7 Limitations and Further Research Implications
7.1 Survey Construction
The purpose of this survey is not to have an exhaustive view
of the tools used by the practitioners in the field. As the questionnaire was
sent to consultants of different CERFRANCE, the answers cannot be considered as
representative for all accounting companies working with farmers. However, the
CERFRANCE has a dominant position in this particular market all over the
country and serve more than 50% of the farmers. Therefore, it could be
appropriate for the CNCER to intensify its researches on the subject to uniform
the practices across all CERFRANCE.
7.2 ROE and ROA Analysis
As we can see in Table 7 page 29, some years like 2009 count
fewer companies available for analysis, even if the number of books accounts
produced by the CERFRANCE Isère increased constantly over the 5 years.
Therefore, some companies were not included in the research because of
limitations of the information system. However, this limitation cannot be
considered as enough relevant to invalidate the results obtained, mainly
because the non-inclusion in the database for a company occurs randomly (there
is no reason not to include results in the database).
Another limitation comes from the decision to work on a
constant population. This constant population enables an interpretation of the
results over several years, but it also removes the companies that went
bankrupt during the studied period. Therefore, this exclusion criterion may
have an effect on the results for the hypothesis 2 which analyses the effect of
financial distress. However, the number of bankruptcy in agriculture is really
low: only 63 farms went bankrupt in 2011 in Rhone Alpes (Coface, 2011) over 39
020 farms (Agreste, 2011), which represents 1.6%o bankruptcy in the sector for
the year.
Another limitation comes from the number of farms available
for the cattle specialization. These farms, specialized in beef production are
not enough represented in Isère to obtain reliable results. Other
regions such as Côtes d'Or or Saône-et-Loire should work on the
subject.
Finally repeated measure statistical test could have been
performed to test the data to try to evaluate more precisely the ideal debt
leverage ratio. However, these mixed models are not available with traditional
statistical software as they do no compare means or medians but probabilities
(here probability to fall in financial distress in year N+1 depending on the
debt level of year N). As this research paper tries to serve as a base for all
the consultants of the CERFRANCE network, this analysis needs to be replicable
with the results of other departments without expensive tools such as SAS or
SPSS. However, this limitation justifies further researches on the topic.
7.3 Bond Yield Plus risk Premium Model
The bond yield plus risk premium model is easier to calculate
than the WACC for the farms, which represents a strong advantage for this
method. However, this model does not take into account the financial structure
of the companies studied. This strong limitation reduces its applicability to
the farms of Isère, which are really diversified.
The research was based on elements found in the literature for
this part of the research. It has been
decided to choose this method in
order to try to estimate what actualization rate could be chosen
without exhaustive researches on the subject. The purpose of
this choice is to compare the actualization rate used by practitioners with the
rates the tax authorities could use in case of litigation.
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