(Luận văn) improving financial situations of minh dang construction and trading joint stock company

––––––––– ACADEMY OF POLICY AND DEVELOPMENT INTERNATIONAL SCHOOL OF ECONOMICS AND FINANCE lu an n va to p ie gh tn GRADUATION THESIS w Topic: “Improving Financial Situations of Minh Dang d oa nl Construction and Trading Joint Stock Company” CompanyCompany”Company” oi lm ul nf va an lu Supervisor: Mrs Dang Thuy Nhung z at nh Student: Vo Thi Bich Ngoc Student ID: 5083402210 z Class: TC CLC 8.3 m co l gm @ n va ac th i an Lu Hanoi, June 2021 si ACKNOWLEDGEMENT I would like to express my gratitude to the faculty members of the Faculty of International Economics - Finance for facilitating my completion of the graduate thesis, especially Ms Dang Thuy Nhung, who patiently taught me during the process and provided me with helpful suggestions and ideas In addition to that, I would like to express my heartfelt gratitude to the leaders of Minh Dang Construction and Trading Joint Stock Company, especially lu Mr Hoang Thanh Hanh, as well as the company's Finance - Accounting an va Department and Business Department, who enthusiastically supported me during n my internship to gh tn Developing a company's business is a large subject for me, and it requires p ie a great deal of professional expertise in the discipline As a result, despite best w efforts, flaws cannot be avoided I'm looking forward to hearing from teachers oa nl and friends on how I can enhance my study d Student oi lm ul nf va an lu Vo Thi Bich Ngoc z at nh z m co l gm @ an Lu n va ac th ii si TABLE OF CONTENTS ACKNOWLEDGEMENT ii TABLE OF CONTENTS iii LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS lu INTRODUCTION an n va Origin of the study tn to Objective of the study ie gh Scope of the study p Research Methodology 1: LITERATURE d CHAPTER oa nl w Structure of the study REVIEW ON THE STATEMENT lu va an ANALYSIS ul nf 1.1 Overview of financial statement oi lm 1.1.1 Definition of financial statement z at nh 1.1.2 Function of financial statement 1.1.3 Categories of financial statements z gm @ 1.1.3.1 Balance sheet m co l 1.1.3.2 Income statement 1.1.3.3 Cash flow statement 10 an Lu 1.1.3.4 Notes 11 ac th iii n va 1.2 Overview of financial statements analysis 11 si 1.2.1 Definition of financial statements analysis 11 1.2.2 Role of financial statements analysis 11 1.2.3 Process of financial statement analysis 12 1.2.3.1 Economic analysis 12 1.2.3.2 Industry analysis 13 1.2.3.3 Company analysis 14 lu 1.2.4 Financial statement analysis techniques 14 an n va 1.2.4.1 Common size analysis 14 1.2.4.3 Ratio analysis 15 p ie gh tn to 1.2.4.2 Horizontal analysis 14 w 1.2.4.4 Dupont identity 21 oa nl 1.3 Factors affecting financial statement analysis 22 d 1.3.1 Subjective factors 22 an lu 1.3.2 Objective factors 22 nf va oi lm ul CHAPTER 2: FINANCIAL STATEMENT ANALYSIS OF MINH DANG TRADING AND CONSTRUCTION JOINT-STOCK COMPANY IN THE z at nh PERIOD OF 2018 – 2020 24 2.1 Overview of Minh Dang Construction and Trading Joint Stock z gm @ Company 24 2.1.1 Establishment and development 24 l m co 2.1.2 Functions and business line 25 an Lu 2.1.3 Organizational structure 26 ac th iv n va 2.1.3.1 Organizational chart 26 si 2.1.3.2 Role of department 26 2.2 Background of economy and industry 28 2.2.1 Economic analysis 28 2.2.2 Industry analysis 30 2.2.2.1 Segmentation of construction industry 30 2.2.2.2 Profit rate of the Vietnam construction industry 32 lu 2.2.2.3 Evaluating the Vietnam construction industry life cycle 32 an n va 2.3 Financial statement analysis of minh dang construction and trading 2.3.1 Balance sheet analysis 34 ie gh tn to joint stock company in the period of 2018 – 2020 34 p a Analysis of volatility and asset structure of the company 34 oa nl w b Analyzing the capital source's volatility situation and structure 42 d 2.3.2 Income statement analysis 47 lu va an 2.3.3 Cashflow statement analysis 54 oi lm ul nf 2.3.4 Ratio analysis 62 a Short term solvency ratios 62 z at nh b Asset utilization ratios 65 c Long term solvency ratios 68 z @ gm d Profitability ratios 74 m co l 2.3.5 Compare financial ratios of companies in 2020 with average industry 78 an Lu 2.3.6 Compare financial ratios of companies in 2020 with company in the ac th v n va same industry 79 si 2.3.7 Dupont identity 81 2.4 Evaluation of financial situation 86 2.4.1 Achivements 86 2.4.2 Limitations 86 2.4.2.1 Disadvantage about capital structure 87 2.4.2.2 Disadvantage about cash flow 87 lu 2.4.2.3 Disadvantage about account payable management 88 an n va 2.4.2.4 Disadvantage about inventory management 88 tn to 2.4.3 Causes of limitations 89 ie gh CHAPTER 3: SOLUTIONS TO IMPROVE FINANCIAL SITUATION OF p MINH DANG TRADING AND CONSTRUCTION JOINT STOCK TOWARDS nl w COMPANY d oa 2025…………………………………………………… 90 va an lu 3.1 Back ground 90 3.1.1 World situation 90 ul nf oi lm 3.1.2 Domestic situation 92 3.1.2.1 Socio-economic situation 92 z at nh 3.1.2.2 The development prospects of the sector in the coming period 93 z gm @ 3.2 Business orientation of Minh Dang Construction and Trading Joint Stock Company towards 2030 95 l m co 3.3 Swot analysis 96 an Lu 3.4 Solutions to improve financial situation of Minh Dang company towards 2025 102 n va ac th vi si 3.3.1 Solutions to improve the efficiency of capital structure management 102 3.3.2 Solutions to improve the efficiency of cash flow 103 3.3.3 Solutions to improve debt management 103 3.3.4 Solutions to increase the efficiency of inventory management 103 CONCLUSION 105 lu REFERENCE 106 an n va p ie gh tn to d oa nl w oi lm ul nf va an lu z at nh z m co l gm @ an Lu n va ac th vii si LIST OF TABLES FIGURE 1: ORGANIZATIONAL STRUCTURE OF MINH DANG CONSTRUCTION AND TRADING JOINT STOCK COMPANY'S MANAGEMENT APPARATUS 26 FIGURE 2: SEGMENTATION OF VIETNAM CONSTRUCTION INDUSTRY 31 FIGURE 3: PROFIT RATE OF THE VIETNAM CONSTRUCTION INDUSTRY 32 FIGURE 4: VIETNAM CONSTRUCTION GROWTH RATE 32 lu FIGURE 5: CONSTRUCTION INDUSTRY GROWTH IN THE WORLD 33 an va FIGURE 6: ASSET STRUCTURE OF THE COMPANY 37 n FIGURE 7: CASH FLOWS FROM OPERATING 57 gh tn to FIGURE 8: CASH FLOWS FROM INVESTING ACTIVITIES 59 p ie FIGURE 9: CASH FLOWS FROM FINANCIAL ACTIVITIES 60 w FIGURE 10: NET CASH FLOW OF COMPANY 61 oa nl FIGURE 11: THE CHART REFLECTS THE GROWTH OF CAPITAL OF MINH d DANG CONSTRUCTION AND TRADING JOINT STOCK COMPANY IN 2018 – lu an 2020 68 nf va FIGURE 12: GRAPH OF THE RELATIONSHIP BETWEEN LIABILITIES AND oi lm ul EQUITY OF MINH DANG CONSTRUCTION AND TRADING JOINT STOCK COMPANY IN 2018 - 2020 69 z at nh FIGURE 13: PROFITABILITY RATIOS 75 z m co l gm @ an Lu n va ac th si LIST OF FIGURES FIGURE 1: ORGANIZATIONAL STRUCTURE OF MINH DANG CONSTRUCTION AND TRADING JOINT STOCK COMPANY'S MANAGEMENT APPARATUS - 26 FIGURE 2: SEGMENTATION OF VIETNAM CONSTRUCTION INDUSTRY - 31 FIGURE 3: PROFIT RATE OF THE VIETNAM CONSTRUCTION INDUSTRY - 32 lu FIGURE 4: VIETNAM CONSTRUCTION GROWTH RATE - 32 an n va FIGURE 5: CONSTRUCTION INDUSTRY GROWTH IN THE WORLD - 33 FIGURE 7: CASH FLOWS FROM OPERATING - 57 gh tn to FIGURE 6: ASSET STRUCTURE OF THE COMPANY - 37 p ie FIGURE 8: CASH FLOWS FROM INVESTING ACTIVITIES 59 w FIGURE 9: CASH FLOWS FROM FINANCIAL ACTIVITIES 60 oa nl FIGURE 10: NET CASH FLOW OF COMPANY 61 d FIGURE 11: THE CHART REFLECTS THE GROWTH OF CAPITAL OF MINH lu va an DANG CONSTRUCTION AND TRADING JOINT STOCK COMPANY IN 2018 – EQUITY OF LIABILITIES OF THE RELATIONSHIP BETWEEN oi lm FIGURE 12: GRAPH ul nf 2020 - 68 MINH DANG CONSTRUCTION AND AND TRADING JOINT STOCK z at nh COMPANY IN 2018 - 2020 69 FIGURE 13: PROFITABILITY RATIOS 75 z m co l gm @ an Lu n va ac th si LIST OF ABBREVIATIONS Acronym lu ROA Return on assets ROE Returrn on equity EM Equity multiplier MĐ Minh Dang Construction and Trading Joint Stock Company CTX Vietnam Trade and Construction Investment Corporation an COGS Mean Cost of good sold n va tn to Market research and analysis unit, owned by Fitch Solutions General Statistics Office w FPT securities d oa nl FPTS GSO p ie gh BMI oi lm ul nf va an lu z at nh z m co l gm @ an Lu n va ac th si Regarding exchange rate: Despite the fact that the prime rate in the United States has been changed three times, there have been no significant changes in global currency markets since the expected rate cut The market RMB exchange rate varied considerably and reached new highs as the Chinese government actively altered the reference rate 3.1.2 Domestic situation 3.1.2.1 Socio-economic situation Although this is the lowest increase in the period 2011-2020, GDP increased by 2.91 percent year-on-year in 2020 amid the Covid-19 epidemic lu Despite serious changes affecting many socio-economic sectors, Vietnam has an achieved remarkable successes, with the highest growth rate in the world in va n 2020 to gh tn The company registration scenario in 2020 has created great results thanks to the government's and business community's devotion and efforts to ie p fight the negative impacts of the Covid-19 epidemic The overall number of nl w newly registered businesses in 2020 is expected to be 134.9 thousand, down d oa 2.3 percent from the previous year, but the average registered capital per an lu enterprise, has risen by 32.3 percent to 16.6 billion VND According to the nf va findings of a business trends study of processing and manufacturing lm ul companies, they were more optimistic about their production and business situation in the first quarter of 2021 than in the fourth quarter of 2020, with 81 z at nh oi percent ranking it as steady or outstanding The Covid-19 outbreak was complicated across the world in 2020, but z it was well-managed in the country, so business activity and consumer services @ l gm increased significantly in the last months of the year However, transportation, particularly international transportation, has a variety of challenges co m In order to promote the economy's recovery from the Covid-19 an Lu epidemic, the State Bank of Vietnam raised the operating interest rate in 2020 n ac th 92 va Despite tough pandemic developments, insurance business operations si continue to function smoothly and safely; capital mobilization for the stock market economy increased by roughly 20% over the previous year Because of the disastrous impact of the Covid-19 outbreak on all manufacturing and commercial activities, realized social investment capital grew by 5.7 percent in 2020, the smallest gain since 2011 However, the rate of increase in realized capital from the State budget was highest from 2011 to 2020 The year 2020 witnessed substantial attempts in import and export activities, despite the fact that the local and worldwide economies were lu severely impacted by the Covid-19 pandemic and worldwide trade disruption an The total value of imported and exported goods is reach to 543.9 billion dollars va n in 2020, up 5.1 percent from the previous year to gh tn As a consequence of growing petrol and local gas costs in accordance with global fuel costs, growing rice prices in accordance with export prices, ie p and increased consumer demand at the end of the year, the (CPI) climbed by nl w 0.1 percent in December 2020 compared to the previous month and by 0.19 d oa percent compared to the same time last year The consumer price index an lu climbed 3.23 percent on average in 2020 compared to 2019 The commodity nf va trade rate fell by 0.74 percent in 2020 compared to 2019, owing to the negative lm ul export price of Vietnamese commodities abroad versus the price of importing commodities from other countries into Vietnam z at nh oi 3.1.2.2 The development prospects of the sector in the coming period The fourth industrial revolution has ushered in a new era with far- z reaching impacts on all aspects of life and fields One of the most affected @ l gm business sectors is construction and commerce, which are closely tied to science and technology co m Due to very efficient vaccination deployments in countries including the an Lu United States, the United Kingdom, and Israel, the COVID-19 epidemic n ac th 93 va appears to have come to an end in recent weeks The need for construction is si also increasing Furthermore, construction technology is quickly evolving and attracting substantial investment capital According to London-based construction technology investor Concrete VC, “the rise of venture capital in construction technology has outpaced the space of the larger venture capital market.” According to BMI, Vietnam's construction sector will expand at a 6.9% annual rate over the next ten years, which is lower than the previous ten-year average (7.1%) but still higher than the worldwide average, implying that the Vietnamese construction industry has reached the end of its expansion phase lu and is set to enter the restructuring phase an Vietnam's young population and fast urbanization boost construction va n demand, with a focus on residences, industry, offices, and urban infrastructure gh tn to The young population is a huge human resource as well as a long-term driving force behind the increasing demand trend By 2020, Vietnam's population is ie p predicted to grow to 97.58 million According to the World Bank, Vietnam's nl w golden population period began in 2006 and will last until 2033 As the golden d oa population ebbs, development demand will shift away from schools and an lu industries, offices, and toward health care buildings to support the senior nf va population Demand for housing, commercial, public buildings, and urban lm ul infrastructure is being driven by urbanization patterns Only around a third of Vietnam's population now resides in urban areas, which is low in comparison z at nh oi to other nations in the region This emphasizes Vietnamese cities' enormous development potential According to the World Bank, Vietnam's urban z population would rise at a 2.6 percent annual rate over the next ten years, @ l gm ranking it third among ASEAN countries Cities will host more than half of Vietnam's population by 2039, increasing to 57.3 percent by 2050 co m High and stable economic growth, low inflation and interest rates, and an Lu perfect demand development conditions The stable and rapidly growing n ac th 94 va economy of Vietnam produces significant demand Vietnam's economy is now si the world's third most stable, with the fastest growth rate in the area In 2021, Vietnam's GDP is predicted to expand by 6.7 percent, placing it 14th out of 192 countries and territories worldwide and second among ASEAN members The construction industry has benefited from low inflation and borrowing rates, which has created a favorable climate for both contractors and clients In recent years, Vietnam's inflation rate has been stable, hovering between 2% and 3% each year, or about half of the 20-year average However, in compared to the rest of the region, Vietnam's inflation is high and showing signs of gradually growing, and the country's economy is currently producing over its lu capacity, which may lead to an increase in the cost of basic goods Since 2015, an Vietnam's financing interest rates have remained consistent at low levels, va n benefiting both clients and building contractors Even if inflation rises, interest gh tn to rates in Vietnam will remain steady, as global interest rates tend to fall in response to trade disputes, boosting economic activity ie p Construction is a conditional activity, which means it must be nl w supervised by the government through legal instruments enforced by state d oa management agencies Vietnam's Ministry of Construction is the country's an lu government-run construction agency, and the Law on Construction 2014 is the nf va most important piece of law The legislative framework for the building sector lm ul in Vietnam, on the other hand, has not kept pace with the country's socioeconomic development and has to be updated on a regular basis z at nh oi 3.2 Business orientation of Minh Dang Construction and Trading Joint Stock Company towards 2030 z gm @ Minh Dang Construction and Trading Joint Stock Company is one of the enterprises with the goal of meeting the demand for construction materials and l co machinery in the manufacturing industry in the North market, while m maintaining the credibility of product quality through policies on production, an Lu distribution, and sales n va ac th 95 si lu an - The Company's key goals are to run a profitable business, maintain and expand the Company's resources, and n va perform the duties assigned by the Board of Directors Maximize the company's overall performance In the field of civil - The company would devote all of its resources to developing a variety of new products and machines for the entire p ie gh tn to and industrial design, becoming a leading company in the corporation and the construction industry Vietnamese market in order to retain market share and supply construction enterprises and contractors As a result, in the future, Minh Dang Construction and Trading Joint Stock Company will focus not only on its main product, titanium and oa nl w plastic, but also on its secondary products d - In terms of the industry, the Company plans to invest in order to increase market share and become a supplier to fu an 3.3 Swot analysis nv a lu customers in Vietnam ll Table 12: Swot analysis oi m Weakness - Well-developed distribution network - Knowledgeable and highly qualified workers - High credibility to customers and suppliers - Good free cash flow - Capital source growth well - Current asset predominate - Limited market information collection - Capital occupied high - Large financial costs - Extremely low profit margin compared to industry average - The inventory reserve ratios is very large compared to other companies in the same industry and size - Operating and Investing activies have not effect z at nh Strength z m o l.c gm @ SWOT matrix an Lu n va ac th 96 si lu an Opportunity S-O n va p ie gh tn to - Vietnam signs FTA - Vietnam construction market have large potential - Urbanization trends increasingly - Vietnam receive a lot of investment capital from FDI - Vietnam State Bank’s policies about support and stimulate to the econonic domestic growth and business activities of companies during Covid – 19 pandemic happening - Domestic inflation still maintain a low level W-O d oa nl w - Having appropriate policies, coordinating - Develop market research and sales promotion with good staff resources of the Company activities to penetrate new markets and attract to improve business efficiency more customers - Looking for opportunities to increase the - Having the advantage in expanding and company's share in the market developing a well-developed customer network and distribution network in the domestic market to penetrate new markets ll fu an nv a lu - Stable free cash flow and good capital source help the company implement projects quickly m S-T oi Threat - Maintain and enhance the company's - Invest to research and development advantages to build Minh Dang's position in - Maintain the mentality and actively market the construction market share growth of the firm - Building business strategies and expanding domestic and foreign relationships to improve business efficiency and overcome weaknesses - Build a weekly staff development training program to avoid being weaker than competitors z at nh z m o l.c gm @ - Highly dependent on price of raw material - Fierce competition among competitors, especially foreign companies - Big company have more qualified staff - Covid – 19 pandemic has caused many challenges to the economy W-T an Lu n va ac th 97 (Source: Analyzed by author) si ➢ Strength - Well-developed distribution network due to Minh Dang company has expand business size to the North market from 2018 - With 16 years of experience in the market, the company has a team of workers with relatively high efficiency - Based on the accumulated experience, effectively expanding the company's business scale along with the quality of works, construction procedures are always guaranteed which has helped the company get customer satisfaction and trust from suppliers lu - The Minh Dang company has free cash flow and good capital source an because it has high equity, large amounts of cash available in the company and n va profits invested in other companies and banked these have helped the company to - Focusing on investing in short-term assets has also helped the company p ie gh tn complete projects well, attract new projects and make a lot of profit save costs and increase profits oa nl w ➢ Weakness d - Collecting market information is still poor, not focusing on investing lu an in distribution channels to collect information and research about customers nf va - The company's capital is still heavily occupied by customers and z at nh oi profits lm ul suppliers, causing many risks and losing investment opportunities to generate - The assets in the company are mainly leased assets which increase the company's expenses and reduce profits z gm @ - The number of inventory, inventory turnover and days of inventory on hand are all higher than peers in the same industry and of the same size which l with losing many opportunities compared to competitors m co makes more costs and reduces the company's ability to generate revenue along an Lu - Operating and Investing activities have not really effective because n va these activities all have negative values, especially, operating activity must 98 ac th si positive to be good for the company which shows that the company is having difficulty in paying and paying interest due to the Minh Dang company have more finance lease and finance loans activities ➢ Opportunity - In recent times, Vietnam has signed and negotiated 17 free trade agreements, most newly are VIFTA and VN-EFTA FTA These agreements by the government can help companies integrate into the world market, especially with the expansion of Minh Dang's market share globally - The Vietnam construction market is considered a potential market that lu has attracted a lot of FDI capital and interest from large companies in the world an This is a great opportunity for companies to perform well and receive n va international investment to gh tn - The trend of urbanization is increasing, so the demand for construction p ie of houses, commercial centers, urban infrastructure and so on which also increases This will help companies receive more customers and projects oa nl w - During the period of economic decline due to the Covid 19 pandemic, many companies have faced difficulties in business, including Minh Dang d an lu Company, the government has had timely and reasonable policies to promote nf va economic growth which includes as follows: reduce loan interest rate, tax lm ul reduction, and so on These are extremely helpful for Minh Dang company to continue to develop business activities and increase profits z at nh oi - Although the economy dramatically decreased compared to previous years and the policy on interest rates was greatly reduced, Vietnam's inflation z gm @ rate remained low (under 4%) compared to other countries in the region This illustrates that the market is stable and does not put pressure on commodity l prices which helps the company not to be affected too much by prices m co ➢ Threat an Lu - The construction industry is highly dependent on the price of raw n va materials When the price of raw materials is low, the company will save costs 99 ac th si and increase profits By contrast, when the price increases, it will be a huge barrier for businesses when implementing projects - Vietnam's construction market is very potential and has attracted the attention of large construction companies in the world There have been many international companies entering the Vietnamese market which are companies have grown very well in both capital and scale and these companies also have many market shares in other countries Minh Dang Company will not only have to compete with domestic companies but also with foreign companies above They compete mainly on price to attract more customers This will put pressure lu on the profit and revenue of Minh Dang company Moreover, foreign an companies and large domestic companies both have better staff who can help n va companies have better development policies to gh tn - The COVID-19 pandemic has caused economic decline and stop doing business This will make it difficult for companies to business and affect the ie p company's profitability oa nl w ➢ S–O - Combining good staff teams in the company with preferential policies d an lu from the government which incude as follow: reduce loan interest rates, reduce nf va tax, economic support, and so on, after that establishing effective policies that lm ul bring business projects new and improve profits for the company - Receiving positive things when Vietnam has entered free trade z at nh oi agreement, Minh Dang company can penetrate new markets to increase development prospects for the company The company takes advantage of its z gm @ existing potential in terms of trust with customers and suppliers, along with a well - developed distribution network in the country and the strength of capital co l source to confidently develop on a global scale m - The trend of urbanization is increasing along with the need to build an Lu houses, commercial centers and infrastructure, this will be an advantage for n ac th 100 va the company when receiving projects compared to other companies when the si capital resource are strong and available which can immediately meet the capital for the company when implement and finish the project quickly ➢ W- O - Market research and sales promotion activities such as marketing and advertising are lacking To attract more customers, the company must take advantage of the development potential of the construction industry to develop the market, research and enter other more promising markets, and develop and strengthen cooperation outside the company - Looking for opportunities to increase the company's share in the market lu because Vietnam's construction market is very potential and attracting a lot of an FDI To this, the company needs to have policies to deal with the backlog n va of profits, expenses, and other company activities to - Use the advantage of a well-developed distribution network, the trust p ie gh tn ➢ S–T of customers and suppliers to the company, and the available financial strengths oa nl w to continue to maintain and create a position of the Minh Đang comapy in the d construction market, thereby attracting more projects and customers lu an - In order to protect its market share from increasingly fierce domestic nf va and international competition, the company must develop strategies such as lm ul flexible price, stronger trade promotion, better customer service, expand z at nh oi relationships with domestic and foreign partners, and so on - Develop training programs to develop staff weekly ➢ W–T z gm @ - The company must take advantage of possibilities and invest in research and development in order to take quickly change of the market and l m co activity of competitors an Lu n va ac th 101 si - Maintain the mentality and actively market share grow of the firm with their strategies which will help the Minh Dang company restrict and reduce the company's internal and external weaknesses 3.4 Solutions to improve financial situation of Minh Dang company towards 2025 3.3.1 Solutions to improve the efficiency of capital structure management - Firstly, the conpany build an optimal capital structure - Secondly, actively mobilize capital for business activities, always ensuring timely capital sources for production and business with the lowest cost lu of capital an - The company should consider a plan to raise capital in the direction of n va lowering the debt ratio and increasing equity by: to gh tn + Consider investment projects the company is implementing and withdraw investment capital to have capital suitable with the development of ie p the company nl w + The company has not issued ordinary shares, preference shares can d oa research more about the issuance, or go on the floor to attract investment capital an lu or can attract more from outside individuals by capital contribution nf va + Accumulate capital from retained earnings, increase accumulated lm ul profits to invest in business expansion + Exploiting more appropriated capital sources such as: having to z at nh oi pay the seller, the buyer pay in advance, which helps the company appropriated without cost of capital and low cost z + Make the most of commercial credits, undue debts such as salaries, @ l gm social insurance and so on The use of this capital will significantly reduce the cost of capital, thereby improving efficiency business capital co m + Balance between occupied capital and capital used in another n va ac th 102 an Lu company to bring the best effect to the company si 3.3.2 Solutions to improve the efficiency of cash flow - The company needs to establish an effective management policy to ensure the balance between cash in and cash out for the business operation - Identifying the deficit, or surplus cash flow of the company by planning cash flow, measuring and analyzing cash flows in and out of each given time period Simultaneously, proposing cash flow control strategies, achieving a balance of cash flow in and out, and managing the cash flow of corporate transactions in line with the business's life cycle 3.3.3 Solutions to improve debt management lu - Enterprise should have policies to deal with their secured assets and an increase the appropriation of capital by the suppliers va n - Regularly compare debts, continue to promote the collection of due to gh tn receivables, urge customers to pay on time Measures to encourage customers to pay early and on time To attract business customers should have discounts ie p at the appropriate rates (payment discounts) which will help the company nl w quickly collect money without having to take out a loan to meet production d oa needs while waiting for customers to pay off backlogs an lu - In addition, it is necessary to conduct debt classification, monitor bad nf va debts There are several bad debts for Minh Dang Construction and Trading lm ul Joint Stock Company As a result, it is also important to pay attention to longterm debts, particularly the provision of bad debts, so that the company's z at nh oi financial condition is not harmed when bad debts occur Debt collection should be done on a regular basis and should not be left until the end of the year z - Along with strengthening debt collection, business must also pay off @ l gm past-due obligations, reduce debt capacity, improve reputation, and reduce financial risks co m 3.3.4 Solutions to increase the efficiency of inventory management an Lu - The calculation determines the necessary material structure in the plan n ac th 103 va year to reserve inventories, to avoid capital shortage or capital stagnation si affecting the production and business process On the basis, proactively choose suppliers in terms of quantity, quality and price Improved warehouse management and management to limit the loss of inventories - With the characteristics of the commercial industry, the process of acceptance and settlement is relatively complicated The company needs close coordination between departments to complete technical, financial documents to meet the investor's requirements and quickly answer the investor's problems with acceptance documents to acceptance process, settlement is happening faster lu - Reduce investment in inventory through solutions to enhance inventory an management n va p ie gh tn to d oa nl w nf va an lu z at nh oi lm ul z m co l gm @ an Lu n va ac th 104 si CONCLUSION Vietnam is on the path to international economic inclusion and growth, with a focus on small and medium-sized businesses Researching the corporate financial situation and providing financial solutions to improve efficiency Business performance in a business is essential Researching corporate finance activities is one of the important activities in the management of each business Financial research is important and must be done on a daily basis because it impacts management decisions and the quality of company development During the practical work at the unit, the enthusiastic help of the teacher Mrs lu Dang Thuy Nhung, and based on the knowledge learned at the Faculty of an International Finance, I would like to offer some reference solutions with the n va desire to contribute to better business performance at the Minh Dang to Due to limited terms of time, as well as the ability to recognize in the ie gh tn Construction and Trade Joint Stock Company p process of research and assess the financial situation inevitable shortcomings nl w As a result, I eagerly anticipate receiving feedback from teachers and friends in d oa order to continue to develop this thesis an lu I'd like to thank Mrs Dang Thuy Nhung once more for her unwavering nf va support and guidance during the creation of this topic I'd like to express my lm ul gratitude to the company and my coworkers at Minh Dang Vietnam Construction and Trading Joint Stock Company for their assistance in Thank you very much! z at nh oi completing this thesis z m co l gm @ an Lu n va 105 ac th si REFERENCE MSc Tran Thi Quyen, 2018, Posted in Industry and Trade magazine "Analyzing the financial situation at Song Da Consulting Joint Stock Company" Luong Hong Thai, 2019, "The Financial Situation at Sao Viet Joint Stock Company" Master Thesis in Economics Dr Ngo The Chi (editor) - Associate Professor, PhD Nguyen Trong Co, 2015, "Curriculum on corporate financial analysis" texbook - Finance Publishing House lu K.R Subramanyam, 2009, “Financial statement analysis” texbook an STEPHEN A ROSS, 2011, “Corporate finance” texbook n va Associate professor of PhD Nguyen Nang Phuc, 2009, “Financial statement to gh tn analysis” Dr Bui Van Van - Dr Vu Van Ninh (co-editor), 2015, "Business finance ie p textbook" - Finance Publishing House nl w Financial statements of Minh Dang Construction and Trading Joint Stock d oa Company in periods 2018 - 2020 an lu Management reports of Minh Dang Construction and Trading Joint Stock nf va Company from 2018 to 2020 Overview industry FPTS 2018 – 2020 11 https://www.gso.gov.vn 12 https://www.investopedia.com z at nh oi lm ul 10 z m co l gm @ an Lu n va 106 ac th si