Thông tin tài liệu
NATIONAL ECONOMICS UNIVERSITY Subject: Business Finance Lecturer: Dr Tran Tat Thanh Assignment: Financial Statement Analysis of Vinamilk in the period 2019-2021 Name: Hoang Tue Linh Student ID: 11202135 Table of Contents PREFACE INTRODUCTION I ANALYSIS OF FINANCIAL STATEMENT II Sources and Uses of Cash a b a b Period 2019-2020 Period 2020 – 2021 .6 Standardized balance sheets Standardized income statements Financial ratios analysis 11 a b c d e Liquidity ratios 11 Financial leverage ratios: 12 Turnover ratios: 12 Profitability ratios: 13 Market value ratio: 14 Dupont analysis 15 III CONCLUSION 17 REFERENCES 18 TABLE OF FIGURES Figure 1: Sources & Uses of Cash (2019-2020) Figure 2: Sources & Uses of Cash (2020-2021) Figure 3: Common-size Balance sheet (2019-2020) Figure 4: Common-size Balance sheet (2020-2021) Figure 5: Common-size Income statement (2019) 10 Figure 6: Common-size Income statement (2020) 10 Figure 7: Common-size Income statement (2021) 10 Figure 8: Liquidity ratios of Vinamilk 10 Figure 9: Financial leverage ratios of Vinamilk 11 Figure 10: Turnover ratios of Vinamilk 12 Figure 11: Profitability ratios of Vinamilk 13 Figure 12: Market value ratios of Vinamilk 14 Figure 13: Dupont analysis 14 PREFACE Financial activity is one of the contributing parts to the company’s achievement of its goals The remainder of the department will be held back by poor financial performance, which prevents the company from achieving its objectives Therefore, sound financial management is crucial to the expansion of an enterprise's commercial activities Financial analysis is essential for determining if a company's financial performance is strong or weak The company's financial status will be revealed through financial analysis, and from there, steps will be taken to rectify the situation Researching Vinamilk’s finance has helped me better understand the current financial position, and determine the causes and extent of factors affecting Vinamilk’s finances From that information, make comments, evaluate, and propose some solutions to boost the business’s operations I INTRODUCTION Vietnam Dairy Joint Stock Company (Vinamilk) is a Vietnam- based food manufacturer The company's primary business activities include the production, marketing, and distribution of dairy products, particularly milk in all its forms and other products produced from it, as well as healthy food and non-alcoholic drinks Additionally, it offers farmers other technical assistance for breeding and growing operations, runs a polyclinic for medical treatment, and offers packaging and transportation services The business started out as the government-owned Southern Coffee - Dairy Company in 1976, changing its name to the Vietnam Dairy Company in 1993 Following its IPO on the Ho Chi Minh Stock Exchange in 2003, the business officially changed its name to Vietnam Dairy Products Joint Stock Company Vinamilk is a prominent company in Vietnam at the moment, reaching over 31 countries and bringing in over 1.5 billion USD annually It also makes important contributions to the nation and its citizens Vinamilk is the first business from Vietnam to appear on Forbes Asia's list of the 200 Best Under A Billion, which recognizes 200 of the region's best small and midsize businesses Vinamilk has grown into an economic success story in the wake of Vietnam's decision to join the WTO after nearly 40 years of development with policies that encourage the use of new technology and innovation Vinamilk desires to be one of the most favorite brands in every region and territory Their business philosophy is “We keep in our mind and our heart that the quality and innovation are always our most important companions We act with a customer -centered approach and commit to responding to all their needs” To preserve its consistently leading position in the local market and increase shareholder value, Vinamilk also keeps expanding its current geographic reach and product line AI ANALYSIS OF FINANCIAL STATEMENT Sources and Uses of Cash a Period 2019-2020 Figure 1: Sources & Uses of Cash (2019-2020) The given graph shows how Vinamilk's sources and uses of cash have changed over the course of three years, along with changes to its assets, liabilities, and owner's equity Overall, total assets, total liabilities, and total equity have grown somewhat from 2019 to 2020 A closer look reveals that from 2019 to 2020, the total Asset increased by 3.723 billion VND Vinamilk's sources of cash increased throughout the period as a result of a decline in cash balance (by approximately 554 billion VND), declining inventory (by about 78 billion VND), and decreasing net fixed assets (by approximately billion 40 billion VND) Additionally, there were notable increases in Other Current Liabilities, Long-Term Debt, and Common Stock of 1.897 billion, 46 billion, and 3.915 billion VND, respectively Throughout the 2019–2020 year, Vinamilk's accounts receivable and other current assets increased, which increased the company's cash uses In the instance of Vinamilk, the drop in Notes Payable by 1.544 trillion VND and the decrease in Accounts Payable by 583 trillion VND also drove the uses of cash b Period 2020 – 2021 Figure 2: Sources & Uses of Cash (2020-2021) Looking over the balance sheets for Vinamilk during the period 2020-2021, we see that quite a few things changed More specifically, throughout the time period, the Cash balance increased by 237 billion dong Because Vinamilk really paid out 237 billion dong to boost the amount in its checking account, this is a net usage Additionally, the firm spent 1.868 billion VND to boost its inventory, 631 billion VND to grow its other accounts receivable, and 3.310 billion VND to increase its other current assets Over the course of the year, fixed assets decreased by around 1.147 billion VND Due to Vinamilk's successful collection of roughly 1.150 billion VND from Net Fixed Assets, this is a source of cash By the end of the year, it had also borrowed an extra 970 billion dong for accounts payable The addition of 2.008 billion dong and 2.202 billion dong to other current liabilities and common stock, respectively, helped bring Vinamilk's total cash sources to above trillion VND General comments: Overall, Vinamilk's total Assets, Liabilities, and owner's Equity expanded gradually over the last three years from 2019 to 2021, resulting in a shift of more than trillion dong The sources and uses of money are, however, around trillion more in the 2019–2020 period than they are in the 2020–2021 period Because the pandemic COVID-19 started in later 2019, it may be feasible to justify this by noting that the firm did not keep an extensive amount of inventory on hand As a consequence, its transactions may still be completed rapidly between 2019 and 2020 Furthermore, Vinamilk’s financial situation had not been severely affected by the breakout of the pandemic in 2019, which helped the firm operate better than in the period of 2020-2021 when the business was facing an increase in Expenses and Debts that ensure the operation and competition with its rivals in the same industry However, Vinamilk had been still regarded as the top business in Vietnam’s dairy industry Standardized financial statements a Standardized balance sheets Figure 3: Common-size Balance sheet (2019-2020) Figure 4: Common-size Balance sheet (2020-2021) The given figures demonstrate how Vinamilk's assets, liabilities, and owner's equity developed over the course of three years beginning in 2019 Keep in mind that each line item on the balance sheet is expressed as a proportion of total assets (or Total Liabilities & Equity) Taking a closer look, despite a minor gain of 0.04% between the years of 2020 and 2021, the percentage of cash and cash equivalents decreased from 5.96% to 4.40% in that time Accounts Receivable (both short-term and long-term) increased progressively, taking up 10, 1, 10, and 9, % of total assets over the years, respectively The increase in Accounts Receivable has led to an increase in the company's net sales, showing that Vinamilk has put in place a suitable collection procedure to increase its revenues Inventory as a percentage of total assets decreased between 2019 and 2020, however data for that index dramatically rose by 2.6% in 2021 Inventory decreased by 1.02% in the 2019–2020 year, which helped to increase the company's total assets On the other hand, the Inventory amount increased significantly between 2020 and 2021 This is a result of the Covid- 19 pandemic's consequences as well as the rising demand for dairy products The increase in other Current Assets from 39.4% to 48.1% over the past three years is also noteworthy Over a period of three years starting in 2019, Net Fixed Assets had a significant decline of 4.7% Regarding Total Liabilities & Equity, Accounts Payable of Vinamilk reduced by 1.88% from 2019 to 2020, followed by a slight increase of 1.19% in the 20202021 course Other Current Liabilities rose remarkably, accounting for 13.4%, 16.3%, and 18.6%, respectively The date for Long- term Debt remained stable at 1.18% over the year 2019-2020 before declining to 0.78% in 2021 Additionally, having increased by 2.96%, the Common Stock of the firm fell to 66.5% during the research period b Standardized income statements Figure 5: Common-size Income statement (2019) Figure 6: Common-size Income statement (2020) Figure 7: Common-size Income statement (2021) For the income statement, each item is calculated as a percentage of net sales Overall, managers and investors anticipate that throughout the period, Expenses as a percentage of net sales will decline and Profit as a percentage of net sales will rise Examine the income statement for Vinamilk in more detail The cost of doing commercial activities, which includes selling, general and administrative, and finance costs, falls by 1.9% over time Additionally, the figures for Cost of Goods Sold (COGS) increased significantly between 2019 and 2021 by 3.6% COGS, which includes the cost of finished goods sold as well as the cost of services, is a significant factor in total profitability The consequences of COVID- 19 in late 2019, the rising customer demand, the growth of manufacturing scale, and better 10 production standards are to blame for the company's increase in COGS The business's revenues have increased as a result of lower expenses and higher COGS The progressive drop in the Earnings before Interest and Taxes (EBIT) number, which is 1.7% over the course of three years, has also been caused by the increase in COGS and the decrease in Expenses Interest Expenses saw a slight fluctuation, reducing to 0.14% after this index rose by 0.03% between 2019 and 2021, which led to the decrease in Taxable Income The research period witnessed a moderate fall in Taxes, from 3.91% in 2019 to 3.66% in 2021 This has caused the Net Income to decline over the period Financial ratios analysis a Liquidity ratios LIQUIDITY RATIOS Current ratio = CA/CL Quick ratio = (CA-Inventory)/CL Figure 8: Liquidity ratios of Vinamilk 11 - Current ratio: The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year Generally, it can be seen that current ratios experienced a gradual upward trend from 2.06 in 2019 to 2.38 in 2021 The solvency of Vinamilk was always guaranteed at around and the company had a greater ratio compared to the industry average in 2021, which means that the company was effective in paying short-term debts by its current assets during the period - Quick ratio: The quick ratio measures the dollar amount of liquid assets available against the dollar amount of current liabilities of a company The quick ratio of Vinamilk climbed from 1.72 in 2019 to 2.09, which was because of a slight decline in the Inventory However, in the following year, the increase in Inventory resulted in a reduction in the quick ratio Besides, the quick ratio was greater than the industry average in 2021; therefore, the business was able to pay its short-term debts with its liquid assets b Financial leverage ratios: Total Debt ratio = TD/TA Equity Multiplier (EM) = TA/TE Figure 9: Financial leverage ratios of Vinamilk - Total Debt ratio: Total debt to total asset is a ratio used to visualize how financially stable a company is During the period from 2019 to 2020, Vinamilk’s debt to assets remained stable at a safe level, below and below the industry average It shows that the company’s financial autonomy was relatively high, and most of the business’s assets are financed by its equity Hence, investing in Vinamilk was not as risky as in other firms - Equity Multiplier (EM): The equity multiplier is a ratio that measures the portion of a company’s assets financed by stockholder’s equity This ratio of Vinamilk was greater than the industry average in 2021, which indicates that the corporation relied more on financing from debt and other liabilities It means that the firm had a lower debt burden, and it would be able to sustain a healthy business with its own cash flow c Turnover ratios: Receivables Turnover = Sales / Account Receivable Total Asset Turnover (TATO) = Sales/ TA 12 Inventory Turnover = COGS / Inventory times 5.97 Figure 10: Turnover ratios of Vinamilk 6.52 5.11 30.83 - R e c e i v a b l e s T u r n o v e r : T h e r e c e i v a b l e s turnover ratio measures the efficiency with which a company is able to collect on its receivables or the credit it extends to customers This ratio of Vinamilk saw a steady decline from 12.7 in 2019 to 10.71 in 2020, and it was lower than the industry average This leads to the fact that the company’s collection of accounts receivable was not efficient and Vinamilk had a low proportion of quality consumers that pay their debts quickly - - Total Asset Turnover (TAT): The asset turnover ratio shows how efficiently the firm uses its assets to produce revenue compared to other businesses in the same industry Between 2019 and 2021, this ratio of Vinamilk fell from 1.283 to 1.172, lower than the industry average ratio (1.37), which illustrates that the company worked less efficiently in this period f Inventory Turnover: Inventory turnover measures how efficiently a company uses its inventory Despite its rise from 2019 to 2020, this ratio declined significantly to 5.11 in 2021 In addition, the inventory turnover ratio of Vinamilk was much lower than the industry average, which implies a sign of weal sales of the company d Profitability ratios: PROFITABILITY RATIO Profit Margin (PM) = Net Income / Sales Return on Assets (ROA) = Net Income / TA Return on Equity (ROE) = Net Income / TE Figure - Profit Margin: By calculating the profit margin, we can compute the percentage figure that indicates the percentage of profit the business has generated for each dollar of sale In the case of Vinamilk, the company’s profit margin went down over the period, from 18.40% in 2019 to 17.01% in 2021 This may imply that Vinamilk’s ability to transfer sales into profit decreased because much as the firm’s revenue was high, it also had a large amount of expenses Although there was a reduction in this ratio, Vinamilk still remained this ratio greater than the industry average Hence, Vinamilk seems to manage the business efficiently - Return on Assets (ROA): This ratio indicates the effectiveness of using assets to generate revenues Even though there was a gradual fall over the three-year period, compared to the average ROA of the industry which is 12.42%, Vinamilk’s ROA was still considered a high rate and the firm had been managing its assets effectively - Return on Equity (ROE): ROE is used to measure the profitability of a corporation in relation to stockholders’ equity Compared to the average of the food industry, Vinamilk’s ROE was rated to remain high, but it can be seen that the business’s ROE decreased steadily from 35.5% in 2019 to 29.66% in 2021 The reason for this reduction is that the company’s equity went up continuously while net profit after tax stayed relatively unchanged e Market value ratio: Price earnings ratio (P/E) = Price per share / EPS Price to book ratio (P/B) = Price per share / Book value per share Figure 12: Market value ratios of Vinamilk - 14 Price earnings ratio (P/E): P/E ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings Overall, there was a fall of 2.14 times in the price earnings ratio during the period Additionally, this ratio of Vinamilk was higher than that of the industry average, which means that investors had to pay more to purchase a share of the company’s earnings - Price to book value (P/B): The P/B ratio measures the market’s valuation of a company relative to its book value Generally, the price to book value ratio of Vinamilk saw a remarkable decrease from 6.82 to 5.04 between 2019 and 2021 It is obvious that in the case of Vinamilk, this ratio was quite high and was much greater than the industry average This may be because the company’s development had been highly expected for the future, so investors had been willing to pay more for the book value of the business Dupont analysis PM = Net income / Sales TATO = Sales / TA EM = TA/TE = + TD/TE ROE The fact that the company's Profit Margin, Return on Equity, and Return on Assets indices have all declined over the past years, demonstrates that Vinamilk is unable to generate more profits This is a negative development for the business, and they must raise these figures to draw in additional financiers for new endeavors Additionally, Total Assets Turnover has declined during the previous years, which indicates that the company's liquidity has diminished and its danger of running out of money has grown These might result in a decline in the number of risk-taking investors, and if this scenario persists, it will be difficult for the firm to obtain money in the future On the other hand, the Equity Multiplier ratio tends to stay unchanged, proving that Vinamilk is still managing its equity and debt effectively to finance the purchase of assets When comparing Vinamilk’s Dupont indexes with the dairy industry average, most indices including Profit Margin, Total Assets Turnover, and Return on Equity are higher than the industry average It is not difficult to understand why Vinamilk, despite its gradual decline in profit margin over the years, is still higher than the 15 dairy industry in general Vinamilk has achieved success in becoming the firm with the greatest market share in the dairy sector thanks to the finest milk quality in Vietnam, national distribution, coupled with the largest scale of milk production in the country The industry's biggest income is produced by Vinamilk, whose products are consistently consumed at the highest rates Additionally, one of the things that helps Vinamilk consistently keep its net income at the top of the sector is the company's development plan Vinamilk constantly increases the quantity and variety of its goods to become one of the 30 largest dairy enterprises in the world As a consequence, the business can grow its business and boost sales, making it more successful than its rivals Problems: According to the Dupont research, changes in Total Assets Turnover (TAT) and Equity Multipliers are to blame for the declining ROE (EM) When we take a deeper look at TAT's analysis, we can say that the company's Current Assets, specifically its Accounts Receivable and Inventory, are the key areas of concern The DSO of Vinamilk is excessive in terms of Accounts Receivable The issue of customers misappropriating funds has lasted for far too long since the company did not implement the payment discount policy to its full potential to recover money more quickly Vinamilk's inventory expanded as a result of the Covid-19 pandemic's effects and market changes, which also increased the cost of Inventory storage Additionally, because dairy products must be stored under extremely strict conditions and have a limited shelf life, the company's inventory suffered significant damage during the Covid-19 period, resulting in a decrease in net income and, subsequently, ROE The company has also not developed any campaigns to move inventory more quickly or efficiently organized management to carefully monitor and avoid loss and damage to the inventory In terms of Equity Multiplier, we can see from the data for Vinamilk’s finance that, the Total Debt (equals Total Assets – Total Equity) of this firm experienced a significant increase over the 3-year period This indicates that the company borrowed more money and it used more debt to purchase assets, which rose the Equity Multiplier remarkably, and consequently, ROE 16 III CONCLUSION For the purpose of studying the company, financial analysis is crucial The company is able to study the growth of its industry and assess how effective its strategy for competing with other rivals is by going through the processes of a business analysis step by step In addition, the organization's financial performance is assessed to ascertain profitability and how well the company is run in order to provide a sustainable plan for the future All in all, the analysis shows that Vinamilk's financial indices are largely in a good direction Vinamilk has one of the best financial performances of any company in its sector Because the majority of the company's resources are backed by its own stock, it can pay its debt in cash, and it has a positive free cash flow to equity, both of which are encouraging indicators for investors Furthermore, Vinamilk’s operating cash flow and sales have both been rising quickly over the year So far, the entity is doing very well but still cannot avoid making difficult choices even when everything is calculated and evaluated Therefore, the business needs to limit the potential risk by reducing costs, focusing more on the value of the item to build customer confidence, and the creating a sustainable development firm So far, the company is doing very well but still cannot avoid making difficult choices even when everything is calculated and 17 evaluated Therefore, the entity needs to limit the potential risk by reducing costs, focusing more on the value of the item to build customer confidence, and then creating a sustainable development firm 18 REFERENCES - - - 19 The company’s background: https://www.vinamilk.com.vn/en Vinamilk’s financial statements: 2019: https://www.vinamilk.com.vn/static/uploads/documents/bctc/1588397927_B %C3%A1o_c%C3%A1o_t%C3%A0i_ch%C3%ADnh_h%E1%BB %A3p_nh %E1%BA%A5t_Q4-2019-EN_%C4%91%C3%A3_so %C3%A1t_xet.pdf 2020: https://www.vinamilk.com.vn/static/uploads/documents/bctc/1614600464_B CTC_Hop_Nhat_31.12_.20_-_EN-FN_.pdf 2021: https://www.vinamilk.com.vn/static/uploads/documents/bctc/1646046854_C onsol_31.12_.2021_-_EN_.pdf Vinamilk’s annual reports: https://www.vinamilk.com.vn/en/annual-reports The industry average: https://www.stockbiz.vn/IndustryOverview.aspx? Code=3500 ... in the Inventory However, in the following year, the increase in Inventory resulted in a reduction in the quick ratio Besides, the quick ratio was greater than the industry average in 2021; therefore,... margin, we can compute the percentage figure that indicates the percentage of profit the business has generated for each dollar of sale In the case of Vinamilk, the company’s profit margin went... the breakout of the pandemic in 2019, which helped the firm operate better than in the period of 2020 -2021 when the business was facing an increase in Expenses and Debts that ensure the operation
Ngày đăng: 30/11/2022, 14:05
Xem thêm:
