FPT UNIVERSITY CAMPUS CAN THO Individual Assignment [FIN202] Lecturer Nguyen Hai Tuan Topic Financial statement analysis Course FIN202 Student name Doan Phuong Anh Code CS171506 Class BA1706 Ema[.]
FPT UNIVERSITY- CAMPUS CAN THO Individual Assignment [FIN202] Lecturer: Nguyen Hai Tuan Topic: Financial statement analysis Course: FIN202 Student name: Doan Phuong Anh Code: CS171506 Class: BA1706 Email: AnhDPCS171506@fpt.edu.vn Can Tho, 06/2023 Table of Contents I INTRODUCTION ABOUT HA TAY PHARMACEUTICAL JOINT STOCK II FINANCIAL STATEMENT ANALYSIS Collect the most recent years financial data a Balace Sheet b Income Statement Common size analysis Comment on trend analysis and compare with peer group of industry average 2.1 Common-size Balance Sheets a Comment on trend analysis 10 b Compare with peer group 12 2.2 Common-size Income Statement .14 a Comment on trend analysis 15 b Compare with peer group 16 Ratio analysis Calculate, comment on trend and compare with peer group 18 a Comment on trend .19 b Compare with peer group 20 Dupont analysis Calculate, comment on trend and compare with peer group What are the main factors that drive ROE? 24 a Comment on trend .25 b Compare with peer group 25 c What are the main factors that drive ROE? .25 Comment on the Statement of Cash flows What can you conclude from the information found in this statement about the financial health of the company? 26 III CONCLUSION 29 IV Summarize 29 Perspective about the company’s futute .29 Recommend solutions 29 REFERENCES 30 V Relations in the DuPont System of Analysis for BiBiCa in 2022 31 I INTRODUCTION ABOUT HA TAY PHARMACEUTICAL JOINT STOCK Type: Ha Tay Pharmaceutical Joint Stock Industry:Manufacturing/Manufacturingchemicals, pharmaceuticals/Manufacturing drugs and pharmaceuticals Founded: Ha Tay Pharmaceutical Joint Stock, formerly known as Ha Tay Pharmaceutical Enterprise, was established in 1965 Headquarters: No 10A, Quang Trung Street, Quang Trung Ward, Ha Dong District, Hanoi City Key people: Mr Le Van Lo (chairman) and Mr Le Anh Trung (vice chairman/deputy general director) Products: pharmaceuticals, pharmaceutical materials, cosmetics, nutritional foods and medical equipment The company's main products are neotonide, clovaszol, flammencap and hatamintox Ha Tay Pharmaceutical Joint Stock Company (DHT), formerly known as Ha Tay Pharmaceutical Enterprise, was established in 1965 In 2001, the Company changed to a joint stock company The company specializes in manufacturing and trading pharmaceuticals, pharmaceutical materials, cosmetics, nutritional foods and medical equipment The company's main products are neotonide, clovaszol, flammencap and hatamintox The company has a distribution system in most of the northern provinces The main functions and tasks of the company are: The company specializes in manufacturing and trading pharmaceuticals, pharmaceutical materials, cosmetics, nutritional foods and medical equipment The company has a modern factory, a young and dynamic team of technicians, and a wide distribution system The company also has the services of manufacturing to order, consignment import and export and raw material trading, and the company also provides services to its partners such as production to order, import and export by order mining and trading of raw materials entrusted import and trading of raw materials The system of machinery and factory equipment is regularly upgraded, promoting the creativity and dynamism of the collective, Ha Tay Pharmaceutical has risen to become one of the largest pharmaceutical manufacturing enterprises in Vietnam For a company, people are the most important resource Therefore, attracting, treating and fostering talents is always the top concern of the company The company's leadership has the right and progressive human resource policies, creating a team of qualified and experienced managers, young and dynamic technicians, well-trained workers a basically In recent years, the Company has attracted more than 80 university pharmacists for long-term service at the company II FINANCIAL STATEMENT ANALYSIS Collect the most recent years financial data a Balace Sheet BALANCE SHEET FOR Ha Tay Pharmaceutical AS AT 31 DECEMBER (VND) Items 2022 2021 2020 CURRENT ASSETS Cash and cash equivalents 93.132.277.381 59.669.255.771 60.494.389.520 Short-term financial investment 53.000.000.000 350.000.000.000 Short-term receivables 367.327.333.198 249.077.479.940 294.575.890.630 Inventories 460.628.778.743 339.706.421.868 373.509.979.280 Other current assets 36.848.705.090 8.833.668.266 4.809.982.395 Total current assets 1.010.937.094.412 1.007.286.825.845 733.390.241.825 0 Fixed-assets 142.215.687.322 149.631.111.004 104.800.694.663 Long-term assets in process 301.451.382.709 64.931.019.021 63.328.466.585 NON-CURRENT ASSETS Long-term receivables Long-term financial investment 11.143.932.268 9.486.075.146 8.001.815.096 Other non-current assets 3.754.174.146 6.255.689.126 10.524.977.336 Total non-current assets 458.565.176.445 230.303.894.297 186.655.953.680 53.697.940.895.875 41.734.323.235.194 33.394.164.263.694 29.761.106.035.257 22.364.710.509.820 16.102.256.902.439 2.518.849.630.581 763.945.324.646 492.617.960.249 32.279.955.665.838 23.128.655.834.466 16.594.874.862.688 21.417.985.230.037 18.602.917.400.728 16.796.539.401.006 2.750.000.000 2.750.000.000 2.750.000.000 21.417.985.230.037 18.605.667.400.728 16.799.289.401.006 TOTAL ASSETS LIABILITIES AND OWNER’S EQUITY LIABILITIES Current liabilities Non-current liabilities Total liabilities OWNER’S EQUITY Owner’s equity Funding sources and other funds Total owner’s equity TOTAL LIABILITIES AND EQUITY 53.697.940.895.875 41.734.323.235.194 33.394.164.263.694 b Income Statement INCOME STATEMENT FOR Ha Tay Pharmaceutical FOR YEAR ENDING 31 DECEMBER (VND) Items Revenue 2022 1.837.469.503.390 2021 1.609.495.349.224 2020 2.007.078.938.478 Revenue deduction 74.898.746 131.339.365 603.768.936 Net revenue 1.837.394.604.644 1.609.364.009.859 2.006.475.169.542 Cost of goods sold 1.650.138.175.756 1.455.341.542.511 1.767.422.172.628 187.256.428.888 154.022.467.348 239.052.996.914 Revenue from financing acvtivity (EBITDA) 25.119.593.408 30.724.604.694 14.354.544.701 Financial expenses 16.435.313.942 14.099.188.588 16.401.441.493 14.303.549.138 13.993.022.062 13.323.351.965 2.970.883.142 1.996.401.228 1.362.992.045 Selling expenses 23.611.608.588 25.876.254.960 55.395.213.547 Administrative expenses 61.194.688.833 66.076.396.117 74.237.448.035 114.105.294.075 80.691.633.605 108.736.430.585 9.451.734.850 9.243.892.239 11.894.463.346 333.475.220 422.578.596 95.000.000 9.118.259.630 8.821.313.643 11.799.463.346 123.223.553.705 89.512.947.248 120.535.893.931 24.259.059.410 18.122.945.188 23.772.713.505 0 654.305.794 98.964.494.295 71.390.002.060 96.108.874.632 Gross Profit - Among them: Interest Expense Revenue divided affiliates Net operating profit (EBIT) Other income Other expenses Other profit Earnings before tax (EBT) Current Income tax Deferred Income Tax Profit Common size analysis Comment on trend analysis and compare with peer group of industry average 2.1 Common-size Balance Sheets COMMON-SIZE BALANCE SHEET FOR Ha Tay Pharmaceutical AS AT 31 DECEMBER (VND) 2022 CURRENT ASSETS Cash and cash 93.132.277.381 equivalents Short-term 53.000.000.000 financial investment Short-term 367.327.333.198 receivables 460.628.778.743 Inventories % of total 0,17 2021 % of total 2020 % of total 59.669.255.771 0,14 60.494.389.520 0,18 0,10 350.000.000.000 0,84 0,00 0,68 249.077.479.940 0,60 294.575.890.630 0,88 0,86 339.706.421.868 0,81 373.509.979.280 1,12 Other current assets 36.848.705.090 0,07 8.833.668.266 0,02 4.809.982.395 0,01 Total current assets 1.010.937.094.412 1,88 1.007.286.825.8 45 2,41 733.390.241.825 2,20 0,00 0,00 0,00 0,26 149.631.111.004 0,36 104.800.694.663 0,31 301.451.382.709 0,56 64.931.019.021 0,16 63.328.466.585 0,19 11.143.932.268 0,02 9.486.075.146 0,02 8.001.815.096 0,02 3.754.174.146 0,01 6.255.689.126 0,01 10.524.977.336 0,03 0,85 230.303.894.297 0,55 186.655.953.680 0,56 NON-CURRENT ASSETS Long-term receivables 142.215.687.322 Fixed-assets Long-term assets in process Long-term financial investment Other noncurrent assets Total non-current assets TOTAL ASSETS 458.565.176.445 1.469.502.270.857 100,0 1.237.590.720.1 42 100,0 920.046.195.505 100,00 LIABILITIES AND OWNER’S EQUITY LIABILITIES Current 563.142.547.244 38,3 479.078.850.773 liabilities Non-current 107.519.064.657 7,3 5.166.600.000 liabilities 670.661.611.901 45,6 484.245.450.773 Total liabilities OWNER’S EQUITY Owner’s equity Funding sources and other funds Total owner’s equity TOTAL LIABILITIES AND EQUITY 798.840.658.956 798.840.658.956 1.469.502.270.857 38,7 565.460.429.711 61,5 0,4 4.972.900.000 0,5 39,1 570.433.329.711 62,0 54,4 753.345.269.369 60,9 349.612.865.794 38,0 0,00 0,00 0,00 54,4 753.345.269.369 60,9 349.612.865.794 38,0 1.237.590.720.1 42 100,0 920.046.195.505 100,0 100,0 a Comment on trend analysis Current assets: Current assets account for only 2.20% and less than current liabilities, which is one of the signs that the liquidity position of the business is weak Total short-term assets tend to increase over the years: total short-term assets in 2020 is 733,390,241,825 VND, by 2021, an increase of 1,007,286,825,845 VND (increasing to 273,896,584,020 VND, equivalent to an increase of 37% compared to the previous year) In 2022, it continues to increase to 1,010,937,094,412 VND (an increase of 3,650,268,567 VND compared to 2021, the proportion of 2022 has increased to 0.36% compared to 2021) This can be explained by an increase in current assets, specifically: o Cash and cash equivalents: From 2020 the amount is 60,494,389,520 VND to 59,669,255,771 VND by 2021 (reduced by 825,133,749 VND and the proportion also decreased by 1% compared to 2020) But by 2022, it will increase to 93,132,277,381 VND (up to 33,463,021,610 VND and a much higher proportion of 56% compared to 2021), which shows that the company currently has a stable cash flow when giving light gifts over the years But reflecting businesses are having difficulty in paying, low liquidity o Short-term investment: In 2020, the company did not spend money to invest in short-term finance, and in 2021 Ha Tay Pharmaceutical invests 350,000,000,000 VND in short-term financial investment Finally, in 2022, Ha Tay Pharmaceutical will make a short-term investment of about 53,000,000,000 VND (the proportion is down more than 84.8% compared to 2021) In 2020, with the complicated development of the epidemic, some industries are restricted in activities, so increasing financial investment is a good choice This shows that businesses are reducing financial investment, even though business results are not good, but Ha Tay Pharmaceutical Joint Stock stock is quite high o Short-term receivables: From 2020 to 2021, the company implemented a debt collection policy and receivables also decreased to 15.4% The company's implementation of the customer debt collection policy helps the company return capital and avoid customers appropriating capital in the difficult time of the upcoming Covid-19 epidemic In 2022, the Covid epidemic situation was stable, the company relaxed its credit policy and short-term receivables also increased slightly to 367,327,333,198 VND (up 118,249,853,258,000 VND and 47.4% increase by 47.4% billion VND) compared to 2021) o Inventories: From 2020 to 2021, due to the Covid-19 epidemic, inventories decreased but not significantly at the rate of 9.05%, equivalent to 33,803,557,412,000 VND The reason is that the company specializes in providing drugs and pharmaceuticals, which at this stage are in great need of drugs and pharmaceuticals In 2022, inventories increased by 120,922,356,875,000 VND compared to 2021 (about 35.5%), the main reason is that after the pandemic, the economy suffered heavy damage, people were no longer worried about COVID-19 so consumers also reduce their demand for drugs and pharmaceuticals o Other short-term assets: In 2021, other short-term assets increased by 83.65%, equivalent to an increase of more than billion VND In 2022, it will continue to increase by 36,848,705,090 VND, an increase of more than 28 billion VND compared to 2021 Non-current assets: Non-current assets in 2021 compared to 2020 increased by 23,384%, equivalent to 43,647,940,617,000 VND The amount of long-term assets increased steadily mainly because the company invested in fixed assets with a steady increase each year In 2022, it will continue to increase sharply by 99%, equivalent to 228,261,282,148,000 VND This shows that the company has upgraded equipment and factory machinery and possesses long-term stable assets of high value that increase the company's productivity and operational efficiency Total assets: The company's total assets have grown strongly in the past three years, increasing by nearly 34.51% in 2021 and 18.73%, in 2022, showing that Duc Ha Tay Joint Stock Company is constantly expanding production and business despite pressure force of the pandemic Covid-19 disease 2020 The expansion of production and business has brought corresponding revenue, so it can be said that this is a company with a high growth rate and worth considering for investment Ratio analysis Calculate, comment on trend and compare with peer group RATIOS ANALYSIS FOR Ha Tay Pharmaceutical Financial ratio 2022 2021 2020 Current ratio 1,7952 2,1025 1,2970 Quick ratio 0,9772 1,3935 0,6364 3,5824 4,2841 4,7319 101,8881 85,1985 77,1356 5,0021 6,4613 6,8114 72,9699 56,4902 53,5866 Total asset turnover 1,2504 1,3004 2,1808 Fixed asset turnover 12,9198 10,7555 19,1456 Total debt ratio 0,4564 0,3913 0,6200 Debt-to-equity ratio 0,8395 0,6428 1,6316 Equity multiplier 1,8395 1,6428 2,6316 38,4079 5,7666 8,1613 1,7562 2,1957 1,0774 Gross profit margin 0,1019 0,0957 0,1191 Operating profit margin 0,0621 0,0501 0,0542 Profit margin 0,0539 0,0444 0,0479 EBIT return on assets 0,0776 0,0652 0,1182 Return on assets 0,0673 0,0577 0,1045 Liquidity ratios: Effiency ratios: Inventory turnover Days’ sales in inventory Account receivable turnover Days’ sales outstanding Leverage ratios: Time interest earned Cash coverage Profitability ratios: Return on equity 0,1239 0,0948 0,2749 a Comment on trend Liquidity Ratio: The liquidity ratio in 2021 (2.10 VND) is higher than in 2020 (1,297 VND) By 2022, there will be a slight decrease to 1.80 VND In general, the current ratio of the business shows the level of optimism about the company's ability to pay shortterm debt, thereby increasing confidence for shareholders Quick ratio in years from 2020-2022 (1,297-2.10-1.80) shows that the impact of inventory is relatively small for businesses The company can still pay short-term debt without selling off its inventory Effiency ratios: Inventory turnover decreased over the years 2020 (4.73), 2021 (4.28), 2022 (3.58) It proves that the enterprise has an inappropriate inventory policy The number of days to rotate an inventory cycle increases gradually over the years Looking at the indexes, we can see that on average, it only takes about 77.14 days for businesses to rotate one round of inventory in 2020, 85.20 days in 2021, and a sharp increase in 2022 to 101.89 Through the data, it can be seen that businesses that have not managed well the rotation of inventory can lead to customers easily abandoning the business because of long waits Another positive signal when the enterprise's AR revenue decreases from 2020 to 2022 (6.81 - 6.46 - 5.00), although a slight decrease, it also shows that the enterprise has increased its ability to collect debts collection and debt of customers The outstanding balance of daily sales has increased over the years, the ratio from 2020 to 2022 is 53.59 - 56.49 - 72.97, proving that the enterprise is having difficulty in converting credit sales into cash face However, the ratios show signs of decreasing year by year, indicating that the company has a policy to improve this Asset turnover of the enterprise is low Specifically, the rates from 2020 to 2022 are 2.18 – 1.30 – 1.25 It's clear that raitos are falling for the past years Prove that the company is having difficulty using its assets to generate revenue Similarly, fixed asset turnover also shows signs of decreasing year by year, from 2020 to 2022 the index is 19.15 – 10.76 – 12.92 Although asset turnover is higher, policy changes should still be considered to raise fixed asset turnover to a higher level Leverage Ratio: