pay pidends from its profits, Tassal has raised considerable funds from share issues in periods of 2008 to 2010 as well as increase the amount of borrowings by more double over the same period.
Another item that is significant is the steady increase in both receipts from customers and payments to suppliers, with the gap between receipts and payments continually growing. This indicates a strong cash generation as the spread is increasing.
PROSPECTIVE ANALYSIS前瞻性分析
Forecasting:预测
Tassal emerged from receivership in 2004, where several operational and restructuring changes were implemented in an attempt to help return the company to profitability. (Korda Mentha, 2004) Since then, the company has undertaken considerable long term investment and current historical information is suggesting that the company is transiting from a start up into a growth stage. As such, the forecasting of Tassal’s future performance has taken into consideration the company’s stage within the business cycle.
In the forecasting of sales and sales growth, examination of both the sale price and quantity was taken into account. Tassal has historically produced approximately 70% of the total industry output, and due to the composition of this industry, it is unlikely that his amount would change significantly in the future. (ABARE 2010) Government data produced by ABARE indicates that both prices and tonnage are likely to increase steadily. (ABARE 2010)
The recent completion of Tassal’s production facility in Huonville earlier this year also indicates that there is ample room before the company will suffer from any capacity constraints. This facility is also in line with Tassal’s current strategy to produce and sell approximately 30,000 tonnes by 2015. (Tassal 2010)
Historical data of Tassal’s sales volume (tonnage) and sales revenue have steadily increased and have maintained a difference between 1-1.5%. Therefore sales growth and revenue have been forecasted to grow inline with Tassal’s strategic target of 30,000 tonnes by 2015.
The profit margin forecast has taken into account Tassal’s continual improvements and efficiency as well as their investor and conference reports which state that the company is slowly improving its margin where they are currently close to operating at global best practice for the cost of production. (Tassal 2010 Presentation)
Forecasting of the effective interest rate after tax has considered Tassal’s current rate that it pays on its borrowings, future macro economic reports by other analysis, as well as the New Zealand Treasury bond rates.
Valuation:价值
Several models were utilised to assist in valuing Tassal with the current forecasting that was undertaken. Differences that arose in each model are due to each of methods attempt in projecting future figures and the assumptions that we have considered.
These assumptions, arrived at through calculation included the current risk free rate, Beta and the market risk premium. In the calculation of Tassal’s Beta, regression analysis was undertaken by examining Tassal’s share prices over the past 5 years along with the S&P 500. Through the use of the Capital asset pricing model, and the assumption of the risk free rate from New Zealand treasury data, we were able to compute Tassal’s cost of capital for equity.
Because of Tassal’s historic negative cash flows and the non steady state of moments in these cash flows, the discounted cash flow model is not able to provide a proper analysis of Tassal’s valuation. The pidend discount model is able to provide a more accurate valuation based on the assumptions we have made. Historically, Tassal has continued to pay a pidend each year, as well as a steady state of increase in these pidends.
Both the Abnormal Earnings and Abnormal Operating Earnings models have provided almost identical results. This difference have arisen due to small roundings within the calculation, however the overall effect of Shareholders Equity and the price per share is alike. From the basis of our assumptions made earlier, this analysis and valuation has identified that there is a significant difference in the current value of Tassal’s publicly traded shares and the share price that has been calculated through this valuation.
Sensitivity: 灵敏度
The above table outlines both an optimistic and pessimistic scenario analysis as to the affect on the overall share price if one of the above factors were to come to realisation in our forecasting. Within this scenario analysis, firm value did change quite significantly when there was a movement to Tassal’s profit margin. As higher margins lead to an increase in its overall revenue, it is important to note how sensitive Tassal is to changes in its margin and the adverse impact it would have on the overall value of the company. This risk has been addressed by Tassal in its attempts to achieve global best practices with its costing, however it has yet to achieve this. With changes to other factors such as Sales, Asset Turnover or the Cost of Debt, the company is still considerably quite attractive based on each factor with all others being equal. It should also be noted however that Tassal is receptive to small changes in the in its Cost of Capital of the Firm.
Recommendation:建议
Tassal’s overall financial performance has shown quite a significant progression over the past 5 years since emerging from receivership. 自从兼并中兴盛以来过去的5年中Tassal整体的财务表现展示出相当显着的进展。 With continual management from the original receiver as the current CEO and Managing Director and clear strategic goals, it has been able to produce considerable profits. From the current valuation that has been undertaken in this report, the current market value indicates that it is at an attractive BUY price of $1.40 per share. 从在本报告中已经展示的目前的估值标准来看，目前的市场价值显示它正处于一个具有吸引力的每股1.40美元买入价。
References参考文献
Australian Bureau of Agricultural and Resource Economics 2009, Australian Fisheries Statistics 2008, ABARE, Canberra
Industry Commission 1996, Australian Atlantic Salmon: Effects of Importation Competition, Industry Commission, Canberra
Perez, C. 2010 Salmon Harvests decreased 59% as of May. (Fish Farming Xpert), viewed 25 October 2010, Tassal Group Limited, 2009, Tassal Annual Report 2009
Tassal Group Limited, 2010, Tassal Annual Report 2010
Tassal Group Limited, 2010, Tassal Financial Report Presentation 2010
The Department of Agriculture, Fishers and Forestry, 2010, The Department of Agriculture, Fishers and Forestry, Canberra, viewed 2 September 2011, The Treasury of New Zealand, 2010 Table of Risk-free Discount Rates and CPI Assumptions at 30 June 2010 for Accounting Valuation Purposes, The Treasury of New Zealand, Wellington , viewed 28 November 2010