MINISTRY OF EDUCATION STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY GRADUATE THESIS BANKING AND FINANCE MAJOR CODE 7340201 THE FACTORS AFFECTING THE PROFITABILITY OF ENTERPRISES IN THE[.]
MINISTRY OF EDUCATION STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY GRADUATE THESIS BANKING AND FINANCE MAJOR CODE: 7340201 THE FACTORS AFFECTING THE PROFITABILITY OF ENTERPRISES IN THE STEEL INDUSTRY GROUP LISTED ON VIETNAM’S STOCK EXCHANGE SVTH : Lê Hồng Bảo Trân MSSV : 050606180423 GVHD : Dr Nguyễn Thị Như Quỳnh Ho Chi Minh City, July 4, 2022 DISCLOSURE My name is: LE HONG BAO TRAN Commitment graduation thesis with the topic "THE FACTORS AFFECT THE PROFITABILITY OF ENTERPRISES IN THE STEEL INDUSTRY GROUP LISTED ON VIETNAM‟S STOCK EXCHANGE" Instructor: Dr NGUYEN THI NHU QUYNH This graduation thesis is my research work, the contents and data in this thesis are completely honest, in which there is no content previously published or content made by others outside of this thesis Excluding references to sources AUTHOR LE HONG BAO TRAN ACKNOWLEDGEMENT Reality shows that to be successful at work, it is necessary to have the support and help of those around, no matter how much or little that help, directly or indirectly During the time from the time, I started working on my graduation thesis outline, I have received the attention, guidance and support of teachers, family, and friends around With a very deep gratitude, I would like to express my sincerest thanks to the lectures of Banking University of Ho Chi Minh City who used their knowledge and enthusiasm to be able to impart capital to me the most valuable knowledge during the study period at university I would like to give my sincere thanks to Ms NGUYEN THI NHU QUYNH who dedicatedly guided me through each talk and discussion on the research topic Thanks to those instructions and teachings, my thesis outline has been completed remarkably Once again, I would like to express my sincere thanks to Ms Quynh This thesis was completed within months At first, I was surprised because my knowledge was limited, so I couldn't avoid making mistakes Thereby, I look forward to receiving comments from teachers in the school to help my internship outline more and more perfect Sincerely, thank you! AUTHOR LE HONG BAO TRAN ABSTRACT Today, the steel industry is an industry with great potential for development and is an industry that plays an important role in economic activities and economic growth of countries around the world In Vietnam, in the past few years, the steel industry is an industry that tends to have stable growth for a long time, which leads to the prosperity of the domestic economy In countries around the world in general and in Vietnam in particular, the proportion of the steel industry in the total wealth of the society varies, but generally accounts for about 20 to 30% respectively Thereby, it can be seen that the steel industry has a relatively large proportion in the economic structure of our country and tends to increase In the market economy, besides the successes achieved, there are still many difficulties that many enterprises in the steel industry are facing in the process of operation that inhibit growth such as lack of capital, rapidly increasing price levels, policies that are not suitable with the actual situation, the decline of confidence in the market, besides there are also risks such as debt default or inability to pay and ability to pay debts The main reason for this situation is the lack of understanding and knowledge around working capital management as well as factors affecting profitability of business operation For business, profitability plays an extremely important role, because the main purpose of companies is to make a profit, when it is profitable, the company can continue to maintain production and business The final objective of firm is maximizing the firm value and maximizing the wealth of shareholder, to achieve this goal, the companies usually make profit Therefore, improving and enhancing profitability is always the top concern of managers, in addition to improving profits, businesses need to ensure solvency to be able to meet debt obligations as they come due Therefore, the author chooses the topic "The factors affect the profitability of enterprises in the steel industry group listed on Vietnam’s Stock Exchange" to clarify the extent of impact of micro and macro factors affecting profitability of steel industry enterprises on Vietnam stock exchange From there, provide necessary recommendations to improve profitability coefficient in the future To complete the research results, the author proposes the necessary research objectives, including determining the micro and macro factors affecting profitability, assessing the trend and the level of impact of the factors mentioned above and propose appropriate solutions to improve the level of impact of these factors on the profitability of steel enterprises listed on the Vietnam stock exchange In order to have a complete article, the author proposes a research layout consisting of main chapters, specifically as follows: Chapter 1: Introduction In chapter 1, this present the reason for the thesis through its necessity for the economy Besides, this chapter gives an overview of the objectives, methodology and contributions of the thesis Chapter 2: Theoretical basic and literature review In this chapter, this thesis introduces the concept of profit, profitability, the formula for measuring profit and profitability, refers to the theory of profitability and factors affecting the profitability of steel companies listed on the Vietnam stock exchange At the same time, this chapter also summarizes empirical studies on the factors affecting the profitability of enterprises in the steel industry Chapter 3: Methodology Based on chapter 2, this thesis will present the research model, explain the variables in the model and expect the sign of the independent and dependent variables Next, this thesis will describe the data collection method, including data from annual report of steel companies and data from World Bank, and the research model estimation method, thereby serving as the basis for the implementation of the next chapter Chapter 4: Empirical results In this chapter, the author will analyze the results research, including descriptive statistics, running regression models, testing the research model's defects, and resolving the defects Based on the results of this analysis, the author will evaluate and compare with previous empirical studies Then, this thesis will discuss the result and give all of the recommendations in the next chapter Chapter 5: Conclusion In this chapter, this thesis will summarize the results of the research conducted in the previous chapter and make recommendations to construction industry companies and the State Securities Commission based on the results of the assessment obtained At the same time, the author also raised the limitations and expanded research direction for future topics The thesis researches and analyzes the factors affecting the profitability of 25 steel companies listed on the Vietnam Stock Exchange in the period 2012-2020 The mentioned influencing factors include the regulation firm size (SIZE), financial leverage (TDTA), liquidity (LQ), fixed assets investment (TANG), company growth revenue (GR) and inflation rate (INF) Using panel data methodology, the study shows that firm size (SIZE) and liquidity (LQ) have a positive impact on profitability while variable financial leverage (TDTA) has the opposite effect In addition, the variables company growth revenue (GROWTH), fixed assets investment (TANG) and inflation (INF) were not statistically significant Based on the obtained analysis results, the study proposes some recommendations for corporate administrators and state management agencies to improve profitability coefficient in the future LIST OF ACRONYMS Word English Meaning CPI Consumer Price Index FEM Fixed Effects Model FGLS Feasible Generalized Least Squares Method HNX Ha Noi Stock Exchange HOSE Ho Chi Minh Stock Exchange OLS Ordinary Least Squares REM Random Effects Model SC Shareholding Company TABLE OF CONTENTS DISCLOSURE i ACKNOWLEDGEMENT ii ABSTRACT iii LIST OF ACRONYMS vi TABLE OF CONTENTS vii LIST OF TABLES x LIST OF FIGURES x CHAPTER Introduction 1.1 The necessity of the research 1.2 Research objectives 1.2.1 General objective 1.2.2 Specific objectives 1.3 Research questions 1.4 Subject and the scope of research 1.4.1 Research subject 1.4.2 The scope of research 1.5 Methodology 1.6 Implication‟s contribution 1.6.1 Academic implication 1.6.2 Practical implication 1.7 Structure of thesis SUMMARY OF CHAPTER CHAPTER 2.1 Theoretical basic and literature review The profitability of enterprises 2.1.1 The concept 2.1.2 The meaning of firm‟s profitability 2.1.3 Measuring the firm‟s profitability 2.2 Factors affecting FIRM‟S profitability 11 2.2.1 Company growth revenue 11 2.2.2 Fixed assets investment 11 2.2.3 Financial leverage 12 2.2.4 Firm size 12 2.2.5 Liquidity 13 2.2.6 Gross domestic product 13 2.2.7 Inflation rate 14 2.3 Literature review 15 2.3.1 Domestic literature 15 2.3.2 Foreign literature 16 SUMMARY OF CHAPTER 20 CHAPTER Data and methodology 21 3.1 Methodology 21 3.2 Research model 24 3.2.1 Model suggestion 24 3.2.2 Variable‟s explanation 27 3.3 3.2.2.1 Dependent variable 27 3.2.2.2 Independent variables 27 Data 32 SUMMARY OF CHAPTER 32 CHAPTER Empirical results 33 4.1 Descriptive statistics 33 4.2 research result 34 4.2.1 Correlation‟s analysis 34 4.2.2 Regression models 36 4.2.3 Hausman test 38 4.2.4 Defect test 39 4.2.5 FGLS estimation 41 4.3 Discussions 42 SUMMARY OF CHAPTER 45 CHAPTER conclusion 46 5.1 Conclusion 46 5.2 Recommendations 47 5.2.1 Financial leverage 47 5.2.2 Firm size 47 5.3 The drawback and the next suggest study 48 5.4 Future EXPENsion 48 SUMMARY OF CHAPTER 49 GENERAL SUMMARY 50 REFERENCEs 51 APPENDIX 54 ... studies on the factors affecting the profitability of enterprises in the steel industry 2.1 THE PROFITABILITY OF ENTERPRISES 2.1.1 The concept According to Will Kenton (2021), Corporate profit is the. .. objectives, the study conducts the specific objectives as: Firstly, identifying factors affecting profitability of enterprises Secondly, assessing the factors affecting the profitability of the steel industry... profitability, the formula for measuring profit and profitability, refers to the theory of profitability and factors affecting the profitability of steel companies listed on the Vietnam stock exchange At the