Assessment 1 - Steps 2-5

 

Step 2

As requested in the zoom workshop, please find my blog link below:

https://coleargus.blogspot.com/

 

Step 3

Link to Bega Cheese’s annual reports: https://begagroup.com.au/investors/reports/

 

KCQ’s for the 2024 Annual Report of Bega Cheese Limited:

 

Initial Thoughts

At first glance upon opening up the company spreadsheet and scrolling down to my name I observed plenty of recognisable companies, as well as some extremely foreign ones such as “Infineon Technologies” and “Sthree PLC” (my apologies to the students who received those ones). When I eventually saw that my company was Bega, I felt a small amount of relief knowing it was an Australian company. Bega was also very well known to me, as I see their products on an almost daily basis at my local grocery stores and have purchased Bega cheese periodically over the years.

My initial emotion is one of happiness that I received this as my company, as I believe researching an Australian company will provide useful, real-world insight into how companies function here at home and will add to my beginner-level knowledge base of business. I am also looking forward to further research into Bega, as it’s part of the food industry, and who doesn’t love food after all!

 

The 2024 Annual Report

As this document was 111 pages long, I decided to start by finding some background information on the company before exploring numerical value figures, as there were figures plastered all over the report, and it seemed quite overwhelming. The first important point of interest that stood out to me is that Bega Cheese was formed in 1899. Seeing that the company had been around for 126 years sparked something in me because I’ve always heard that success within business requires longevity. Therefore, with a company like Bega Cheese who have been in business for such a long period of time, they must have made some good business decisions regarding customer retention, as well as business structure and growth opportunities.

Upon further research in the report I found that from 1899-2000 Bega “primarily produced cheese” and I thought to myself well what happened since then? As far as I was aware from a consumer’s point of view, that’s all Bega has ever produced. However, it turns out that in 2001 Bega Cheese transformed from a dairy co-operative brand into a diversified branded food and beverages business. Additionally, from 2001-2016 Bega Cheese expanded by investing in their total capacity, gaining a successful ASX listing and expanding their dairy portfolio.

This point seemed rather interesting to me as for 101 years it seemed like they had operated with a consistent business model of producing cheese without broadening their horizons. Something must have changed, whether that was the owners, investors or shareholders, ultimately causing exponential growth into different areas of the food and dairy industry.

Further analysis shows that since 2016 the goal of Bega Cheese is primarily expansion, ultimately into new non-dairy categories while maintaining their market position within dairy as well. This shows the ability to adapt to the ever-changing and transforming business world, which I believe is what’s required when considering the future success of a company.

It’s safe to say I was shocked to see how far a simple cheese company had come in the last 25 years, I would have never known their roots were planted so deeply across the food and drink industry. This first step alone has given me the necessary experience to apply the age-old saying of “never judge a book by its cover” when performing research on a company of interest.

The marketing strategy I’m seeing portrayed is that of support towards Australian farmers and suppliers, stating that they have paid 1.5 billion dollars in milk and ingredients for production. From my experience this strategy works well among the Australian people as they feel like they are “helping the little guy” (the farmers) and ultimately, they are, however, it’s also to the benefit of larger corporations which I believe gets overlooked by the average person. I was also a little confused here as I’m unsure if that figure was for 2024 alone, or if it is the total since company creation. Upon reading further I deducted that this is indeed a yearly figure as the individual retail sales figures were presented for each branded product.

On page three of the report it states that shareholders received 30.5 million dollars profit after tax and 24.4 million dividends were declared in 2024. This figure seemed a little underwhelming to me considering how big the company is, which got me intrigued to find out how much profit was made the year prior. After sifting through what seemed like 20 pages of figures and trying to understand what all the different terminology and abbreviations were, I came across a table for the financial performance of the years 2023 and 2024, which included statutory and normalised reporting. From what I can see here, total profits after tax amounted to 30.5 million in the year 2024 and a total loss of 229.9 million for the year 2023. When I figured out that the brackets around the number actually meant a negative (or a loss) I was dumbfounded to realise that Bega Cheese actually operated at a net loss of 229.9 million in the 2023 financial year. Additionally, I was almost just as impressed to know they turned that all around and made a profit of 30.5 million in the following year.

 

Challenges Faced within the company:

Considering Bega was such a longstanding company and with some newly found knowledge regarding their financials, this led me to question what the reasoning behind such volatility in profit/loss margins could be? Next, to try and answer my question I decided to embark on a journey to find some information about the opportunities and risks involved with Bega operations. Initially what came to mind was the recent Ex-Tropical Cyclone Alfred which just hit northern New South Wales and Southeast Queensland which affected me directly through loss of power for 4 days and major flooding blocking roadways. As Bega Cheese primarily purchases milk from Australian farmers for production into their branded products, this must have some form of effect on the company. I stumbled upon an article named “Mass Milk Dumps Decimate Dairy Farms”, which went into detail about significant losses of milk on dairy farms including a loss of 375,000 litres of milk. Link found here: https://www.news.com.au/national/weather/mass-milk-dumps-decimate-dairy-farms/news-story/4605ca68f0a281e467e4802b53d63ce5?

This is a concern for Bega Cheese and may contribute to the financials of next year’s annual report, as losses and weather events such as these can affect the health of the animals and milk production over the following months. Further analysis showed that Bega Cheese Limited’s (BGA) average share price dropped from $6.11 on 20 Feb 2025 to $4.87 on 12 March 2025. This is likely due to the prediction of Ex-Tropical Cyclone Alfred and then the forthcomings of the event, however, the share price looks like it will seemingly rebound as an up-trend is seen on the 12^th-14^th of March 2025 whilst milk production continues to stabilise. Prior to this event, BGA seemed to have had an incredible year on the stock market as stocks had risen by almost 50% over a 12-month period and even still; after the recent crash due to a natural disaster BGA is up 20.53%. This can be seen here: https://www.fool.com.au/tickers/asx-bga/

Thinking further about this research reinstated to me the importance of diversifying the portfolio of revenue sources within a company, especially when it comes to the food and beverage industry. While the industry can be extremely lucrative, natural disasters and weather events are quite common phenomena in Australia and should be taken into consideration within the financials of the business model.

Additional to these weather events, Bega seems to be facing similar challenges to most companies currently, being overall inflation, competitors and cyber security. Of these challenges, overall inflation stands out to me the most due to the other listed challenges being faced and tackled for quite some time now. In my day-to-day experience as well as many others around me whether it be friends, family or colleagues, the rising rate of inflation has affected our everyday life significantly over the last five years or so. Therefore, it’s no wonder that companies are having a similarly hard time balancing and adjusting for those rates of inflation and from what I’ve read in this report it can affect many areas of the business. One of the ways Bega is trying to address inflation is through staff wages and by making sure they do not underpay their waged workforce, by assessing areas of high risk and implementing rolling EBA compliance reviews regularly. From my experience working in multiple different fields and positions over the last 10 years or so, making sure your employees are paid fairly and correctly is of upmost importance for a company’s success. Giving employees a little higher wage than the industry standard is appreciated and can incentivise loyalty and hard work, ultimately saving time and money on the company side by not having to re-hire and re-train new staff, thus saving resources.

 

Similarities/Differences between companies:

To identify some similarities or differences between Bega’s financial statements and those of other student’s firms, I decided to go and research one of the other companies that were assigned to other students in this unit. Additionally, to challenge myself, I decided to use one of the companies that I made fun of earlier in my initial thoughts: “Infineon Technologies”. Right away upon opening their annual report, I noticed it was nearly twice as long as my own. As I was scrolling through, I noticed their revenue was nearly 15 billion and they had a whopping 58,000 employees. At this point, I realised I didn’t get assigned to a big company at all, given Bega only recorded 3.5 million in revenue and only has 3,900 employees. Once I reached the financial statements, I quickly realised that their data seemed a lot more professional in the layout, in comparison to Bega. I could clearly distinguish the information I was looking for. For example, I was interested in the statement of financial position and the statement of profit or loss to compare some figures against my own company. The titles of the reports were clear, and the layout of the data had a much more aesthetically pleasing colour scheme opposed to the statements given by Bega. Considering this is a much bigger company, perhaps they put more emphasis on these small details for potential investors. This could potentially be a biased opinion on my end as well, as I went into the initial research for my own company with no idea what I was looking at when it came to financial figures, or what to expect from an annual report.

As for the similarities, all the fancy accounting words, and terminology are here as expected. From what I can tell so far, the process of producing financial reports is very standardised as it’s monitored by a governing body called the International Financial Reporting Standards (IFRS) which I’ve learned in my introductory to financial accounting class. Hopefully, this means that the more research I conduct on different companies, the easier this will get, as they all use the same reporting methods regardless of the company’s size or location across the world.

Am I happy with my company?

Initially I stated that when I found out my assigned company was Bega, I had felt slight relief knowing it was an Australian company and a familiar name. However, after doing a small amount of research into Infineon Technologies and having gained some more knowledge about the world of accounting through this unit and my other accounting unit, I am sure that regardless of which company I had been given it would have been a similar process of learning about what goes into an annual report and what each of the figures mean in their financial statements. That being said, I’d say I now feel indifferent about receiving Bega as my assigned company. It was interesting getting to know more about the functionality of the company and what they stand for when it comes to being Australian formed and based but it would not have mattered which company I had received (even ones with funny names I have no idea about).

Any concerns at this point?

At this point, the many hours I have spent researching my company have long surpassed my concerns. Looking back, I did hold some concerns regarding finding additional information on the company outside its annual report. I did have difficulties finding external resources to better understand my company from an outside perspective and not just that of its employees who have a reputation to uphold in their annual reports. It would have been nice to find some more recent articles or videos regarding the company’s standing with its customers, but I could not find much unfortunately. I’ve created a blog post that contains some general background information about Bega, alongside some recent developments that may be of interest to potential investors that can be found here: https://coleargus.blogspot.com/2025/03/bega-cheese-familiar-face.html

Studiosity:

I have used Studiosity previously, as it was provided for assistance to students during my certificate IV at Tafe. I found that it was essential to me as someone who had not studied in over 10 years and needed to adjust back into the lifestyle as well as the academic writing style. Additionally, with these units being hosted online it can sometimes be frustrating knowing that you can’t connect with your teacher/unit coordinator as swiftly as you could if you were studying on campus and that’s where Studiosity really comes in handy. One thing I noticed that has changed since I previously used it is that they have replaced the writing specialists who review your work with AI, unless I’m just not seeing that feature currently. On the bright side I received feedback for this assessment within two minutes, which is just insane. It still provided similar basic features; however, it did seem to lack some of the more in-depth and contextualised examples that were previously provided by the writing specialists when I last used it four months ago.

I will continue to use Studiosity as I’ve found it to be a great help in general since returning to study and I would 100 percent recommend it to other students. I believe it has single handedly trained me to write in a more academic manner and I can see that within the returned assessments. It seems like with every assessment I submit to Studiosity, they have been returned with fewer errors than the ones prior. Here’s to progress!

 

Discuss with others:

Attending the weekly workshop with Maria Tyler’s group was a great experience and you can really tell just how passionate Maria is about her work. She made it feel easy to open up about problems I had understanding certain aspects like my company’s financial statements, and I quickly realised that it wasn’t just me in this boat. In the week three workshop a bunch of students asked for help understanding the financial statements of their given companies and Maria went through each individual annual report, pointing out the differences and similarities. Something that I learned from this session was that each company she went through had a different way of saying the exact same thing; no wonder I was confused.. Discussing and approaching the situation together with other students gave me a much better understanding of the financial lingo as I don’t think I would have gone through everyone’s annual report without Maria skipping over the filler content. This promoted a deeper process of thought when it came to truly understanding the meaning of accounting and what each financial statement has to offer. I really appreciate Maria’s style of teaching and her bubbly enthusiasm towards accounting, it’s made the experience much more enjoyable throughout these initial steps of the assessment.

My three favourite blogs:

Chenaniah Casenas

https://chenaniahcasenas.wixsite.com/my-accounting-journe

When I clicked into Chen’s blog I was instantly hit with a massive gif of the ocean as her background. This was so eye-catching and aesthetically pleasing and resonated with me as I love the ocean. Based on the effort Chen has put into her blog from the layout to her enthusiasm within her posts I can tell she’s going to do well in this unit and university in general. Within her about me she mentioned that she moved from the Philippines in 2018 to be with her family. This fact also resonated with me, and I found it wholesome to see that she values her family so much that she would be willing to move countries to be with them.

Mitchell Lanser

https://mitchsuniblog.wordpress.com/

Mitch’s blog was simple yet effective. He went into great detail about his adult life which included him being in the Australian Army for 11 years and how he has a passion for property, specifically rural property. I have a great respect for the discipline of servicemen and carry those principles into my own life, so his background felt very relatable. Not only that, but he’s also doing a Bachelor’s of property and although I’m doing accounting, I’m majoring in property. So perhaps we will bump into each other a few times along our academic journey. (Definitely not a biased pick with this blog)

 

Amy Lebeter

https://unigirl8.wixsite.com/my-site

Amy was a standout among the blogs I read through. It’s clear that she had done extensive research when it came to creating a blog, as she mentions herself throughout the post “1830”. Amy also goes into extensive detail about her thought process about starting study, so much so that I questioned if I had done enough on my own blog. Overall, it was an enjoyable read and she gave an incredible insight into her thoughts, feelings and career background. Oh! and she doesn’t like pineapple on pizzas.. Even though I didn’t resonate with this specific trait, there were plenty of things I came across throughout the blog that sparked intrigue and similarity to my experiences. Best of luck Amy!

 

Step 4

Excel spreadsheet is uploaded separately.

 

Step 5

KCQ’s from Chapter 2 and Chapter 3.1/3.2:

KCQ 1: “Seeing our learning as simply regurgitating clear-cut, black-and-white facts, perhaps in an assessment at university or for use later in a job, is not going to get us very far.”

My experiences in the workplace and within my social circle reinforce the truth of this statement. I've witnessed many degree-holders, including close friends, transition into professional roles and essentially restart their learning journey, gaining practical knowledge from the ground up. To me, this suggests a tendency to prioritise short-term memorisation for academic success over genuine comprehension. As a hands-on learner, I've discovered that true retention comes from active engagement. While reading or watching can provide a foundation, it's the direct application of knowledge that truly cements understanding. For example, the process of manually inputting and analysing financial data in a spreadsheet, where I actively participate in each step, significantly enhances my ability to recall and apply those concepts in the future. I find that it’s all about repetition, the more you hear a term or practice a skill, the more likely you are to add this to your permanent knowledge base. Ultimately, I believe this experience is what will allow you to advance in your career and personal relationships.

KCQ 2: “If you think your firm’s annual report is not a marketing document, think again. It is a marketing document.”

The statement about annual reports as marketing tools struck a chord, mirroring my own experience reviewing my company's report. As a first-time reader of an annual report, I initially underestimated their persuasive intent, expecting purely factual insights. However, my analysis revealed a clear trend: the report's emphasis on supporting Australian farmers, a common marketing strategy I've observed across various media advertisements on television and YouTube as far back as childhood. After realising this, it truly highlighted the importance of recognising marketing strategies within annual reports to understand a company's strategic direction.

Furthermore, after sifting through 111 pages on my company’s annual report, the disproportionate allocation of space (only 20 out of 111 pages dedicated to financial statements and notes) raised a significant question for me: was the remaining content primarily marketing? Given my observations, it’s certainly possible.

KCQ 3: “It is true some businesses may move more slowly and be more ‘boring’ than others and may feel a bit like Barry Humphries (a well-known Australian comedian) dancing with his mother all night. For other firms, the ride can be more exciting. But whichever way it is, it is still a ride. Business is not about sitting still on the sidelines.”

This statement made me laugh. As I’m exploring deeper into accounting through my different units, I can see how what’s being portrayed here comes to life. You could get put on a solo mission producing financial statements for multiple firms and having your head stuck in an excel spreadsheet all day, or alternatively, you could be exploring business ventures with other companies and liaising with your co-workers to come up with new ideas for expansion within the business. I can see how both situations could be true at any given time when it comes to accounting, and to me that’s perfect. It’s just like getting the best of both worlds; sometimes we all need a little bit of boredom to balance out life’s excitements.

Looking through the lens of a future accountant, the only problem I see here is the timing for these different experiences. From what I’ve gathered so far, you may not, and most likely will not get to choose whether your day will be exciting or boring. But hey, this is just my hypothesis, I have no idea just yet.

KCQ 4: “If we do not run out of cash, no matter how big the losses we may make in our business we will not go broke and can keep on trading. However, the moment we run out of cash, no matter how many other assets we might have or profits we might be making, we are in trouble, serious trouble.”

You’d think this would be common knowledge and why write about it if that’s the case? Funny enough, I didn’t even really think about this possibility when it came to business. When you’re participating in the workforce as an employee, getting paid is just one of those things you expect to happen, and you don’t really take into consideration where the company’s financial position you’re working for is at.

I guess it makes sense... if you don’t have any accessible cash, it won’t take long for your company to go bust. To me, this reinstates the importance of always making sure you have access to a surplus of cash within your business operations. I’d also imagine that being on top of your asset situation must be of upmost importance, as well as having the ability to sell off inventory would be a priority for companies to ensure they have enough cash on hand to pay the suppliers and employees.