ANALYSIS OF FINANCIAL STATEMENTS AT HOA PHAT GROUP JOINT STOCK COMPANY IN 2019 2020

Goals and meaning of financial statements

This article aims to explore the financial data of Hoa Phat Group Joint Stock Company by analyzing its basic financial statements within the context of a market economy It examines the factors influencing the company's financial condition and assesses its current financial status, highlighting both strengths and weaknesses Based on this analysis, the article proposes solutions to enhance the financial capacity of Hoa Phat Group Joint Stock Company.

The meaning of financial statements:

Financial activities are closely linked to production and business operations, meaning that all business activities directly affect a company's finances Conversely, a company's financial health can significantly influence its production and business processes Consequently, analyzing financial statements is crucial for both business owners and external stakeholders involved with the company's finances.

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Internal financial analysis is crucial for enterprises, as it provides financial analysts with the comprehensive information needed to effectively evaluate the company's financial health Corporate managers must focus on multiple objectives, including job creation, enhancing product and service quality, minimizing costs, and environmental protection Achieving profitability and managing debt are essential for meeting these goals Consequently, business managers require detailed insights to maintain financial balance and assess past performance, profitability, solvency, debt repayment, and financial risks Additionally, this information guides the financial management team's decisions regarding investments, financing options, and dividend yield analysis.

Investors are primarily concerned with payback, profitability, capital insolvency, and risk, necessitating detailed information on financial conditions, operational performance, business results, and growth potential Additionally, they seek insights into management practices, as effective management enhances safety and efficiency, ultimately fostering investor confidence.

For lenders and suppliers of goods to businesses:

Concerns regarding a business's debt repayment capability often arise from a thorough analysis of its financial statements Stakeholders focus on the liquidity of the business, particularly the cash and assets that can be quickly converted into cash, to assess its immediate solvency.

For state agencies such as tax and finance agencies and employees for enterprises:

Analyzing financial statements reveals a business's financial health and enables accurate tax rate calculations, which helps the Finance Agency and governing bodies implement more effective management strategies Additionally, stakeholders such as business owners, investors, and employees share similar information needs, as these insights are crucial for understanding their rights, responsibilities, and the implications for current and future customers.

The analysis of financial statements is crucial for managers operating in a market economy, as it provides essential insights that are interconnected and vital for informed decision-making.

Financial statement analysis is an essential tool for evaluating a business's economic value, identifying its strengths and financial weaknesses This analysis enables managers to uncover both objective and subjective factors, guiding them in making informed decisions aligned with their strategic goals Consequently, it serves as a powerful resource for business managers to enhance operational efficiency and achieve optimal results.

Sources of information used for financial statement analysis

information from the balance sheet

A balance sheet is a comprehensive financial statement that provides a snapshot of a company's assets at a specific point in time, presented in monetary terms based on the valuation of those assets and the sources of their funding.

The CSC table serves as a crucial tool for assessing the overall business situation and performance, evaluating capital utilization, and understanding the financial and economic outlook of the enterprise.

Reviewing the "Assets" section provides insights into the capacity and utilization of a business's resources, highlighting the potential that the enterprise can manage for long-term benefits In contrast, the "Capital" section offers a glimpse into the financial health of the business, reflecting its legal obligations regarding the total registered capital with the State This includes understanding the assets acquired through bank loans and other borrowings, as well as the responsibilities to repay debts owed to employees, shareholders, suppliers, and the government.

The SSC is organized like a balance sheet, featuring accounting accounts and targets tailored to management needs It comprises two main sections: the asset section, which indicates the value of assets, and the capital section, which shows the sources of asset formation These sections can be arranged either side by side or in a top-and-bottom format Each section includes a total, and the totals of both parts are always equal, reflecting the accounting equation principle that asserts assets must equal their sources.

2.2 Sources of information from business results reports

The business results report provides a comprehensive overview of the company's performance, detailing outcomes from core business operations as well as insights from supplementary financial activities.

The report on business results has the following effect:

The analysis and evaluation of the plan's implementation involve estimating production costs, capital expenses, and revenue generated from goods consumption Additionally, it is essential to assess the cost situation and income from other activities, alongside the corresponding results of each operational segment.

- Assess the development trend of the business, take measures to exploit the potential as well as limit overcoming future existences.

The business results report offers a comprehensive overview of an enterprise's financial performance, detailing revenues, expenses, and profits or losses from both regular and non-standard business activities during a specific period It also includes an analysis of corporate income tax expenses and the net profit for that timeframe.

2.3 Sources of information from the cash flow statement

Cash flow statements are essential elements of corporate financial reporting, offering insights that enable users to evaluate changes in net assets and financial structure They also assess a company's capability to convert assets into cash, its solvency, and its ability to generate cash flows throughout its operations.

The cash flow report is essential for evaluating an enterprise's cash flow status, assessing the accuracy of previous cash flow predictions, and analyzing the connection between profitability and net cash flow Additionally, it aids in forecasting the potential size, duration, and speed of future cash flows, offering valuable insights for management decision-making.

* The main effect of the cash flow statement is:

- Provide information to assess the ability of the business to generate money, cash equivalents and needs in the use of funds.

- Provide information to the subjects using the analysis report evaluating the time as well as the certainty of generating funds in the business.

- Provide information on sources of money formed from business activities, financial investment activities to assess the impact of such activities on the financial situation of the business.

- Provide information to assess the solvency and determine the money needs of the business in the next period of operation.

Methods in financial statement analysis

The comparison method is a widely utilized technique in both economic and financial analysis When employing this method, it is essential to focus on key considerations to ensure accurate and meaningful results.

- At least two quantities must exist.

- Quantities (indicators) must ensure comparison It is the unity of economic content, on the method of calculation, the agreement on time and units of measurement.

Second, identify the original root comparison of comparative origin depending on the purpose of the analysis Concrete:

To assess the trend and growth rate of the analysis target, we establish a baseline by referencing its value from a prior period, typically the previous year or a series of earlier periods This allows us to effectively compare the current mid-term target against its past performance, analyzing this year's data in relation to last year or earlier timeframes.

To understand the transformation of financial phenomena, it is essential to analyze long-term data sources and select a representative year for comparison By examining fluctuations over time and applying the law of large numbers, we can identify cyclical patterns that indicate volatility in the financial landscape.

When evaluating the achievement of established objectives and tasks, it is essential to compare the actual outcomes against the planned estimates and analytical targets This comparison not only measures the success of the objectives but also assesses the effectiveness of forecasting and financial planning processes.

When assessing the position and ranking of businesses, the initial comparison is based on the average financial metrics of the industry, established standards and rating criteria from evaluation organizations, as well as professional rankings and analytical indicators from competitors.

Third: The commonly used comparison technique is absolute numerical comparison, relative numerical comparison, vertical comparison, horizontal comparison

- Compare by absolute number to see the absolute numerical fluctuation of the analytical indicator (CTPT)

To effectively evaluate the financial health and operational efficiency of enterprises, it is essential to analyze relative numbers and financial ratios rather than solely relying on available financial statement data By comparing indicators such as solvency, profitability, and asset utilization, businesses can gain valuable insights into their economic relationships Financial ratios provide a clearer understanding of the connections between various items in financial statements, enabling a comprehensive assessment of performance trends and capital rotation speed This analytical approach allows for a more informed evaluation of an enterprise's financial situation.

Vertical comparison, or vertical analysis technique, involves assessing the relative size of each department in relation to the entire organization or comparing one segment to another This method evaluates the structural and proportional relationships among various elements within a whole, highlighting the interactions between two or more components.

- Horizontal comparison (also known as horizontal analysis technique) is the comparison of each indicator over time or in different dimensions that have similarities.

The exclusion method is utilized to assess the impact of individual independent factors on a research target, assuming that other factors remain constant This approach includes two variations: the continuous replacement method and the difference number method, both of which help in analyzing the effect of specific factors on analytical indicators.

3.3 Application of Dupont financial model - ROA

The Dupont financial model is a valuable tool for examining the relationships between various factors that impact financial indicators By analyzing these connections, analysts can identify the key factors influencing their targets in a logical sequence, enabling them to understand underlying causes and address potential weaknesses effectively.

The Dupont financial model is a valuable tool for assessing key financial metrics such as return on total assets (ROA) and return on equity (ROE) By focusing on ROA, this model provides insights into how effectively a company utilizes its assets to generate earnings.

To enhance the profitability of a co-asset utilized by the enterprise, it is essential for corporate governance to analyze and evaluate the factors influencing performance.

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The Dupont model plays a crucial role in financial analysis for corporate governance by providing an in-depth and comprehensive evaluation of business performance It enables a thorough and objective assessment of the factors influencing this performance, leading to the development of precise and authentic strategies aimed at enhancing business management Consequently, this approach contributes to the continuous improvement of a company's efficiency in future operational periods.

The balanced relationship method focuses on maintaining equilibrium between the quantities of two elements within a business process This method analyzes factor indicators by comparing totals or differences over specific periods, such as actual versus planned or current versus previous periods By utilizing the balanced contact method, businesses can assess the impact of each factor's variation across different time frames and independent variables.

Content of financial statement analysis

4.1 General analysis of the financial situation of the enterprise.

A comprehensive analysis of a company's financial situation involves evaluating its overall financial health to determine whether it is positive or negative This assessment is based on key criteria that provide valuable insights into the enterprise's financial standing.

4.1.1 General assessment of the capital mobilization situation of enterprises

The year-end fluctuation in total capital sources, compared to the beginning of the year and adjacent years, serves as a key indicator of an enterprise's ability to organize and raise capital However, this fluctuation alone does not provide a complete picture of the enterprise's financial health due to various influencing factors Therefore, it is essential to analyze these fluctuations in conjunction with the capital structure to draw accurate conclusions about the enterprise's financial situation.

Analysts evaluated the growth trend of capital by comparing the original relative number (yi/y0; i=1,2, ,n), allowing for an assessment of the total capital's growth rate over time using a fixed root period.

Analysts assess the consistency of capital growth over different periods by employing a continuous numerical comparison method, specifically the formula yi/y(i-1) This approach allows for a thorough evaluation of the enterprise's capital mobilization in relation to its actual circumstances.

4.1.2 General assessment of the level of financial independence of enterprises

The financial autonomy and independence of a business indicate its capacity to make and control decisions regarding its financial and operational policies Analysts commonly assess the level of financial independence using specific key indicators.

The funding coefficient is a key indicator of a business's financial self-assurance and independence, reflecting the proportion of equity within its total capital sources A higher funding coefficient signifies greater financial self-assurance and independence, while a lower value indicates diminished financial stability and reliance on external funding.

The long-term asset self-financing ratio, also known as the equity-to-long-term asset ratio, measures a company's ability to finance its long-term assets using its own equity This key financial indicator provides insight into the financial health and stability of an organization.

A high long-term self-financing coefficient indicates a significant investment of equity in long-term assets, which enhances financial stability for the business However, this focus on long-term investments may lead to lower overall business efficiency, as less capital is allocated to revolving operations that drive profitability.

Fixed asset self-financing coefficient (Equity-to-fixed asset ratio): is a criterion that reflects the ability to meet the fixed asset division (already invested) with equity.

Fixed assets, representing a company's long-term investments in facilities and technology, are not easily liquidated or transferred Therefore, when a company faces the need to divest these assets, it must carefully evaluate the most viable options available.

4.2 Analysis of financial structure and the situation of ensuring capital sources for production and business activities

Financial structure analysis is the evaluation of the rationality of the capital structure in relation to the asset structure of the enterprise Analyzing capital funding policies helps the

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Analyzing the financial structure is essential for corporate managers to identify the strengths and weaknesses of their current financial framework, enabling them to optimize it effectively Furthermore, this analysis aids in recognizing potential financial risks, allowing business leaders to implement timely solutions and mitigate unnecessary threats to the organization.

Lenders evaluate a business's financial structure to determine credit risk before approving loans, focusing on the relationship between capital and assets to gauge the company's ability to cover debts in potential bankruptcy scenarios Additionally, state managers scrutinize enterprise financial structures to mitigate economic instability caused by inefficient businesses and excessive debt, which pose risks of default and bankruptcy.

- Analyze the relationship between assets and capital sources.

4.3 Analysis of debt shape and solvency

In a competitive market economy, the increasing complexity of financial relationships often leads to the appropriation of capital among enterprises Therefore, analyzing receivable and payable debts is crucial for identifying potential financial risks As businesses operate independently in their financial activities, understanding the structure of receivables is essential for devising effective recovery strategies Simultaneously, a thorough examination of payables can facilitate timely payment measures, ultimately enhancing capital efficiency.

Receivables of the enterprise include: Receivables of customers, upfront payments to sellers, other receivables, When analyzing receivables, using a vertical comparison method,

TIEU LUAN MOI download : skknchat@gmail.com take each specific receivables in turn divided by the total receivables to determine their proportion of the total receivables:

To achieve a detailed analysis of asset structure, it is essential to integrate both vertical and horizontal analysis This approach allows for a comprehensive examination of each receivable amount, aligning it with the asset structure analysis table template.

By conducting thorough analyses, managers can develop effective policies for timely debt recovery tailored to each receivable This approach minimizes capital misappropriation and enhances overall business efficiency.

Customer receivables represent a significant portion of a business's assets and have crucial implications for its financial health Analysts typically assess these receivables by comparing end-of-term figures with beginning-of-period numbers to evaluate their scale, fluctuation speed, and structure This analysis enables managers to make informed decisions, such as enhancing oversight of individual customer receivables and developing tailored promotional and discount strategies for specific customer segments.

Customer acquisition analysis, analysts often use the following indicators:

Number of rounds receivable to customers:

Average customer receivable debt is calculated as follows:

Company name and address

- Company name: Hoa Phat Group Joint Stock Company

- English name: Hoa Phat Group

- Head office: Pho Lien A Industrial Park, Giai Pham Commune, Yen My District, Hung Yen Province

- Official website: http://www.hoaphat.com

- Charter capital: VND 44,729,227,060,000 (extracted on September 9, 2021)

Main business lines

- Trading in iron and steel.

- Production of construction machinery and equipment

- Production of office furniture, family, school, business

- Synchronous investment and construction of infrastructure, engineering of industrial parks and urban areas

History of formation and development

- 1992: Establishment of Hoa Phat Parts Equipment Co., Ltd.; The first company was branded Hoa Phat.

- 1995: Establishment of Hoa Phat Furniture Joint Stock Company.

- 1996: Establishment of Hoa Phat Steel Pipe Co., Ltd.

- 2000: Establishment of Hoa Phat Steel Joint Stock Company, now Hoa Phat Steel One Member Co., Ltd.

- 2001: Establishment of Hoa Phat Refrigeration Co., Ltd.

- 2001: Establishment of Hoa Phat Urban Construction and Development Joint Stock Company.

- 2004: Establishment of Hoa Phat Trading Co., Ltd.

- January 2007: Restructuring according to the Group model, with the parent company being Hoa Phat Group JOINT STOCK COMPANY and its member companies.

- June 2007: Establishment of Hoa Phat Mineral Joint Stock Company.

- August 2007: Establishment of Hoa Phat Steel Joint Stock Company, deploying the iron and steel production complex in Kinh Mon, Hai Duong.

- 15/11/2007: Listed HPG shares on the Vietnamese stock market.

- June 2009: Acquisition of An Thong Mineral Investment Joint Stock Company.

- June 2009: Acquisition of Hoa Phat Energy Joint Stock Company.

- December 2009: Hoa Phat Iron and Steel KLH completes phase 1 investment.

- July 2010: Golden Gain Vietnam JOINT STOCK COMPANY becomes a member company.

- January 2011: Structure of the parent company's operating model with the separation of the steel production and business segment.

- January 2012: Implementation of phase 2 of the iron and steel production complex in Kinh Mon, Hai Duong.

- August 2012: Hoa Phat Group celebrates 20 years of establishment and development.

- February 25, 2015: Increase the charter capital to VND 4,886 billion.

- April 26, 2017: Increase the charter capital to VND 12,642,554,170,000.

- July 10, 2018: Increase the charter capital to VND 21,239,071,660,000.

- July 4, 2019: Increase the charter capital to VND 27,610,741,150,000.

- September 1, 2020: Increase the charter capital to VND 33,132,826,590,000.

- June 30, 2021: Increase the charter capital to VND 44,729,227,060,000.

Extracts from Finance.Vietstock.vn

Organization chart

Figure 1: Hoa Phat Group organization diagram

Shareholder structure

Figure 2: Hoa Phat Group's shareholder structure

Board of Directors

Duty of Degree Stock and name time birth

Mr Tran Dinh Chairman of 1961 Bachelor of 1,166,400,000 1992

Long the Board of Economics

Mr Doan Gia Vice 1963 Master of 56,066,315 1999

Cuong Chairman of Business the Board of Administration Directors

Mr Nguyen Vice 1962 Bachelor of 101,449,929 1996

Manh Tuan Chairman of Economics the Board of Directors

Mr Tran Tuan Vice 1963 Bachelor of 103,471,308 1992

Duong Chairman of Economics the Board of Directors

Ms Nguyen Deputy 1973 Bachelor of 859,909 1998

Ms Pham Thi Chief 1982 Economic 28,856 2008

Ms Bui Thi Head of 1979 Bachelor of 2008

Ms Le Minh Member of Bachelor of N/A

Ms Ngo Lan Member of Bachelor of 1,100 N/A

Ms Thai Thi Member of Bachelor of N/A

Assessing the efficiency of hoa Phat's fixed capital use in 2019 and 2020

1.1 Efficiency of using fixed capital in 2019, 2020

Table 1: Efficiency of using fixed capital of Hoa Phat Group

7 Original price of fixed assets 67.405.566 127.104.107 59.698.541 88,57%

(6,919,444) 29,60% and accounting of fixed assets (23,373,512) (30,292,956)

1.2 Commenting and evaluating the effectiveness of using fixed capital

In which: Average fixed capital = fixed capital avg đầu ky +fixed capital avg cuoi ky 2

In 2020, Hoa Phat Company experienced a significant improvement in fixed capital efficiency, increasing by 20.39% compared to 2019, which translates to an additional revenue of VND 0.21 per unit of fixed capital This means that each unit of fixed capital in 2020 generated more revenue than in the previous year, highlighting the company's enhanced operational effectiveness.

- Fixed capital content: Reflected to get 1 dong of revenue, it is necessary to invest

VND 0.98 of fixed capital in 2019 By 2020, the fixed capital content will decrease by 16.94% corresponding to VND 0.17.

- Fixed capital return: This target indicates that an average of 1 fixed capital generated

In 2019, the profit margin from fixed capital was VND 0.122, which rose to VND 0.185 in 2020, reflecting a significant increase of 51.57% or VND 0.06 This upward trend in profit margins indicates an improvement in the quality and efficiency of fixed capital investments.

The fixed asset wear factor indicates the level of wear and tear on fixed assets during assessment compared to their initial investment In 2019, the wear and tear factor stood at 0.35, reflecting that the fixed assets of enterprises were relatively new and modern However, by 2020, this coefficient increased to 0.24, highlighting a noticeable wear and tear of Hoa Phat's fixed assets over the course of just one year.

Assessing the efficiency of hoa Phat's working capital use in 2019, 2020

2.1 Efficiency of using working capital in 2019, 2020

Table 2: Efficiency of using working capital of Hoa Phat Group

2 Vốn lưu động bình quân 27.872.831 43.592.097 15.719.266 56,40%

4.Vòng quay vốn lưu động = (1)/(2) 2,28 2,07 - 0,21 -9,36%

5 Kỳ luấn chuyển vốn lưu động = 360/(4) 157,63 173,91 16,29 10,33%

6 Hàm lượng vốn lưu động 0,44 0,48 0,040 9,09%

7.Hiệu suất sử dụng vốn lưu động = (1)/(2) 2,28 2,07 - 0,22 -9,48%

8 Tỷ suất lợi nhuận vốn lưu động (%) = (3)/(2) 27,19% 30,98% 0,04 13,94%

2.2 Commenting and evaluating the effectiveness of using working capital

In which: Average Working capital = VL D bq đầu k ì +VL D bq cuối kỳ

- Working capital rotation: Reflecting the company performing 2.28 rotations in

In 2019, Hoa Phat's working capital rotations were significantly higher, but by 2020, this figure decreased to 2.07, reflecting a 9.48% decline or a reduction of 0.22 rotations This decline indicates that the company is facing challenges related to inventory volume, necessitating a strategic shift in its business operations.

The working capital rotation measures the duration it takes for a business to cycle through its working capital A lower ratio signifies better efficiency In 2020, the working capital rotation period increased to 174.14 days, up from 157.63 days in 2019, indicating a slowdown in working capital management compared to the previous year.

- Working capital content: In 2019, to generate 1 vnd of revenue needs 0.44 VND working capital In 2020 to generate 1 dong of revenue, it is necessary to 0.48 VND Working capital.

In 2020, Hoa Phat experienced a 9.48% decline in working capital performance compared to 2019, resulting in a decrease of VND 0.22 This indicates that each unit of working capital generated less revenue in 2020 than in the previous year The reduction in efficiency can be attributed to the adverse effects of the COVID-19 pandemic on business operations.

- Working capital profit margin: From the above calculation data, we see that in

2020, the company's VLD is more effective than 2019 as shown by the increase in the profit margin of VLD In 2019, this rate is 27.19% compared to 30.98% in 2020 This means that in

2019, for every 100 VND spent, 27.19 Profit after taxes

TIEU LUAN MOI download : skknchat@gmail.com will be collected Meanwhile, in 2020, for every 100 VND spent, 30.98 Profit after taxes will be collected.

Figures from [ CITATION Newspaper191 \l 1033 ], CITATION Newspaper201 \l 1033 ]

Capital structure and capital formation sources in 2020

Capital sources are financial relationships through which businesses can exploit or raise a certain amount of money to invest assets.

Figure 3: Capital structure of Hoa Phat from 2015-2020

In 2020, the Group's financial structure demonstrated stability, with equity rising by 24% from VND 47,787 billion to VND 59,220 billion due to profit streams generated during the year While the liabilities-to-equity ratio exceeded 1, the bank loan debt-to-equity ratio remained manageable at 0.91 times.

Figure 4: Hoa Phat's debt coefficient from 2018-2020

The current net bank loan-to-equity ratio is 0.54 times, reflecting a low average use of financial leverage Despite achieving the highest bank loan milestone to date, the increase remains within a safe level, ensuring the Group's strong resilience moving forward Additionally, net cash flow from business activities has risen by 17% compared to the same period last year, signaling an improvement in Hoa Phat's financial health.

Figure 5: Hoa Phat's solvency coefficient from 2018-2020

As of the end of 2020, the company's solvency ratio stands at 1.09, reflecting an improved ability to meet short-term liabilities compared to 2019, with a payment speed of 0.54 times Additionally, the consistent payout ratio above 1 demonstrates the Group's strong capacity to cover its short-term obligations effectively.

Table 3: Capital statistics of Hoa Phat in 2019 and 2020

Phải trả người bán ngắn hạn 7.507.198 10.915.752 3.408.554 45,4%

Người mua trả tiền trước ngắn hạn 408.691 1.257.272 848.581 207,6%

Thuế và các khoản phải nộp NN 478.426 548.579 70.153 14,7%

Phải trả người lao động 247.936 313.099 65.163 26,3%

Chi phí phải trả ngắn hạn 429.777 640.129 210.352 48,9%

Doanh thu chưa thực hiện ngắn hạn 27.406 34.564 7.158 26,1%

Phải trả ngắn hạn khác 237.391 328.061 90.670 38,2%

Dự phòng phải trả ngắn hạn 3.111 5.846 2.735 87,9%

Quỹ khen thưởng, phúc lợi 806.604 1.133.445 326.841 40,5%

Phải trả người bán dài hạn 6.652.492 2.637.987 -4.014.505 -60,3%

Chi phí phải trả dài hạn 427.328 223.664 -203.664 -47,7%

3.2 Sources of capital formation in 2020

According to the source of capital formed

Divided by source of formation, hoa Phat Group's capital in 2020 includes equity and liabilities In it:

- In 2020, the equity source (which is the capital spent by the business owner in the form of capital contribution, equity ) reached VND 59,219,786,306,111 on December 31,

2020, an increase of 23.9% compared to December 31, 2019.

- Hoa Phat's liabilities in 2020 reached VND 72,291,648,082,726 , an increase of VND18,302,254,126,521 or 33.9% compared to December 31, 2019.

Over time mobilized and used

Divided by the time of mobilization and use, hoa Phat Group's capital in 2020 includes temporary capital and regular capital In it:

- In 2020, Hoa Phat's temporary capital (short-term capital, meeting temporary capital needs) reached VND 51,975,217,447,498, an increase of 92.6% compared to the temporary capital in 2019.

- Regular capital sources (long-term capital sources of a stable nature, used in production and business activities) of enterprises decreased compared to December 31, 2019, to VND 20,316,430,630,228 equivalent to 24.8%.

Divided by the scope of mobilization, hoa Phat Group's capital in 2020 includes internal and external capital sources In it:

- In 2020, the internal capital (which is the capital mobilized from production and business activities) of Hoa Phat reached million VND 21,792,442, an increase of

As of December 31, 2019, Hoa Phat has demonstrated a strong self-financing ability, with an internal capital increase of 37.2% compared to the previous year This growth not only helps in saving capital costs but also allows the company to maintain control over its operations and reduce the pressure of timely debt repayments.

In 2020, Hoa Phat's external capital, sourced from various activities, increased significantly to 70,845,102 million VND, up from 52,934,852 million VND on December 31, 2019 This represents a remarkable growth of 33.8% in the company's internal capital over the course of one year.

Specifically, hoa Phat's capital formation sources in 2020 are shown in the following table:

Table 4: Sources of capital of Hoa Phat in 2020

Nguồn hình thành nên nguồn vốn

Theo nguồn vốn hình thành Theo thời gian huy động và sử dụng Theo phạm vi huy động Vốn chủ sở hữu Nợ phải trả NV tạm thời

NV bên trong NV bên ngoài xuyên

2 Người mua trả tiền trước x x x

3 Thuế và các khoản phải nộp NN x x x

4 Phải trả người lao động x x x

5 Chi phí phải trả ngắn hạn x x x

6 Phải trả ngắn hạn khác x x x

7 Vay và nợ thuê tài chính ngắn hạn x x x

8 Dự phòng phải trả ngắn hạn x x x

9 Quỹ khen thưởng phúc lợi x x x

10 Vay và nợ thuê tài chính dài hạn x x x

12 Quỹ đầu tư phát triển x x x

Capital financing plans for the company

From Hoa Phat's capital statistics report (2019 - 2020), we see an increase in the cost of using equity over two years, specifically in 2020 increased

23.9% compared to 2019 In which equity increased by 20%, proving the effective use of equity capital, creating a relative profit for the business.

In addition, we also see that the capital mobilization from TDNH is being used by businesses and it has brought some positive results In 2019 it was VND

In 2021, Hoa Phat Group's capital reached approximately VND 22,248,179,488,083, showing a slight increase of 1.53% from VND 22,587,781,095,478 in 2020 This indicates that raising capital through bank credit and issuing shares is currently the most effective strategy for the company.

4.1 Capital mobilization by bank credit

- It is possible to mobilize large amounts of capital in the short or long term, meeting the capital needs of the enterprise for different objectives;

- Bank interest rate is considered a type of expense, so when using bank loans, enterprises are entitled to a partial reduction in corporate income tax;

- The cost of using bank credit is the cheapest of all methods of raising capital;

- Low level of risk: by the time of payment, the enterprise fails to pay the debt will be issued additionally by the bank.

- The enterprise must have a report on the specific capital use plan for the bank to appraise and need assets to secure such loan;

- Enterprises must comply with regulations set by banks in the use of loans;

- Subject to the supervision of the bank on the use of capital for the right purposes stated in the contract, pay the principal and interest on the committed term ;

- Enterprises reduce the initiative in borrowing and using loans because they depend on the bank's assessment and regulations set out by credit institutions.

Complex and time-consuming procedures can cause businesses to lose business opportunities due to the lack of capital in a timely manner.

4.2 Mobilize capital from stock issuance

- The enterprise is underwritten by the bank and has a securities company that supports the public offering of shares;

Enhancing capital borrowing capabilities allows businesses to scale up operations and boost competitiveness in production and commerce by accessing new financial and technological resources.

An enterprise is not obligated to repay the principal or distribute dividends if it is not profitable, as dividends are derived from after-tax profits.

- The cost of guarantee and issuance that the enterprise must pay to banks and securities companies is relatively large;

- Cumbersome, time-consuming loan procedures;

- The issuance of shares is likely to reduce the current owner's control over the business;

- The issuance of additional shares often reduces the share price of the business.

Ros, ROA, ROE targets in 2019 and 2020 of Hoa Phat

5.1 ROS, ROA and ROE targets in 2019 and 2020.

1) Tổng tài sản bình quân 89.999.518 116.643.732 26.644.214 29,60%

Tỷ suất lợi nhuận trên tổng tài sản ROA = (4)/(1)*100% 8,42% 11,58% 3,16% 37,51%

Tỷ suất lợi nhuận trên doanh thu ROS = (4)/(3)*100% 11,90% 14,99% 3,08% 25,89%

Tỷ suất lợi nhuận trên vốn CSH ROE = (4)/(2)*100% 17,14% 25,24% 8,10% 47,25%

In which: T ổng tài s ản bình quân= Tài sản đầu kỳ + Tài sản cuối kỳ

Average CSH = V ốn CSH đầu kỳ +Vốn CSH cuối kỳ

5.2 Commenting and evaluating ROS, ROA, ROE targets

- In 2020, ros, ROA and ROE profitability indicators all increased higher than in

2019 due to increased after-tax profitability Concrete:

POSITIVE ROS proves that the company operates effectively and the business is profitable ROS increased by 25.97% year-on-year indicating the profitability of increased revenue.

Roa's 37.53% increase indicates that using assets to profit a company is more efficient than the previous year.

ROE's increase of 47.26% in 2020 proves that Hoa Phat uses capital more effectively than in 2019 ROE >15% indicates that the company has sufficient financial capacity.

Over the past two years, the asset turnover ratio has averaged approximately 0.7, indicating efficient asset management Additionally, the rise in the return on sales (ROS) ratio has positively impacted the return on assets (ROA), demonstrating the company's effective cost management during this period.

The company's Return on Equity (ROE) target exceeds its Return on Assets (ROA) target, demonstrating effective utilization of financial leverage By strategically using borrowed capital, the company has successfully enhanced its profit margins.

Thus, in general, despite the impact of covid-19 epidemic, Hoa Phat's business situation is still relatively stable and achieves high performance.

In a detailed analysis of Hoa Phat Group Joint Stock Company's financial statements for 2019 and 2020, the group identified key strengths and weaknesses, as well as the overall efficiency of its production and business operations This evaluation highlighted the critical importance of financial analysis in formulating effective strategies, guiding investment decisions, and fostering sustainable development for maximum operational efficiency.

In today's integrated economy, businesses, including Hoa Phat Group Joint Stock Company, must proactively enhance their performance and develop their capabilities while improving employee well-being Over the past two years, the company has actively engaged in expanding its operations and business activities across its member companies However, the prolonged impact of the epidemic has hindered overall business efficiency and capital utilization As we adapt to the "new normal" of coexisting with the pandemic, it is essential for the entire company to unite and for the Board of Directors to exercise discernment in making strategic decisions.

Tiêu đề	Analysis of Financial Statements at Hoa Phat Group Joint Stock Company in 2019-2020
Tác giả	Tran Ho Nam
Người hướng dẫn	Nguyen Minh Hue
Trường học	National University of Economics
Chuyên ngành	Corporate Finance
Thể loại	Practice Report
Năm xuất bản	2022
Thành phố	Hanoi

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