TUONG AN OVERVIEW
General Information
Address: No 138-142 Hai Ba Trung Street,
Da Kao Ward, District 1, Ho Chi Minh, Vietnam
Email: tuongan@tuongan.com.vn
Website: www.tuongan.com.vn
Establishment and development history
1977 Established in 1977, Tuong An has been a trademark associated with all generations of Vietnamese families for the past 42 years.
1986 After being empowered to self-supervise production and business activities, plus the completion of a new production facility, Tuong An quickly expanded its development between
In the late 1990s, Tuong An encountered significant challenges due to global economic integration and intense competition from imported avocado and vegetable oil brands To address these challenges, Tuong An adopted a flexible and innovative approach to consumer engagement, focusing on raising awareness of nutritional cooking oil The company launched a variety of new products enriched with micronutrients, utilized high-quality raw materials, and increased the production of bottled refined cooking oil to cater to the domestic market.
In October 1991, Tuong An Cooking Oil was officially launched, establishing itself as the flagship product of the company and quickly becoming a market leader in Vietnam's edible oil sector Today, Tuong An remains at the forefront of the market, with its cooking oil consistently trusted and preferred by consumers.
In December 2003, the Company launched an experimental study aimed at enhancing edible oil products with micronutrients This initiative included pure soybean oil, recognized for its heart health benefits, and ViO oil, which is enriched with nutrients derived from Gac fruit oil, supporting children's brain development and promoting skin, eye, and heart health.
Tuong An is committed to becoming a leader in the essential food market by providing nutritious, safe, and high-quality products for millions of Vietnamese families With a focus on sustainability and core values, Tuong An has earned the trust of the Vietnamese people over 42 years, establishing itself as a "national brand." Dedicated to enhancing the happiness of every meal, Tuong An continues to strive for excellence while offering consumers outstanding products at affordable prices.
Organization and human resources
As of December 31, 2019, Tuong An employed a total of 1,407 individuals With a significant and continually expanding workforce, the Board of Directors and Board of Management prioritize human resource development, recognizing it as essential to the company's success and operational efficiency.
Nguyen Thi Hanh Tran Le Nguyen
Le Thi My VanNguyen Thi Thanh Van
Corporate structure
Tuong An plays a vital role in KIDO Group's packaged food distribution network, focusing on creating an efficient management system across its member units This interconnected approach ensures that consumers receive the right products, with the correct specifications, delivered at the optimal time and location.
Each company is guided by the Executive Management Committee (EMC), which oversees the implementation of the Group's strategic goals and promotes business performance at the unit.
Tuong An operates under a three-team structure, providing shared support services to its member companies The Group aims to achieve a harmonious balance between long-term and short-term objectives.
Tuong An owns 2 large-scale factories: Phu My Oil Factory (80,000m2) and Dau Vinh Factory(37,000m2).
Vision & Mission
Vision: The Vietnamese brand is the most popular of the delicious dishes that help nurture and unite the happiness of the Vietnamese family.
Tuong An is dedicated to providing the highest quality delicious and healthy food to the community and every Vietnamese family, demonstrating a strong commitment to understanding, responsibility, and service to people and society.
BUSINESS STRATEGY ANALYSIS
Industry Analysis
In the national cooking oil market, Tuong An and Neptune are the two dominant brands, collectively holding a significant share Tuong An is in direct competition with Neptune, which poses a substantial challenge in the industry.
Neptune, produced by Cai Lan Vegetable Oil Company under KUOK OILs & GRAINS PTE, has recently entered the Vietnamese market, following Tuong An The brand distinguishes itself with a diverse product range and substantial financial backing, enabling aggressive marketing strategies through television advertisements, cooking lessons, and print media With competitive pricing, Neptune appeals to a broad consumer base, presenting a significant challenge to Tuong An in the market.
Tuong An faces stiff competition in the Vietnamese cooking oil market from both domestic brands like Tan Binh, Vinadaco, and Marvela, as well as international products such as Ship, Floria, and Sun Flower These brands have established a strong presence, particularly among low-income consumers, due to their high-quality offerings While imported products attract consumers with their appealing designs and variety, their higher prices limit their market share Consequently, Tuong An holds only a portion of the market amidst this growing competition.
About conversion costs (costs that customers want to convert their shopping to other suppliers): easy to change without any cost.
In particular, in the Vietnamese market, the psychology of preferring to use imported goods and the ASEAN tax preferential policy, the selling price is almost equal.
The choice and replacement of products is not difficult so the threat of new entrants is not small. c) Threat of substitute products:
Living conditions improved, so people look for more advanced products or products from abroad In contrast, low-income people: Find cheaper products when the same volume of bottle.
Tuong An competes in a diverse market alongside various products like cheese, butter, and sauces For instance, consumers are increasingly opting to mix salads with cheese instead of traditional oil, highlighting the evolving preferences in food pairings.
To lower the fat content in meals, many individuals opt for a versatile non-stick pan that allows for frying without the need for vegetable oil However, it's important to note that this method is only a short-term solution and is not suitable for long-term cooking practices.
Therefore, Tuong An's products still retain their market value. d) Buyer’s power:
The Vietnamese food market is projected to experience ongoing growth driven by rising disposable incomes As the quality of life improves, consumers in Vietnam are increasingly prioritizing their health, leading to a greater focus on the nutritional value of their food choices.
In 2018, Vietnam's cooking oil market generated impressive revenues of 25,000 billion VND; however, the country's edible oil consumption still lags behind that of other regional nations The oil industry is projected to experience continued growth over the next five years.
Is one of the big manufacturing cooking oil companies Vietnamese, Tuong An is taking advantage of great opportunity to capture the potential of the industry.
When income increases, people's living standards are improved and the demand for cooking oil is required of the people will get bigger and bigger. e) Supplier’s power:
The main input is raw vegetable oils produced from oil fruits and seeds, of which palm and soy beans are the two most used nuts (about 60% and 30%).
For cooking oil industry, source of auxiliary production materials large dependence on imports from abroad, mainly from Malaysia and Indonesia (accounting for nearly 80%).
The ability to negotiate with suppliers is very low.
Tuong An has yet to identify a primary oil-bearing tree suitable for large-scale development, which poses challenges in securing a consistent supply of raw materials.
Competitive Strategy Analysis
TAC's competitive strategy effectively blends cost leadership with differentiation, aiming to provide high-quality, delicious, and healthy food for Vietnamese families The company's mission emphasizes its commitment to the community, showcasing dedication, understanding, and responsibility towards people and society Additionally, TAC operates an eco-friendly factory, reinforcing its commitment to sustainability while delivering exceptional products.
Phu My factory, the largest vegetable oil manufacturing facility of TAC, is recognized as one of the most environmentally friendly factories in Vietnam, with green coverage comprising 40% of its total area.
For nearly 40 years, TAC has prioritized both quality and affordability in its cooking oils, offering competitive prices that make high-quality products accessible to all consumers For instance, TAC's soybean oil is priced at approximately 36,000 VND per liter, significantly lower than the 40,000 VND price point of its competitor, Simply This commitment to value allows customers to enjoy premium quality without breaking the bank Additionally, TAC employs advanced production systems that operate continuously and are automatically controlled by PLC and computer systems, ensuring optimal quality and preserving essential vitamins A and E in the oil Human expertise remains a vital component in maintaining these high standards.
TAC not only invests in cutting-edge technology but also values its talented workforce, whose extensive experience and strong business ethics are crucial to the company's mission Regular professional training ensures that staff stay updated on market trends, enabling them to develop innovative solutions that enhance production efficiency while effectively reducing costs.
TAC has achieved a remarkable breakthrough by combining advanced technology with human essence, resulting in high-quality products at competitive prices that elevate Vietnamese cuisine The company continuously diversifies and enhances its offerings while keeping prices affordable, successfully winning the hearts of Vietnamese consumers.
Corporate Strategy Analysis
For Tuong An Company, its core business is cooking oil.
Tuong An enhances collaboration with partners to diversify its product portfolio, focusing on delivering quality products that meet daily food needs The company employs two key strategies: distributing branded products from strategic partners and offering OEM products under the Kido Group brand This diverse and continually researched product range aims to build consumer trust and secure shelf space at retail locations.
Tuong An has successfully implemented its packaged food strategy, leveraging its distribution system to quickly and cost-effectively introduce new products This range includes refined sugar, snack noodles, instant noodles, and various sauces, expanding their offerings beyond cooking oil.
SWOT Analysis
1 Labor level meets production needs.
2 Employee income at a reasonable level.
4 Strong brand identity and good reputation.
1 Qualifications of managers are not flexible.
3 Form of packaging design is not attractive.
5 Materials are mostly imported from abroad
1 Macroeconomic policies were signed with trade agreements (WTO,
ATIGA VJEPA, AANZFTA) expanding export markets.
4 Bank interest rates are reasonable.
6 Government support: developing domestic raw material areas.
7 Buyers’ purchasing power is increasing.
8 The market potential increases in the future.
9 Consumers' tastes are running towards good quality products for their health.
Product development strategy (with creating a new premium product line that stands out from competitors to meet needs and tastes).
1 W3,4 + O6, 7: Market penetration strategy (Enhancing advertising activities, promotions, changing packaging design to create a new impression for the brand).
2 W1,5 + O6,7,8: Joint Ventures (looking for new supply).
3 W1 + O1,7,8: strategy development strategy planning capabilities.
4 W5 + O4,6,7,8: Backward integration strategy (diversify sources of input materials).
1 The exchange rate tends to increase.
2 Instability of the stock market.
3 Competitive pressure from the schedule of reducing cooking oil import tax to 0%.
4 Pressure of raw material supply.
5 The current and potential strong rivals: high level of competition.
1 S1,2,3,4,8,11,12 + T3,5: Product development strategy (Focusing on promoting a new premium product line, outstanding quality for compete with rivals).
2 S3,4,11 + T1,3,4,5: Strategy of integration in horizontal lines- acquisition (acquiring smaller companies in the same industry to increase market share).
3 S3 + T1,3,4,5: Backward integration strategy (diversify and develop its own material areas).
1 W1,2,3 + T2,3,4,5,6: decline strategy (regulating organizational structure
&management, eliminating products that are not competitive in the market).
2 W5 + T1,3,4,5: Joint Ventures (looking for new supply).
3 W1,2,3,4 + T1,2,3,5: Strategy of integration in horizontal lines(merging powerful companies to increase their resilience to the fiercely competitive market).
PEST Analysis
The Government ended the safeguard tariff on imported oil, leading to the influx of imported goods, putting competition pressure on domestic companies. b) Economic analysis
The Vietnamese cooking oil industry is experiencing significant growth, attracting both foreign and domestic enterprises With its vast development potential, cooking oil is a versatile product with high demand elasticity, meaning that even minor price fluctuations can significantly alter consumer behavior As a result, the competitive pressure within this market is intense.
Vietnam's growing population and shifting consumption trends are driving a demand for healthier products, particularly in the cooking oil sector, leading to increased diversity within the industry.
The rapid development of science and technology plays an important role in improving labor productivity, contributing to increasing production efficiency.
Besides, oil production technology is not too complicated, so the cost of production and the price of oil is not too high.
ACCOUNTING ANALYSIS
Identifying Key Accounting Policies
The primary objective of accounting analysis is to accurately identify key accounting policies that reflect a firm's success and associated risk factors TAOIL, a company in the essential food sector, emphasizes critical success factors such as effective material planning, regulated raw material supply for production, and optimized inventory management to ensure stable prices and meet consumer demand Additionally, TAOIL focuses on product advancement and diversification, enhancing offerings with high nutritional value to align with health-conscious consumer needs The company invests in research and development to create products rich in micronutrients, aimed at improving the health and immune systems of Vietnamese consumers while catering to their specialized health care requirements.
Inventories are valued at the lower of their acquisition cost and net realizable value The net realizable value is calculated as the estimated selling price of the inventories under normal business conditions, minus the anticipated costs to complete and the expected selling expenses.
The perpetual method is used to record inventories, which are valued as follows:
Raw materials, consumables and goods for resale.
Actual cost on a weighted average basis.
Finished goods and work in process.
Cost of direct materials and labor plus attributable overhead based on the normal level of activities.
An inventory provision is established to account for potential losses from the impairment of raw materials, finished goods, and other inventories owned by the Group, based on evidence of impairment at the balance sheet date Adjustments to this provision are reflected in the cost of goods sold in the consolidated income statement.
Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, after provision for doubtful receivables.
The provision for doubtful receivables reflects amounts deemed unlikely to be collected as of the balance sheet date, with adjustments to this provision recorded as general and administrative expenses in the consolidated income statement Additionally, tangible fixed assets and construction in progress are critical components of a company's financial health.
Tangible fixed assets are recorded at their cost minus accumulated depreciation, which includes the purchase price and any direct costs necessary to prepare the asset for its intended use Costs for additions and improvements are added to the asset's carrying amount, while maintenance and repair expenses are charged to the consolidated income statement as they occur Upon the sale or retirement of tangible fixed assets, any gain or loss from the disposal—calculated as the difference between the net proceeds and the carrying amount—is reflected in the consolidated income statement.
Construction in progress refers to tangible fixed assets that are currently under development and are recorded at their cost, which encompasses construction expenses, equipment installation, and other direct costs These assets are not subject to depreciation until they are completed and actively utilized.
The policies and estimates employed in recording research and development (R&D) expenses align with accounting standards and the unique characteristics of the firm However, challenges arise in evaluating and recording R&D expenses due to the difficulty in accurately determining their value Additionally, borrowing costs associated with R&D investments must also be considered in financial reporting.
Borrowing costs, which include interest and associated expenses, are recorded as expenses in the year they occur, unless they are capitalized Costs directly related to acquiring, constructing, or producing an asset that requires significant time to prepare for use or sale are capitalized as part of the asset's cost.
Revenue from the sale of goods is recognized only when all five conditions outlined in Article 79 of Circular 200/2014/TT-BTC are met The Group emphasizes that revenue will not be recognized in cases where there are significant uncertainties about the collection of payment or the potential return of goods.
Under the circumstances, revenue is recognized based on principle of “substance over form” and allocated to each sales obligation.
Revenue is recognized when it is likely that economic benefits will accrue to the Group and can be measured reliably It is assessed at the fair value of the consideration received or expected, excluding any trade discounts, rebates, and sales returns Additionally, specific recognition criteria must be satisfied prior to acknowledging revenue.
Sale of goods: Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually upon the delivery of the goods.
Rendering of services: Revenue is recognized when service is rendered and completed.
Interest: Revenue is recognized as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt.
Dividends: Income is recognized when the Group’s entitlement as an investor to receive dividends is established g) Segment information
A segment refers to a distinct component identified by the Group, focusing on either providing products or related services (business segment) or operating within a specific economic environment (geographical segment) Each segment faces unique risks and returns that differentiate it from other segments.
Assess Accounting Flexibility
To tangible fixed assets, TAC uses flexible estimate accounting for computing on a straight-line over the estimated useful lives of tangible fixed assets as follows:
Buildings and structures 10 years 6 - 50 years
Machinery and equipment 5 - 10 years 5 - 25 years
Means of transportation 6 – 10 years 6 – 12 years
Class, there are still many different types of assets with different useful lifetime and therefore it correctly reflects the nature of the use of property.
TAC utilizes a perpetual inventory system, determining inventory costs on a weighted average basis, which is particularly suitable for manufacturing companies where materials are often mixed, making it challenging to differentiate between older and newer stock This method aligns with modern business practices and enhances the reliability of accounting data, reflecting the flexibility in managerial decision-making.
It is necessary for managers to give the flexibility in revenue policies to help easily create success for the company by their judging ability.
Certain policies restrict flexibility in evaluating and recording R&D expenses, as per VAS guidelines, which require R&D and marketing costs to be expensed In contrast, software development can be capitalized This creates challenges for managers who struggle to assess future economic benefits, resulting in insufficient information for effective decision-making.
Evaluate Accounting Strategy
The TAC primarily focuses on producing vegetable oil, and its accounting policies align closely with those of its competitors in the industry Consequently, the strategies implemented in recent years, such as those adopted by the Marvela branch, are deemed reasonable and effective.
Mrs Nguyen Thi Hanh has served as both deputy general director and chairman of the board of directors since June 8, 2017 As of May 2020, she holds 15,000 shares of TAC, representing 0.4% ownership valued at 0.4 billion VND Her dual role enables her to effectively manage the company, aligning the interests of the board of directors and executive directors while minimizing agency costs.
TAC's accounting policies have remained consistent for over four years, with any changes implemented alongside other branches in the vegetable oil industry Recent financial statements show no substantial adjustments to revenues or estimates, and there is no evidence of significant manipulation in quarterly reports aimed at artificially inflating revenues or deflating expenses.
Evaluate Quality of Disclosure
Transparent information presentation in annual reports is crucial for listed companies TAC stands out among competitors due to its superior disclosure quality, clearly outlining occupations, business fields, geographical areas, orientations, objectives, and all production types by 2020 Additionally, TAC ensures that its accounting policies are published distinctly, comprehensively, and reasonably.
The corporation announced specific oriented targets at the beginning of each operating years Besides, TAC also published precise information about stocks and transactions.
The corporation provided a concise overview of its identity, detailing accounting policies, assumptions, and their rationale in footnotes Through its annual reports, TAC effectively communicated its business strategies to both internal and external stakeholders, offering them a clear understanding of the company's development and operational status.
TAC has outlined potential future risks the company may face while also presenting strategies to mitigate them This proactive approach enables investors to receive comprehensive and informative reports, empowering them to make informed investment decisions in the manufacturing sector.
TAC's commendable voluntary information disclosure reflects its strong performance, with a significant increase in first-quarter profits compared to the same period last year This positive announcement not only highlights the company's success but also has the potential to attract more investors, customers, and suppliers.
Identify Potential Red Flags
Tuong An's total assets turnover ratio indicates low efficiency in inventory and production management, suggesting potential issues such as excess inventory, unsold products, or idle property This high inventory proportion may negatively impact product quality, diminish product value, and ultimately reduce gross profit.
Net Sales / Net Accounts Receivable
In 2017 and 2018, Tuong An experienced a significant decline in its receivables turnover, with the debt recovery rate dropping to 6.62 in 2018 compared to the previous year This low debt recovery rate has led to an increase in appropriated funds, resulting in potential cash shortages for the enterprise Consequently, Tuong An may face challenges in financing its working capital for production and might need to resort to borrowing to address this financial gap.
Undo Accounting Distortions
An analysis of Tuong An's audited financial statements reveals no accounting distortions, indicating that the financial data is both complete and accurate This reliability enhances the ease of analysis and evaluation of the company's financial position.
Analysis of the Statement of Financial Position/ Balance Sheet
a) Financial Structures of WC/WCN/NC
Tuong An Vegetable Oil Joint Stock Company (TAC)
BO 458,840,375,653 551,234,673,057 320,563,610,411 350,523,774,208 Total shareholders’ equity and liabilities
Tan Binh Vegetable Oil Joint Stock Company (NKDC)
Total shareholders’ equity and liabilities
Case 1 2 1 1 b) Comparative analysis of TAC and NKDC
TAC's financial structure, categorized as case 2, is typical for manufacturing companies, indicating a lower risk in capital costs compared to its competitor, NKDC, which follows case 1.
TAC’s net cash of 4 latest year is less than 0, this means TAC use long-term sources to invest in short term activities. c) Statement of financial structure
Analysis of statement of cash flow
Net cash provided by operating activities 115,907 -254,220 336,500 86,107
Acquisitions of fixed assets (tangible and intangible) -14,669 -24,166 -10,932 -10,069
Proceeds from sale of fixed asset 9,928 2,696 30 0
Proceeds from sale of held to maturity investments 3,840
Proceeds from issuance of shares and receipt of contributed capital 33,560
Net increase in cash and cash equivalent -500,910 -302,428 -55,517 -99,953
Tuong An Company (TAC)’s excess cash flow in 2018 is less than 0 while the 3 previous years are all more than 0.
TAC’s available cash flow in the 4 latest year are all more than 0.
TAC’s free cash flow in the 4 latest year are all less than 0.
Mainly the company's cash generated from operating activities and not investment and financing activities.
In 2019, negative cash flows from investment activities indicate the scale of business expansion, as the income generated from asset sales and financial investments was insufficient to cover the expenditures on purchasing fixed assets and expanding investments.
FINANCIAL ANALYSIS
Common-size analysis
TAC, as a manufacturing firm, holds a significant proportion of inventory and fixed assets Additionally, due to the nature of the food industry, customers often make delayed payments, resulting in a high proportion of short-term receivables.
Income from financial activities not significant not significant
Financial costs not significant not significant
Interest expenses not significant not significant
Gains not significant not significant
Losses not significant not significant
Other profits not significant not significant
Current income tax charge not significant not significant
Deferred income tax charge not significant not significant
Tuong An Company has enhanced its production capabilities, leading to a reduction in the cost of goods sold Despite an increase in other expenses, including selling and administrative costs, the company has still achieved an increase in profit after tax.
In 2019, long-term assets receivables and long-term assets in progress of TAC has increased really quickly because TAC may expand the business and develop efficiently.
Amount of change % of change
Net profit from operating activities 1,506,216 1,203,647 302,569 25.1%
In 2019, net revenues of TAC increased 16.8%, profit after tax increased 24.4% Profit before tax in 2019 was more than 1,000 billion dongs Gross profit has increased continiously annual year.
Analysis of Profitability
Net profit margin is a crucial indicator of a company's financial health, reflecting the percentage of revenue that translates into net income after expenses By monitoring changes in this margin, companies can evaluate the effectiveness of their practices and project future profits From 2016 to 2018, TAC experienced a significant increase in net sales and net income, positively impacting its performance The net profit margin rose by 1.38% in 2017, but decreased from 3.06% to 2.46% in 2018 due to competitive sales strategies However, TAC rebounded in 2019, achieving a net profit margin of 3.29% Enhancing this margin can be accomplished by either reducing expenses or lowering the cost of sales.
Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Average Total Assets 1,883,410,708,253 1,801,809,089,681 1,380,959,391,725 1,209,932,489,273
The total asset turnover ratio indicates a firm's efficiency in utilizing its assets to generate sales, with a higher ratio being more favorable This general efficiency metric provides insights to investors and creditors regarding a company's operational effectiveness Recently, the ratio decreased from 3.14% to 2.45%, attributed to the company's sales strategy of lowering prices to attract more customers, despite an increase in assets.
The return on assets (ROA) ratio is a key profitability metric that evaluates how effectively a company generates net income from its total assets over a specific period By comparing net income to average total assets, ROA provides insights into a company's efficiency in managing its assets to produce profits This ratio is crucial for both management and investors, as it indicates how well the company converts its asset investments into earnings Essentially, ROA serves as a return on investment for capital assets, which often represent the largest expenditure for businesses In 2019, companies significantly increased their investments in assets, yet overall, ROA figures have remained stable over the years without substantial fluctuations.
DuPont analysis is a crucial aspect of profitability ratio analysis used to evaluate a company's financial performance It assesses profitability through key ratios, including return on assets, return on equity, net profit margin, total asset turnover, and financial leverage.
The industry has experienced a notable growth of 7.23%, which is commendable when viewed in the broader context This increase reflects a high net profit margin derived from substantial revenues, showcasing exceptional business competence.
Operating Income 163,477,673,869 133,282,551,791 159,577,393,116 81,828,848,263 Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Operating Income
The operating margin ratio, or operating profit margin, is a key profitability metric that indicates the percentage of total revenues that constitutes operating income.
TAC’s operating income in 2018 is 163,477 million (Net sales – all operating expenses).
TAC's operating margin stands at 3.94%, indicating that approximately 96.06 dong of every million dongs in sales is allocated to variable costs, leaving only 3.94 dong to cover non-operating expenses and fixed costs Additionally, the company's financial figures have shown growth.
Return on assets (ROA) is a key metric that reflects a company's efficiency in generating revenue from its operational activities To calculate ROA, experts compare the net income over a specific period with the current value of the assets employed in those operations This analysis provides insights into how effectively a company is using its assets to produce profits.
In 2019, TAC achieved a return on assets (ROA) of 7.87%, indicating a gain of nearly 8 dongs for every million dongs invested in operating equipment The period from 2016 to 2017 saw a significant increase in ROA, rising from 5.61% to 8.47%, reflecting a sound investment strategy during that time However, ROA experienced a notable decline in 2018, dropping to 5.35%, before rebounding to 7.87% in 2019, reinforcing the notion that a higher ROA is preferable for financial health.
Average Operating AssetsROA %) g) Operating Assets Turnover
Return on Operating Assets is a key ratio that measures how effectively a company utilizes its revenue-generating assets in ongoing operations A high operating assets turnover ratio signifies efficient use of funds invested in current assets, reflecting the company's ability to generate revenue from its operational resources.
From 2015 to 2018, the company's ratios were consistently high and acceptable, although a decline was observed from 2016 to 2018, followed by an increase in 2019 The average ratio during this period was approximately 2.5, indicating stable performance, attributed to the growth of operating assets outpacing net sales However, a significant decline in assets in 2019 resulted in an increase in this ratio It is crucial for the company to maintain an appropriate level of operating assets relative to its turnover, as an increase in profits is more beneficial than the costs associated with higher levels of current assets.
The sales to fixed assets ratio, or fixed assets turnover ratio, is a key performance indicator that assesses how effectively a company utilizes its fixed assets to generate revenue A higher ratio indicates greater efficiency in leveraging fixed assets to drive sales revenue.
Over a four-year period, TAC experienced a notable increase in its financial performance, with the ratio rising from 28.82 to 51.96 By 2019, this ratio indicated that TAC generated approximately 51.96 dong in revenue for every 1 dong invested in fixed assets, demonstrating a strong return on investment for the vegetable oil company.
The return on equity (ROE) ratio is a key profitability metric that assesses a company's effectiveness in generating profits from shareholders' investments It indicates the amount of profit produced for each dollar of common stockholders' equity.
Over 4 years, from 2016 to 2019, the ROE percentages showed a growing trend by over 6% from 13.76.91% to 20.14%, respectively The ROE of TAC is rather appreciated, with the average for
4 years at 16% Because the ratios fluctuated over years, it illustrated that the company do not operate really well Falling ROE in 2018 is usually a problem.
In 2018, the company's return on equity (ROE) rose to 20.14%, demonstrating its enhanced capacity to generate profits with less capital investment This increase reflects the effectiveness of the management in utilizing shareholders' capital, indicating that a higher ROE signifies better performance.
Gross Profit 661,559,739,524 562,248,951,008 563,846,389,919 374,168,116,619 Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Gross Profit
Gross ProfitNet SalesGross Profit Margin (%)