27 SOLUTIONS TO IMPROVE EFFICIENCY OF BUSINESS CAPITAL USE AND MANAGEMENT AT QUANG NINH AGRICULTURAL MATERIAL JOINT STOCK COMPANY

MINISTRY OF FINANCE ACADEMY OF FINANCE -☐☐☐ STUDENT: DINH THO PHUONG NAM GROUP: CQ55/51.01 GRADUATION THESIS TOPIC: SOLUTIONS TO IMPROVE EFFICIENCY OF BUSINESS CAPITAL USE AND MANAGEMENT AT QUANG NINH AGRICULTURAL MATERIAL JOINT STOCK COMPANY Major Student code : English for Finance and Accounting : 17522202010020 Ha Noi-2021 MINISTRY OF FINANCE ACADEMY OF FINANCE -☐☐☐ STUDENT: DINH THO PHUONG NAM GROUP: CQ55/51.01 GRADUATION THESIS TOPIC: SOLUTIONS TO IMPROVE EFFICIENCY OF BUSINESS CAPITAL USE AND MANAGEMENT AT QUANG NINH AGRICULTURAL MATERIAL JOINT STOCK COMPANY Major Student code Supervisor : English for Finance and Accounting : 17522202010020 : M.A Pham Thi Lan Phuong Ha Noi-2021 DECLARATION I hereby declare that this is my own research work, the data and results stated in the graduation thesis are truthful, derived from the actual situation of the internship unit Graduation thesis author Đinh Thọ Phương Nam ABSTRACT This study looks at the operating methods of business capital use and management at Quang Ninh Agricultural Materials Joint Stock Company The article aims to find out the achievements and limitations in the company's activities and more importantly, propose the main methods to improve the efficiency of the company's working capital To achieve these goals, the graduate paper will examine the status of using business capital and managing that business capital effectively or not From the obtained results, the study gives the most practical meanings at Quang Ninh Agricultural Materials Joint Stock Company in order to improve the efficiency of management using business capital and improve business results at the company in the coming years ACKNOWLEDGMENTS First, I would like to express my most sincere thanks to Ms Pham Thi Lan Phuong - Dean of the Foreign Language Department of the Academy of Finance, the teacher who is in charge of guiding me to the graduation thesis The devotion in her comments and suggestions on her essay provided me with a lot of useful knowledge to apply in the construction of my research Without these instructions, comments, this essay will not be complete I would also thank the management board in Finance - Accounting Department, Organization Department of Quang Ninh Agricultural Materials Joint Stock Company have helped me to complete this thesis Finally, thanks goes to my family and friends who have always supported and encouraged me to complete this thesis TABLE OF CONTENT DECLARATION i ABSTRACT ii ACKNOWLEDGMENTS .iii TABLE OF CONTENT iv LIST OF FIGURES AND TABLES .vii INTRODUCTION CHAPTER 1: LITERATURE REVIEW 1.1 Business capital and business capital of the enterprise 1.1.1 Concept and characterization of business capital 1.1.1.1 Concept 1.1.1.2 Characterization .4 1.1.2 Composition of business capital 1.1.3 Source of business capital 1.1.3.1 Based on equity relations .8 1.1.3.2 Based on the time to mobilize and use capital .9 1.1.3.3 Based on the scope of capital mobilization 10 1.2 Business capital management of the business 10 1.2.1 Business capital management concept and goals .10 1.2.2 Content of business capital management 11 1.2.2.1 Working capital management of the business 11 1.2.2.2 Managing corporate fixed capital .14 1.2.3 The indicators to evaluate the business capital management situation of the enterprise 16 1.2.3.1 The criteria for evaluating the working capital management situation .16 1.2.3.2 Indicators for evaluating fixed capital management 17 1.2.3.3 Base on Corporate finance ( 2014) Criteria to evaluate the efficiency and efficiency of business capital use 17 1.2.4 Factors affecting business capital management of enterprises 18 1.2.4.1 Group of subjective factors 18 1.2.4.2 Group of objective factors 19 CHAPTER 2: THE STUDY 20 2.1 Overview of Quang Ninh Agricultural Materials Joint Stock Company .20 2.1.1 The formation of Quang Ninh Agricultural Material Joint Stock Company .20 2.1.2 Business characteristics of Quang Ninh Agricultural Materials Joint Stock Company 21 2.1.2.1 Main functions, business lines and products 21 2.1.2.2 Organization structure of the Company .22 2.1.2.3 Characteristics of business activities of the company: 23 2.1.2.4 An overview of the company's financial situation .25 2.2 Management of business capital at Quang Ninh agricultural material joint stock company 28 2.2.1 Business capital and source of business capital of Quang Ninh Agricultural Materials Joint Stock Company 28 2.2.1.1 Business capital situation .28 2.2.1.2 Business capital situation of Quang Ninh Agricultural Materials Joint Stock Company 30 2.2.2 Business capital management situation at Quang Ninh Agricultural Material Joint Stock Company 33 2.2.2.1 Working capital management situation 33 2.2.3 General assessment of business capital management of Quang Ninh Agricultural Material Joint Stock Company 38 2.2.3.1 Achievements .38 2.2.3.2 Limitations 39 CHAPTER 3: RECOMMENDATIONS .40 3.1 Recommendations to the Board of Directors of Quang Ninh Agricultural Material Joint Stock Company .40 3.1.1 Develop appropriate capital structure for the company and determine capital needs 40 3.1.2 Fully and timely mobilize capital to serve production and business 40 3.1.3 Modernizing internal information, paying attention to the lives of employees in the company 41 3.2 Recommendations to the Government: .42 3.3 Recommendations to the Company: 42 CONCLUSIONS 44 REFERENCES 45 APPENDIX 46 LIST OF FIGURES AND TABLE Table 2.1 OVERVIEW MOVEMENT OF ASSETS AND RESOURCES IN 2019 .25 Table 2.2 MOVEMENT OF SALES, EXPENSES, PROFIT 27 Table 2.3: CHANGE OF WORKING CAPITAL IN 2019 28 TABLE 2.4: CAPITAL MOVEMENT IN 2019 31 Table 2.5: WORKING CAPITAL ALLOCATION SITUATION 34 Table 2.6: INDICATORS REFLECTING SOLVENCY OF THE COMPANY 36 Table 2.7: SUMMARY OF EFFICIENT USE OF BUSINESS CAPITAL 37Y Figure 2.1: Proportion of current and current assets over the years 26 Figure 2.2: Proprotion of Liabilities and Equity over the years Diagram 2.1: Business process of Quang Ninh Agricultural Materials Joint Stock Company .25 Diagram 2.1: Organizational structure of Quang Ninh Agricultural Materials Joint Stock Company 46 INTRODUCTION Rationale of the study To conduct business activities, any business needs capital Business capital is considered the most important factor for businesses today Currently, when the economy is a market economy and the competition among enterprises is getting fiercer, the main solutions to enhance business capital management are vital issues for businesses, because Using capital effectively, businesses can create profits, accumulate it to develop their capital, create competition with competitors with financial potential So how to use capital effectively is an important content of financial management Recognizing the importance of the above problem, along with the theories learned and practical practice at Quang Ninh Agricultural Materials Joint Stock Company, I decided to choose the topic: “ Solutions to improve efficiency of business capital use and management at QUANG NINH Agricultural Material Joint Stock Company” as the subject of my graduation thesis Aims of the study This study aims to identify problems related to business capital, thereby offering solutions to enhance business capital management of enterprises, through indicators to assess the current situation of business capital management at Quang Ninh Agricultural Materials Joint Stock Company Methods of the study To collect data for this study, tools as observation, document review, questionnaire are used Table 2.5: WORKING CAPITAL ALLOCATION SITUATION Unit: million VND 31st December 31st December 2019 Up and down 2018 Amount of Propo Amount of Propor Amount TARETS money TOTAL CURRENT CAPTITAL I Money and amounts cash % 2,009.54 6.21% 71.91 23,274.24 % 51.28 customers Prepayment to the 11,935.56 % receivables Other receivables of money Ratio rtion 101.92 21,511.84 85.75% 10.855,21 665.50 9,976.47 % 1,164.94 5.01% 3.09% 50.46% 7,476.77 61.44% 37.76 0.31% 3,849.99 31.64% 804.17 6.61% 21.88 7,083.26 % 7,083.26 100% 1.344,04 201.96% 12,168.69 56.57% 11.105,55 197.27 0.85% 42.86 IV Inventory Inventory tion % 12.38 Short-term Receivables from seller Short-term internal money 90.57 32,367.04 equivalents III Receivables rtion Propo 4.458,78 91.26% % 59.64% 40.15% 159,52 422.50% 1.44% 6.126,48 159.13% 55.17% 360,77 44.86% 3.25% (- 13.72 8,572.46 39.85% 1.489,19) -17.37% (8,572.46 % 102.31 100% 1.489,19) -17.37% % 100% V Other short-term assets VAT is deductible 105.19 0.49% (-105,19) -100% -0.97% 105.19 100% (-105,19) -100% 100% (Source: 2019 Financial Statements Quang Ninh Agricultural Materials Joint Stock Company) Through the analysis table 2.5, it can be easily seen: working capital at the end of 2019 reached 32,367.04 million VND, an increase of 50.46% compared to the end of 2018, making working capital increase by a corresponding amount of 10,855.21 million VND 33 Cash and cash equivalents of the company as of December 31, 2019 reached VND 2,009.54 million, accounting for 6.21% of the total working capital, an increase of 3.12% compared to the beginning of the year Cash and cash equivalents in 2019 increased quite a lot with 201.69% compared to the beginning of the year By the end of 2019, short-term receivables reached 23,274.24 million VND, up 91.26%  accounts receivable from customers at the end of the year reached 11,935.56 million VND, increased 59.64% compared to the beginning of the year Comment: From the above analysis, it can be seen that the company's working capital allocation structure focuses mainly on accounts receivable and cash capital. The structure of working capital allocation has been adjusted by the company to be suitable for an enterprise with the type of agricultural business, with policies that contribute to rebalancing the working capital structure of the company in 2019 It can be said that last year, the company made many efforts in organizing and using working capital This change of capital in cash will change the solvency of the company, especially the ability to pay quickly To consider this issue, let's an in-depth analysis of the company's solvency: 34 Table 2.6: INDICATORS REFLECTING SOLVENCY OF THE COMPANY Unit: million VND Chỉ tiêu Short-term assets Short-term debt 3.Cash and cash equivalent Total accounting profit before tax 31st December 31st December 2019 2018 Difference 32,367.04 25,137.07 21,511.84 13,597.18 10,855.21 11,539.89 2,009.54 295,912.16 665.50 277,247.53 1,344.04 18,664.62 From Table 2.6, we can see that the company's ability to pay its due debts is decreasing, but it is still at an acceptable level  This index also shows that, with a dollar of short-term debt, the company can guarantee payment The ability of enterprises to immediately pay debts has increased But still much smaller shows that the company is in red alert for instant solvency The amount of cash in the fund increased It shows that the debt of the enterprise has increased, but the financial capacity of the enterprise is also higher, the company has increased financial autonomy, showing financial capacity but not enough to create confidence for investor 2019 is a year witnessing many advantages in the management of fixed capital of the company Most of the indicators reflecting the company's management and use of fixed capital have increased In the context of the economy facing many difficulties and illiquid real estate market, the effective use of fixed capital is very good, avoiding  the waste of capital in the company Besides, in the coming time, the company needs to focus on strengthening the management of fixed capital in their units so that they can use more rationally and effectively the fixed capital in the company contribute to improving the revenue, profit and   position of the company in the coming time Working capital consists of two components namely fixed capital and working capital As analyzed above about the 35 situation of the organization using, as well as the efficiency of using these two capital components, to evaluate in a more comprehensive and comprehensive way the efficiency and effectiveness of using Working Capital at the Company Quang Ninh Agricultural Materials Joint Stock Company, we need to evaluate the efficiency of using business capital as presented in Table 2.7 Efficiency of using business capital Table 2.7: SUMMARY OF EFFICIENT USE OF BUSINESS CAPITAL Targets Unit 2019 2018 Unit: Million VND Difference Amount of Ratio money Million Net sales VND Million 65,210.09 39,103.00 26,107.09 66.76% Net profit VND Million 268.13 260.09 8.05 3.09% Average working capital VND Million 30,411.22 25,065.11 5,346.11 21.33% Average equity VND Million 7,424.26 7,516.05 (91.79) -1.22% Profit before tax and interest VND Million 1,222.42 770.19 452.23 58.72% Profit before tax VND Million 295.91 277.25 18.66 6.73% Profit after tax VND 236.73 216.25 20.48 9.47% (Source: 2019, 2018 Financial Statements) 2019 is the year most businesses face many difficulties, the economy experiences many changes, especially the agriculture - forestry - fishery industries are facing many difficulties because of natural disasters and droughts Many companies business at a loss, falling into bankruptcy The company was also affected by this storm of crisis The coefficients to evaluate the efficiency and efficiency of the company's working capital have increased 36 but are very small, showing that the business capital management situation of the enterprise is still kept at a low level, there is improvement, but efforts are needed so many, so much Indicators reflecting the company's profitability in 2019 generally had slight fluctuations compared to 2018 but were still at a very low level In summary, when considering the use of business capital of Quang Ninh Agricultural Materials Joint Stock Company in 2019, it is possible that the company's capital has been used more effectively in terms of working capital The company needs to manage revenue as well as costs better to improve capital efficiency as well as business efficiency 2.2.3 General assessment of business capital management of Quang Ninh Agricultural Material Joint Stock Company 2.2.3.1 Achievements  In the past year, although the economy has many fluctuations in raw material prices, as well as increasing competition for products of the same type in the market, it has also caused certain   difficulties for the production and business activities of enterprises Along with good business results, which always generate high profits, the company has constantly grown its assets: total assets have continuously increased for years   (2017 was 25,044.16 million VND, 2018 was 25,086.07 million VND, in 2019 it is 35,376.37 million VND) With the right and dynamic directions, the company has been creating more opportunities in production and business activities both domestically and internationally 2.2.3.2 Limitations Technical facilities for management have not been properly invested: there is a lack of specialized high-tech software such as warehouse management, financial management, sales management from there to work 37 management has encountered many difficulties, leading to the results not being maximized as expected Asset management and use policies have not taken full advantage of the effectiveness that assets can bring   Human resources, highly qualified staff and staff are still lacking, especially those with experience in the foreign trade forwarding industry In general, the Company has made many positive efforts in production and business activities, so the company's production and business activities are very effective, but there are still shortcomings that the company needs to overcome.  To make the company's operations more efficient, the company must actively strive to further improve the efficiency of the organization and use of business  capital, preserve and develop capital to maintain and develop production capacity, improve life of employees, staff 38 CHAPTER 3: RECOMMENDATIONS 3.1 Recommendations to the Board of Directors of Quang Ninh Agricultural Material Joint Stock Company To achieve the set targets in difficult circumstances, the Board of Directors and the entire company need to make outstanding efforts in production and business activities and  the management and use of business capital As analyzed through the above items and through the collected data, I would like to provide some suggestions to improve the business capital use and management as follow: 3.1.1 Develop appropriate capital structure for the company and determine capital needs In the current business conditions, all labor needs for business activities and enterprises must be self-financed Therefore, the correct and reasonable determination of regular working capital needs is even more important Because the needs of the  necessary micro-organisms are determined properly and reasonably, it is the basis for a good organization of funding sources At the same time, in order to promptly and fully meet working capital for the business activities of the enterprise to proceed normally and continuously This is a very difficult job and requires analysts to be sharp, experienced in data collection and processing However, doing this job well is a very important premise  for the company to be proactive in mobilizing funding sources, minimizing incurred financial costs, avoiding capital waste, and contributing to improving the quality of life effective use of working capital 3.1.2 Fully and timely mobilize capital to serve production and business To ensure that its business operations are continuous and stable, it requires the company to have working capital funding sources suitable to the characteristics of each type of capital Determining the source of funding for each type of capital will ensure that the company uses capital flexibly, 39 minimizing the cost of capital,  contributing to improving the efficiency of capital use for the company In terms of banks If the company simultaneously reduces lending interest rates, next year the company needs to adjust its capital structure and financing policy to be able to take advantage of financial leverage To be able to meet the requirements set forth, the company can use measures such as: Mobilizing short-term and long-term loans from credit institutions; joint ventures with other companies in the same field, especially foreign companies, not only help the company reduce capital difficulties, but also can absorb, learn from experience, access professional qualifications advanced production, creating high quality products, increasing competitiveness in the domestic market and entering foreign markets; and lease, mortgage, pledge, liquidate, and sell assets that the company no longer uses or is no longer suitable with the company's production and business processes in order to preserve capital previously invested as well as additional capital into the business 3.1.3 Modernizing internal information, paying attention to the lives of employees in the company Modernizing the information system and strengthening internal management will help the company improve the efficiency of business operations management, directly contributing to improving the efficiency of business capital management.  In order to improve the staff's capacity of the enterprise, the company should offer incentives in recruitment such as salary, bonus, allowance, work experience, regularly fostering and improving working capacity through training sessions training at home and abroad or sending qualified professional staff to work at the enterprise to improve the professional skills of employees Accordingly, the company should carry out the following solutions: 40 First, implementing good management and supervision of the use of business capital, take advantage of all idle capital to put into business activities and financial investments, contributing to improving business efficiency, preserving and developing capital Second, sending officials to attend bachelor's classes in politics, providing advanced training for drivers, machine operators, equipment repair workers, and organizing learning about occupational hygiene for all employees officers and employees of the whole company, organize training and refresher courses Third, paying attention to the life of employees in the company It is necessary to have a proper incentive and reward system for officials and employees with achievements in production and business in order to encourage and encourage creativity for employees At the same time, from their proper attention, motivates them to improve their sense of responsibility and attachment to the company 3.2 Recommendations to the Government: First, create conditions for businesses to supplement capital, for businesses to business effectively Only in this way can businesses improve the efficiency of using business capital, thereby increasing revenue and profit Second, for businesses that business effectively but lack capital, the State should pay attention and pay attention to supplementing capital for these businesses by regulating profits from businesses that not need additional capital through exemption from corporate income tax Third, the Government needs to have more open policies, loosen investment procedures, limit cumbersome procedures for bidding documents, have interest rate policies so that businesses can save a lot of money costs while seizing business opportunities 3.3 Recommendations to the Company: 41 First, the company needs to strengthen the self-inspection and supervision, closely combine the assurance of the State's financial regime and the implementation of the internal spending contract to minimize product costs, increase production and business efficiency Strengthening the debt collection work to completely settle the due debts and overdue debts Second, the company should encourage training, raising awareness, and skills among officials and employees in areas such as improving employee education levels, improving employees' political and legal knowledge, and improving employees' foreign language and informatics knowledge Ensure that human resources are a long-term strategic benefit for businesses Finally, the organization should create a strategy to recognize individuals and groups of departments that contribute to the company's growth in realistic and effective ways 42 CONCLUSIONS In the context of Vietnam opening up and joining with the world economy, businesses that want to survive and develop sustainably must have new strategies and management methods to seize business opportunities as well as catch up with changes in the market To that, businesses always have to try their best in every activity In which, one of the important contents is effective business capital management Business capital is not only a prerequisite for the establishment of a business, but it is also one of the factors that plays a decisive role in the operation and development of the business Well-organized business capital management helps businesses maximize profits, improve the value of the business Recognizing the importance of the above issue, in recent years Quang Ninh Agricultural Materials Joint Stock Company has continuously taken measures to strengthen business capital management and has achieved remarkable results Besides the achievements, the company still has some limitations in working capital management Therefore, in the coming time, the company needs to make efforts to overcome the shortcomings and limitations in order to increasingly improve business capital management, contributing to increasing profits and sustainable development in the future Through the time of practical research along with the knowledge equipped in school, I have studied the situation of business capital management at Quang Ninh Agricultural Materials Joint Stock Company, I boldly come up with some solutions to strengthen the management of working capital of the Company I hope that these solutions will make practical contributions to the company's capital management in the coming time 43 REFERENCES MA.Luu Huu Duc, PhD.Nguyen Thi Ha, PhD.Pham Thanh Hoa, MA.Ngo Thi Kim Hoa, MA.Dang Phuong Mai, PhD.Bui Van Van Corporate finance ( 2014) David Begg, Rudiger Dornbusch, Stanley Fischer Economics (1994) PhD Vu Van Ninh, PhD Bui Van Van, Financial Publisher Coporate finance textbook (2013) PhD Bach Duc Hien, PhD Nguyen Dinh Kiem Financial Publisher Business finance textbook (2010) PhD Nguyen Minh Kieu , Labour and Social Publisher Basic coporate finance (2013) PhD Nguyen Trong Co, PhD Nguyem Thi Ha Corporate financial analysis course (2010) 44 Director APPENDIX Diagram 2.1: Organizational structure of Quang Ninh Agricultural Materials Joint Stock Company Planning Planning Sales Sales Departm Departm ent ent Dong Dong TrieuB TrieuB ranch ranch Accounti Accounti ng ng Depart Depart ment ment Yen Yen Hung Hung Uong Uong Bi Bi Branch Branch Tien Tien Yen Yen Branch Branch Wareho Wareho use use Depart Depart ment ment Branc Branc hh Binh Binh Lieu Lieu Branch Branch * Note: Direction relationship ; 45 Van Van Don Don Branch Branch Hoanh Hoanh Bo Bo Branc Branc hh Dam Dam Ha Ha Branch Branch Hai Hai Ha Ha Branch Branch Working relationship Mong Cai Branch SUPERVISOR’S JUDGEMENT Supervisor: M.A Pham Thi Lan Phuong Student: Đinh Thọ Phương Nam Group: 51.01 Intake: CQ 55 Topic: “SOLUTIONS TO IMPROVE EFFICIENCY OF BUSINESS CAPITAL USE AND MANAGEMENT AT QUANG NINH AGRICULTURAL MATERIAL JOINT STOCK COMPANY” 1 Mark: - In number: - In word: Supervisor 46 CRITIC’S JUDGEMENT Critic: Student: Đinh Thọ Phương Nam Group: 51.01 Intake: CQ 55 Topic: “SOLUTIONS TO IMPROVE EFFICIENCY OF BUSINESS CAPITAL USE AND MANAGEMENT AT QUANG NINH AGRICULTURAL MATERIAL JOINT STOCK COMPANY” 1 Mark: - In number: - In word: Critic  47 ... Overview of Quang Ninh Agricultural Materials Joint Stock Company 2.1.1 The formation of Quang Ninh Agricultural Material Joint Stock Company Quang Ninh Agricultural Material Joint Stock Company. .. sign of the business 2.2.1.2 Business capital situation of Quang Ninh Agricultural Materials Joint Stock Company To have a more overview of the organization and use of business capital in Quang Ninh. .. Overview of Quang Ninh Agricultural Materials Joint Stock Company .20 2.1.1 The formation of Quang Ninh Agricultural Material Joint Stock Company .20 2.1.2 Business characteristics of Quang