Học viện Tài chính Luận văn tốt nghiệp TABLE OF CONTENTS LIST OF TABLES STATEMENT OF AUTHORSHIP ACKNOWLEDGEMENTS INTRODUCTION 1 1 The Importance of subject 1 2 Interest of subject 1 3 Work environment[.]
TABLE OF CONTENTS LIST OF TABLES STATEMENT OF AUTHORSHIP ACKNOWLEDGEMENTS INTRODUCTION 1 THE IMPORTANCE OF SUBJECT INTEREST OF SUBJECT WORK ENVIRONMENT .1 PLAN AND CONTENT OF THE REPORT PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC CHAPTER 1: CURRENT SITUATION OF WORKING CAPITAL MANAGEMENT AT BAO MINH CONFECTIONERY JOINT STOCK COMPANY 1.1 OVERVIEW OF THE COMPANY 1.1.1 MAIN FEATURES OF THE COMPANY .4 1.1.2 ESTABLISHMENT AND DEVELOPMENT PROCESS 1.2 FUNCTIONS, MISSIONS AND ORGANIZATIONAL STRUCTURE 1.3 CONSUMPTION MARKET AND COMPETITIVE POSITION 1.4 FINANCIAL SITUATION OF THE COMPANY .7 CHAPTER 2: WC MANAGEMENT AND ASSESSMENT 13 2.1 CONDITIONS, SCALE OF WC STRUCTURE AT THE COMPANY .13 CURRENT WORKING CAPITAL SITUATION AND ALLOCATION OF WORKING CAPITAL .13 2.2 ACTUAL SITUATION OF WORKING CAPITAL SOURCE AND WORKING CAPITAL MANAGEMENT .16 2.2.1 DETERMINATION OF WORKING CAPITAL NEEDS 19 2.2.1 WORKING CAPITAL IN CASH MANAGEMENT 20 2.2.2 ACTUAL SITUATION OF MANAGING RESERVE INVENTORY CAPITAL 24 2.2.3 RECEIVABLES MANAGEMENT 26 2.2.4 PERFORMANCE AND EFFICIENCY OF WC MANAGEMENT 32 Working Capital Management Analysis July 2020 2.3 GENERAL ASSESSMENT OF WC MANAGEMENT OF THE COMPANY .34 2.3.1 ACHIEVED RESULTS .34 2.3.2 DETAILS OF WORKING CAPITAL MANAGEMENT: 34 PART 2: IMPROVING WC MANAGEMENT AT BAO MINH JSC 37 CHAPTER 1: FUTURE MISSIONS OF BAO MINH JSC 37 1.1 OBJECTIVES AND DEVELOPMENT ORIENTATION OF BAO MINH CONFECTIONERY JOINT STOCK COMPANY .37 1.1.1 SOCIO-ECONOMIC CONTEXT 37 1.1.2 GOALS AND DEVELOPMENT ORIENTATION 38 CHAPTER 2: SOLUTIONS TO STRENGTHEN THE WORKING CAPITAL MANAGEMENT AT BAO MINH CONFECTIONERY JOINT STOCK COMPANY .40 2.1 PROACTIVELY PLAN AND DETERMINE REASONABLE WORKING CAPITAL NEEDS 40 2.2 DEVELOP SAFE, STABLE, FLEXIBLE AND EFFECTIVE FUNDING POLICIES 41 2.3 ESTABLISH A REASONABLE WORKING CAPITAL STRUCTURE 42 2.4 STRENGTHEN CASH MANAGEMENT AND SOLVENCY .42 2.5 STRENGTHEN THE MANAGEMENT AND COLLECTION OF RECEIVABLES 43 2.6 REGULARLY MONITOR, ANALYZE AND EVALUATE THE EFFICIENCY OF WORKING CAPITAL .44 2.7 CONDITIONS FOR IMPLEMENTING THE SOLUTIONS .45 2.7.1 THE COMPANY: 45 2.7.2 THE STATE: 46 CONCLUSION 47 REFERENCES Working Capital Management Analysis July 2020 LIST OF TABLES Page TABLE 1.1 ASSET FLUCTUATIONS PERIOD 2017 AND 2018 08 TABLE 1.2 LIABILITIES AND EQUITY FLUCTUATIONS PERIOD 2017 AND 2018 10 13 TABLE 1.3 BUSINESS SITUATION IN 2016-2018 TABLE 1.4 SCALE AND STRUCTURE OF WORKING CAPITAL OF THE COMPANY PERIOD 2017 –2018 15 TABLE 1.5 DETAIL OF WORKING CAPITAL SOURCE OF THE COMPANY YEAR 2017 – 2018 18 TABLE 1.6 ACTUAL DEMAND FOR WC IN 2018 TABLE 1.7 STRUCTURE AND MOVEMENT OF CASH AND CASH EQUIVALENT TABLE 1.8 TABLE 1.9 TABLE 1.10 20 SHORT-TERM SOLVENCY CAPACITY OF THE COMPANY 2016 TO 2018 STRUCTURE AND FLUCTUATION OF THE COMPANY’S INVENTORY ASSESSMENT OF THE MANAGEMENT OF INVENTORY IN 22 23 25 26 2017 - 2018 TABLE 1.11 STRUCTURE AND FLUCTUATION OF THE COMPANY’S RECEIVABLES 28 TABLE 1.12 COMPARISON OF CREDIT CAPITAL AND THE PROPERTY CAPITAL OF THE COMPANY 30 EFFICIENCY ASSESSMENT OF RECEIVABLES IN 2017 - 31 TABLE 1.13 TABLE 1.14 TABLE 1.15 2018 PERFORMANCE EVALUATION AND EFFICIENCY OF WORKING CAPITAL USAGE FOR 2017 – 2018 SUMMARY OF EFFICIENCY EVALUATION OF CAPITAL USE IN 2017 - 2018 Working Capital Management Analysis July 2020 32 34 STATEMENT OF AUTHORSHIP I hereby declare that I am the sole author of this graduation report Each and every data and results stated in this graduation report are sincere and generated from the practical situation of the internship organization I have not used any sources other than those listed in the bibliograph and identified as references I declare this to be my own work , and that it has not been submitted before or will not be submitted at any other institutions, module courses or examinations in seek of obtaining a degree Author of the graduation thesis Student Anh Thuc Trinh Working Capital Management Analysis July 2020 ACKNOWLEDGEMENTS In the course of studying and writing thesis at the Academy of Finance, University of Toulon in pursuing for a Master degree in Corporate Finance and Management Control, besides my own efforts, I was enthusiastically taught and guided by dedicated professors from both institutions I would like to send my sincere thanks to TS Ta Huy Hung, who has dedicated, thoughtful guide me throughout the process I study, while gave me initial ideas to structure and wrap my head to the topic I would like to express my deep gratitude to all the professors who taught and helped me throughout the program I would also like to thank all the leaders and individuals at Bao Minh Confectionary Joint Stock Company for assistance and supplying me with datas of financial statements which enabled me to work through the thesis Lastly, I would like to thank my parents, and my beloved partner for all the encouragement, support, patience, understanding throughout the entirety of my academic life I truly love you Regards, Author of the graduation thesis Student Anh Thuc Trinh Working Capital Management Analysis July 2020 INTRODUCTION The Importance of subject Vietnam's economy is in the midst of transformation and operation under the mechanism of free trade, market opening and integrating with the global economy In particular, capital is considered as the heart for every business – the condition ensuring the continuity of producing and business activities In light of the highly competitive market mechanism today, profit has always been the top priority ; therefore, optimal solutions are needed to best utilize and manage capital spending, ensure that it is used in the most efficient way for producing and business activities to take place smoothly One of the crucial parts of business capital is working capital, which is the beginning and ending phase of an operation process Under the picture of increasing globalisation and drastic market competition, the working capital demand for businesses is increased, while the ability to create and raise capital of enterprises is limited Therefore, the ultimate requirement for businesses are to effectively manage working capital usage upon respectful principles for financial, credit and law-abiding Interest of subject When coming to realization the importance of working capital in a company, I am strongly interested in understanding more about the management of working capital in my internship placement Bao Minh Joint Stock Company is expanding its scope of manufacturing and wholesale activities of confectionary and related food products in Ha Noi In the context that the company currently has no designated mechanism and department for working capital mangement; therefore, the Board of Directors of the Company is highly interested in the construction of this system Stem from curiousity, I am determined to unravel the mystery or intriguing thing behind Work environment I first worked at the company as a part-time marketing associate, where my main responsibility was to strenghthen the company’s Marketing and PR platform as well as developing the company’s online website During my working experience there, I realised that the biggest problem with the company, as mentioned above, is the unstructured mechanism or department to manage on working capital This has impact sales, profit, and market position of the company, while strangles the development of the brand compared to its competitors in Vietnam Working Capital Management Analysis July 2020 Page | In light of the above-mentioned reasons, the study of topic: "Strenghthening working capital management at Bao Minh Confectionary Joint Stock Company" is practical I am hopeful that by analysing the Company’s working capital management management and providing some feasible solutions, something significant could be further executed in the future Plan and content of the report - Analyze and assess the current working capital management situation at Bao Minh Joint Stock Company to determine the of the shortcomings and limitations in using the working capital of the company - Proposing solutions and conditions for working capital management of Bao Minh Joint Stock Company - Objectives of the study: Understanding the situation of working capital management at Bao Minh Confectionery Joint Stock Company (“Bao Minh JSC”) On the theoretical basis combining reality of working capital management in the company to determine appropriate solutions to enhance the working capital management efficiency - Research scope: + Space: Research working capital and current situation of working capital management at Bao Minh JSC + Period: Financial situations of the Bao Minh JSC in 2017, 2018 + Data: Accounting books, Financial Statements of Bao Minh JSC year 2015, 2016, 2017, 2018 - Information sources Mostly secondary information: collecting information from the accounting-finance department of Bao Minh JSC, knowledge learned at school, study relevant documents, professor's material while consulting directed instructor - Data collection method + Preliminary research: learn about the internship - Bao Minh Confectionery Joint Stock Company and collect information and financial statements of the Company + Official research: Based on the Company's financial statements, collected and conducted research and analysis ; specialized documents learned in school - Working Capital Management Analysis July 2020 Page | - Structure of the topic PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC Chapter 1: Currrent situation of Working capital management at Bao Minh Confectionery Joint Stock Company Chapter 2: WC management and assessment PART 2: IMPROVING WC MANAGEMENT AT BAO MINH JSC Chapter 1: Future missions of Bao Minh JSC Chapter 2: Main solutions to enhance working capital management at Bao Minh Confectionery Joint Stock Company Working Capital Management Analysis July 2020 Page | PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC CHAPTER 1: Current situation of Working capital management at Bao Minh Confectionery Joint Stock Company 1.1 Overview of the Company 1.1.1 Main features of the Company General information about the company: o Company name: Bao Minh Confectionery Joint Stock Company o Tax code: 0101966872 o Address: Lot B2-3-3a Nam Thang Long Industrial Zone (Area B), Thuy Phuong Ward, Bac Tu Liem District, Hanoi City, Vietnam o Incorporated in 23/05/2006 under Enterprise Registration Certificate No 0101966872 issued by Hanoi Department of Planning and Investment o Charter capital: VND 60,000,000,000 o Legal representative: Director Ngo Thi Tinh o Main business lines of the Company are: ▪ Manufacture of cocoa, chocolate and sugar confectionery; ▪ Other accommodation; Detail: provide temporary or long-term accommodation facilities are single rooms, shared rooms or dormitories such as student halls, dormitories of universities; boarding houses, dormitories for pupils, students, foreign laborers and other subjects, accommodation on mobile cars, tourist tents; 1.1.2 ▪ Restaurants and mobile food service activities; ▪ Renting and leasing of motor vehicles; ▪ Travel agency activities; ▪ Tour operator activities; ▪ Freight transport by road; ▪ Non-specialized wholesale trade; Establishment and development process Bao Minh Confectionery Joint Stock Company was established and operated from 23/05/2006 under the business registration certificate No 0101966872 issued by Hanoi City Department of Planning and Investment for the first time Charter capital: VND 60,000,000,000 After nearly 15 years of establishment, the Company has lived up their mission of “Preserving and promoting Vietnam's culinary heritage, acquire and inherited national quintessence and advanced processing technology advancing, bringing joy, nutrition and health” through manufacturing traditional confectioneries with a mixture of traditional and modern secrets to create high quality products that meet the market’s demand of traditional confectionery market in Vietnam and international The Company strongly aligns with the laws while adheres to regulations and having achieved remarkable achievements; honorably received certificates of merits for product quality, efforts and contributions to the development of the industry inspecific and the country as a whole 1.2 Functions, missions and organizational structure Business Lines Accordance to Enterprise Registration Certificate No 0101966872 issued by Hanoi Department of Planning and Investment, the Company mainly operates in the following areas: o Manufacture of cocoa, chocolate and sugar confectionery; o Other accommodation Detail: provide temporary or long-term accommodation facilities are single rooms, shared rooms or dormitories such as student halls, dormitories of universities; boarding houses, dormitories for pupils, students, foreign laborers and other subjects, accommodation on mobile cars, tourist tents; o Restaurants and mobile food service activities; o Renting and leasing of motor vehicles; o Travel agency activities; o Tour operator activities; o Freight transport by road; o Non-specialized wholesale trade; Main products o Traditional treats: Beans cake, Sesame cakes, Sticky candy; o Traditional confectionery and bakery products: Banh Com, Banh Phu The, Moon Cake, Sticky cakes, Banh Khao; o Manufacturing and packaging dried fruits, o mai; o Manufacturing products served in festivals, conferences, weddings in restaurants and hotels; o Wedding ceremony and wedding decoration services; Working Capital Management Analysis July 2020 Page | ... for working capital management of? ?Bao Minh Joint Stock Company - Objectives of the study: Understanding the situation of working capital management at Bao Minh Confectionery Joint Stock Company. .. topic: "Strenghthening working capital management at Bao Minh Confectionary Joint Stock Company" is practical I am hopeful that by analysing the Company? ??s working capital management management... solutions to enhance working capital management at Bao Minh Confectionery Joint Stock Company Working Capital Management Analysis July 2020 Page | PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC CHAPTER