Analysis of business capital efficiency at ha do 1 joint stock company

Therefore, I hope to receive valuable suggestions andevaluations from teachers and friends!Thank you sincerelyHanoi, February 13, 2023Student Trang 4 TABLE OF CONTENTS DECLARATION...iAC

- -NGUYEN PHAM NGOC NAM

CQ57/09.01CLCGRADUATION THESIS

Topic: ANALYSIS OF BUSINESS CAPITAL EFFICIENCY AT HA

DO 1 JOINT STOCK COMPANY

(Advanced Education Program)

Instructors : Ph.D Pham Thi Quyen

Ph.D Dao Hong Nhung

HANOI – 2023

I declare that this thesis was written entirely by myself with the assistance ofthe instructor and is not based on the research of other writers Theinformation gathered, cited, and studied in this article is accurate and has aclear source

Student

Nguyen Pham Ngoc Nam

During the process of researching and completing the thesis, I have receiveddedicated guidance and valuable help from the lecturers of the Academy ofFinance as well as the staff of the Ha Do 1 Joint Stock Company

First of all, I would like to express my deep gratitude to the teachers, lecturers

of the Academy of Finance, the teachers of the Financial Analysis departmentwho have wholeheartedly helped and imparted specialized knowledge to mefor four years study last

At the same time, I would also like to thank the members of Ha Do 1 JointStock Company for creating favorable conditions during my internship at thecompany I wish the company will achieve more success and develop moreand more in the future

In particular, I would like to thank my teacher, Dr Pham Thi Quyen and Dr.Dao Hong Nhung, who enthusiastically guided, provided valuable commentsand shared valuable experiences and helped me throughout the process ofcompleting my thesis

In the process of completing the thesis, although I have tried to, I still havemany shortcomings Therefore, I hope to receive valuable suggestions andevaluations from teachers and friends!

Thank you sincerely

Hanoi, February 13, 2023

Student

Nguyen Pham Ngoc Nam

TABLE OF CONTENTS

DECLARATION i

ACKNOWLEDGMENTS ii

TABLE OF CONTENTS iii

ACRONYM vi

LIST OF TABLES vii

PREFACE 1

The urgency of the thesis 1

Overview of the research situation of the thesis 2

Research objectives 4

Subjects and scope of the study 4

Theoretical and practical significance 5

Research Methodology 5

Structure 6

CHAPTER I: BASIS THEORIES OF ANALYSIS OF BUSINESS CAPITAL EFFICIENCY 7

1.1 Basis theories about business capital and business capital efficiency 7

1.1.1 Business capital concept 7

1.1.2 Features of business capital 7

1.1.3 The role of business capital 8

1.1.4 Business capital classification 9

1.1.5 Classification of business capital sources 11

1.1.6 Business capital efficiency of enterprises 12

1.2 Basis theories of analysis of business capital efficiency .13

1.2.1 The concept and purpose of analysis of business

capital efficiency 13

1.2.2 Databases and methods of analyzing the efficiency of business capital use 16

1.2.3 Contents of analysis of business capital efficiency of enterprises 20

1.2.4 Capital profitability 30

1.3 Factors affecting business capital efficiency of enterprise .37

1.3.1 Objective factors 37

1.3.2 Subjective factors 39

CONCLUSION OF CHAPTER I 41

CHAPTER II: ANALYSIS OF BUSINESS CAPITAL EFFICIENCY AT HA DO 1 JOINT STOCK COMPANY 42

2.1 About Ha Do 1 Joint Stock Company 42

2.1.1 The process of formation and development of the company 42

2.1.2 The organizational management apparatus of the company 45

2.1.3 Characteristics of the company's industry and field of activity 51

The company's ongoing projects 52

2.1.4 Advantages and disadvantages of the company 53

2.1.5 Analysis of the current state of assets, capital sources and business results of the company 54

2.2 Analysis of business capital status and business capital efficiency of Ha Do 1 Joint Stock Company 75

2.2.1 Analysis of the current situation of business capital

efficiency at Ha Do 1 Joint Stock Company 75

2.3 General assessment of business capital efficiency at Ha Do 1 Joint Stock Company 108

2.3.1 Results 108

2.3.2 Limitations and causes 109

CONCLUSION OF CHAPTER II 111

CHAPTER III: SOLUTIONS TO IMPROVE BUSINESS CAPITAL EFFICIENCY OF HA DO 1 JOINT STOCK COMPANY 112

3.1 Economic context 112

3.2 Development orientation of Ha Do 1 Joint Stock Company 115

3.3 Solutions to improve the efficiency of business capital use of Ha Do 1 Joint Stock Company 116

3.3.1 Capital mobilization solution 116

3.3.2 Accelerate the flow of working capital 119

3.3.3 Improve income revenue 122

3.3.4 Improve cost management efficiency 122

3.3.5 Enhance the internal business 124

CONCLUSION OF CHAPTER III 126

FINAL CONCLUSION 127

service provision

interest and tax

LIST OF TABLES

Diagram 2.1: Organization management apparatus diagram 45

Diagram 2.2: Diagram of financial accounting department 48

Table 2.1: Structure of workers in 2021 50

Table 2.2: Analysis of fluctuations and capital structure of Ha Do 1 Joint Stock Company 62

Table 2.3: Analysis of business results of Ha Do 1 Joint Stock Company 70

Table 2.4 Overview of business capital performance of Ha Do 1 JSC 75

Table 2.5 An overview of business capital performance with companies in the same industry 78

Table 2.6 Analysis of business capital effectiveness of Ha Do 1 JSC 80

Table 2.7 Analysis of fixed capital performance 85

Table 2.8 Analysis of working capital movement rate of 88

Table 2.9 Analysis of inventory turnover rate 92

Table 2.10 Analysis of the turnover rate of receivables 95

Table 2.11 Analysis of the basic earning power at Ha Do 1 Joint Stock Company 97

Table 2.12 Analysis of return on assetsat Ha Do 1 Joint Stock Company 100

Table 2.13 Return on equity at Ha Do 1 Joint Stock Company 103

Figure 1 Chart showing the value of working capital and business capital 82

Figure 2 Fixed assets through the end of 2019-2021 86

Figure 3 Inventory value at the end of 2019, 2020 and 2021 94

Figure 4 Average share of equity and total assets 2020-2021 105

PREFACE The urgency of the thesis

*Theoretical basis

With the expansion of the market economy and the State's increasinglyrigorous macroeconomic policies, enterprises are really facing highrequirements for efficiency in capital allocation and management The Statealways supports enterprises, but is ready to supervise and investigatesuspected enterprises, especially issues related to business capital; Is businesscapital properly allocated? Does it generate the expected profit? Is capitalbeing used in the right direction for the business? Thus, it can be seen thatbusiness capital efficiency can determine the success and failure ofenterprises, so business capital efficiency is definitely always a topic thatevery business is interested in The regular analysis and evaluation ofbusiness capital efficiency to assist management entities in quickly takingmeasures to overcome limitations and promote enterprise advantages incapital management and use The goal of a business capital situation analysis

is to assess the situation of using business capital in the enterprise properly,fully, comprehensively, and objectively Consider capital allocation, theability to finance capital sources, the ability to mobilize and develop capital,and the efficiency with which those funds are used Simultaneously,analyzing business capital efficiency aims to identify internal contradictions

in capital management, analyze the causes affecting capital management, andprovide directions and measures to improve the effectiveness and efficiency

of capital management in enterprises

*Practical basis

In recent years, the state and governments have identified basicconstruction as an important manufacturing sector and a driving force in thenational economy Buildings, urban areas, transportation works, wharves, and

other products of this industry contribute essential values to the country'seconomic renewal Furthermore, as we battled the Covid-19 pandemic, webecame increasingly aware of the importance of fundamental values - themost important things in the face of adversity, from which businesses canbenefit

Ha Do 1 Joint Stock Company primarily engages in the construction andinstallation of civil and industrial projects, as well as urban infrastructureengineering works This is a significant independent material productionindustry that is tasked with reproducing fixed assets while utilizing a largeamount of society's accumulated capital, contributing significantly to GDP as

an industry that attracts foreign capital in the process of industrialization andmodernization

Because there are large-scale works, projects and architectures, andcomplex structures in construction enterprises, mobilizing and effectivelyusing business capital is always a top priority

Analysis of business capital efficiency is important in business activitiesbecause it allows the company to assess its level of capital use in order toachieve the highest efficiency at the lowest cost Simultaneously, on the basis

of providing useful information to interested parties such as investors, creditinstitutions, and so on, recognize the current financial situation in order tomake effective investment decisions

Because of the importance and current situation of using business capital, Idecided to choose the topic "Analysis of business capital efficiency at Ha Do

1 Joint Stock Company" as a good thesis to improve the company's capitaluse efficiency through my internship at Ha Do 1 Joint Stock Company

Overview of the research situation of the thesis

Business capital efficiency analysis is important and necessary inanalyzing enterprise business activities to determine the level of use with the

highest efficiency and at the lowest cost As a result, the authors are deeplyinterested in the topic of analyzing the effectiveness of using business capital,and they quickly grasp the topic and conduct current research on it Inside:

- Author Ngo The Chi, Nguyen Trong Co of the Academy of Finance(reprinted 2015) in the Syllabus of Corporate Financial Analysis has provided

a theoretical foundation for analyzing the efficiency of business capital useincluding analysis of capital use performance and profitability of capital

- Author Do Le Anh (2016) with the thesis title "Analysis of capital useefficiency at Song Da 2 Joint Stock Company" The thesis has systematizedthe basic theories on business capital efficiency, thereby applying to thesituation and offering solutions and recommendations to improve businesscapital efficiency at Song Da 2 JSC

- Author Nguyen Thi Kim Hong (2021) with the thesis topic "Analysis

of business capital use efficiency at Ha Mai Construction Investment andServices Joint Stock Company" The dissertation systematically clarified andclarified the basic reasoning for the effective analysis of the use of businesscapital by enterprises Analyze and evaluate the current situation of businesscapital use efficiency at Ha Mai Construction Investment and Service JointStock Company Propose a number of solutions to improve business capitalefficiency at the Company

- Author Nguyen Phuong Anh (2022) with the thesis topic "Analysis ofbusiness capital efficiency of Visicons Construction and Investment JointStock Company" systematized and updated the basic reasoning on theanalysis of the efficiency of business capital use of enterprises Thereby, theauthor analyzed the current state of use efficiency and analyzed and evaluatedbusiness capital efficiency at Visicons Construction and Investment JointStock Company, from which make recommendations to improve businesscapital efficiency at the Company

Thus, the aforementioned documents deal with business capital efficiency analysis, inheriting the theoretical parts of business capital efficiency analysis such as objectives, content, spending and methods that some authors have written about business capital efficiency analysis but in companies Recently, the number of new studies on the topic of business capital efficiency is not as much as before, especially in the context that the economy has been heavily affected by the pandemic Therefore, the author will continue to inherit the theory, but using analytical tools to analyze business capital efficiency of Ha Do 1 Joint Stock Company in the period of

2020 – 2021, this is the gap that the thesis author continues to research.

Subjects and scope of the study

- Object of study: Business capital efficiency

- Scope of the study:

+ Content: Analysis of business capital efficiency of Ha Do 1 JointStock Company to serve managers to make decisions to improve theefficiency of the use of business capital

+ Space: Collecting and researching business capital efficiency at Ha

Do 1 Joint Stock Company

+ Time: Data is taken from the financial statements for the years2019-2021 of Ha Do 1 Joint Stock Company

Theoretical and practical significance

*Theoretical significance

The topic has systematized the basic reasoning and updated with newupdates on the analysis of the efficiency of business capital use ofenterprises

*Practical significance

The author chose to analyze medium-sized enterprises to reflect thesituation of small and medium-sized enterprises in the industry, therebygiving practical solutions with Ha Do 1 Joint Stock Company inparticular and the group of businesses of the same size in the industry ingeneral

Data collection methods

- Direct collection: directly observe and contact objects to directly

collect necessary information, carefully record the collected results

- Indirect collection: through the documents of the internship unit such

as available documents, financial statements necessary information forthe process of completing the dissertation at the company's departments: Finance - Accounting Department and other information channels Readaccounting laws, accounting standards, and circulars to serve thedistribution of documents

*Financial analysis methods

- Collect data, system statistics, generate and analyze actual corporateprofitability data Based on the findings of the calculation and

comparison of profitability indicators, as well as the results of thequantification of the influence of factors on the indicator, makecomments and evaluations on the company's organization, management,and capital usage The assessment technique system (comparison,division, correlation relationship, and ranking) and the method of factoranalysis are the primary analytical procedures used (Dupont, continuoussubstitution, difference, balance, etc.)

After collecting, the author synthesizes, systems the data and adjusts for analytical purposes

Structure

In addition to the introduction, conclusion, appendix and list ofreferences, the main content of the thesis is structured in three chapters asfollows

Chapter 1: Basic theories about analysis of business capital efficiency

Chapter 2: Analysis of business capital efficiency at Ha Do 1 Joint Stock Company

Chapter 3: Solutions to improve business capital efficiency of Ha

Do 1 Joint Stock Company

CHAPTER I: BASIS THEORIES OF ANALYSIS OF BUSINESS

CAPITAL EFFICIENCY 1.1 Basis theories about business capital and business capital efficiency 1.1.1 Business capital concept

In the process of production and business activities, enterprises needbasic factors such as labor materials, objects of labor and labor power.However, businesses cannot meet these factors separately, so businesses need

to spend some currency in accordance with size and business conditions tohave these factors The amount of currency that is advanced for investment inprocurement, the formation of advanced assets for production and businessactivities is considered business capital

Thus, it can be said that the business capital of the enterprise is theentire amount of advance money to form the necessary assets to meet thescale and conditions for production activities business of business.Alternatively, business capital is the monetary manifestation of all assets thatthe enterprise invests and uses for the purpose of profit

1.1.2 Features of business capital

In the process of production and business, the business capital of theenterprise is inevitable and it is constantly moving and transforming the form

of expression From the initial form of monetary capital to the form ofmaterials and then back to the form of currency This process is carried outcontinuously, into a cycle and repeats the cycle This whole cycle is called theprocess of circulation, the cycle of the business capital of the enterprise Thisprocess can take place quickly or slowly, depending largely on the economicand technical characteristics of each business line, and on the level oforganization

In the conditions of a market economy, business capital is not only aprerequisite for the birth of an enterprise, but also considered a special

commodity Business capital is the monetary manifestation of certain assets(both tangible and intangible assets) that the enterprise mobilizes and uses inbusiness The business capital of the enterprise is always in motion andassociated with a certain owner Enterprises cannot buy and sell ownership ofcapital, but owners can buy and sell the right to use business capital in thefinancial market The price of the right to use business capital is theopportunity cost of using the business capital of the enterprise At the sametime, due to the impact of Profitability and risk factors, the business capital ofthe enterprise is always valuable over time A current business capital willhave a different economic value than a future business capital and vice versa.Proper awareness of the above characteristics of business capital is basicissues for businesses to mobilize and manage the use of their business capital.

in an economical, efficient way

1.1.3 The role of business capital

Business capital plays a particularly important role in the activities ofenterprises This capital has a number of prominent roles such as:

Business capital plays a prerequisite role in the formation andoperation of a business At the same time, based on this capital, it can bedivided into large, medium or small enterprises

If a business wants to operate and develop sustainably in the future, itmust have business capital For example, to operate, it is necessary to havelabor, materials, equipment or machines But to get these things, you have touse money from business capital If a business does not have enough capital,production and business activities will definitely not be conducted and thecompany cannot maintain

In business, there is always a certain transformation of facilities Onlywhen businesses have capital can leaders come up with the most effectivebusiness strategies From the capital factor, the leader will make decisions on

improving machinery and equipment, expanding production and business tocompete with other units

Business capital plays an important role in maintaining and laying thefoundation for the future development of the business Therefore, businessesmust know how to manage business capital to achieve the best efficiency

1.1.4 Business capital classification

There are many ways of classifying business capital such as by source

of formation; rotation characteristics; time of mobilization and use; scope ofuse

1.1.4.1 Classification according to the results of investment activities

According to this standard, the business capital of the enterprise isdivided into business capital invested in liquid assets, fixed assets andfinancial assets of the enterprise

Business capital invested in real estate is the amount of investmentcapital to the image of liquid assets for production and business activities ofthe enterprise, including cash and physical capital private goods, receivables,other types of business assets

Business capital invested in fixed assets is the investment capital toform tangible and intangible fixed assets, such as factories, machinery andequipment, means of transport, transmission equipment, equipment,management tools, expenses for purchasing patents, inventions, exclusiveproduct marks, advantage value on business location business enterprises

Business capital invested in financial assets is the amount of corporatecapital invested in financial assets such as stocks, corporate bonds,Government bonds, bank notes, certificates investment funds and othervaluable papers

Each type of investment asset of the enterprise has a different shelf lifeand liquidity characteristics This has a huge effect on the turnover time of

business capital as well as the level of risk in the use of business capital of theenterprise Therefore, the above classification helps businesses choose areasonable and effective investment asset structure For each enterprise, thestructure of investment capital in business assets is often not the same due todifferences in business line characteristics, investment decision choices ofeach business However, in order to achieve high business efficiency,businesses must focus on ensuring synchronization and balance productioncapacity between investment assets, while ensuring liquidity and riskdispersion of investment assets in the enterprise.

1.1.4.2 Classification according to the characteristics of capital turnover

According to the characteristics of the rotation of business capital, thebusiness capital of the enterprise is divided into fixed capital and workingcapital Fixed capital of an enterprise is the amount of capital invested tobuild or procure fixed assets used in business As the amount of advancemonetary capital that is easy to build and procure fixed assets, the size offixed capital will more or less determine the size, capacity and technical level

of fixed assets On the contrary, the economic and technical characteristics offixed equity dominate the rotation characteristics of fixed equity In which thebasic characteristics of fixed capital are: Slow turnover rate, value is graduallytransferred into product value in each business cycle, after many years justcompleted a cycle, cycle

The working capital of an enterprise is the amount of advance monetarycapital used for procurement, the formation of labor resources used inproduction and business of the enterprise as raw materials productionreserves, unfinished products, semi-finished products, finished products forconsumption, capital in advance, remain in payments The basic characteristic

of working capital is the fast flow time, the manifestation form of working

capital is always changing, its value is shifted in its entirety, times intoproduct value after each business cycle.

This classification shows the characteristics of rotation of each type ofbusiness capital, thereby helping enterprises take measures to organize themanagement and distribution of capital use business of business accordingly.Generally, in the business of the enterprise, the faster the business capitalcirculates effectively That not only helps businesses quickly recover capital,limit risks that may be encountered in business, but also overcome capitaldifficulties, preserve and develop business capital of enterprises

1.1.5 Classification of business capital sources

1.1.5.1 Classification by source

According to this standard, business capital is divided into the capitalfrom owners, contributed capital, undivided profits, capital from issued sharesand loans

Equity: This capital is formed from the capital of the owner, thecontributed capital of investors, the capital arising in the process ofproduction and business

Capital contribution: When a business is established, there is always aninitial capital contribution contributed by the owners

Undivided profit: During the operation, production and businessactivities, the enterprise will get capital if the business is effective and thecapital accumulated from profits that do not have to be shared and arereinvested

Stock issuance: Businesses can increase their capital by issuing shares

to raise capital for the business

Loans: Businesses can borrow short-term or long-term capital tocontinue operating

1.1.5.2 Classification by time of capital mobilization and use

The time spent raising and using capital is one of the factors used to classifybusiness capital If based on the above criteria, this type of capital will beclassified into the following categories:

Regular capital: This is a type of long-term capital used at least oneyear of operation of the enterprise

Temporary capital: This is a capital source used for a short-term period

of time (less than 1 year) for activities of a temporary nature or accidentallyarising in production and business activities This classification helps businessmanagers consider raising capital sources in a complex way to suit the time ofuse, financial planning and forming future capital organization intentions

1.1.6 Business capital efficiency of enterprises

The business capital efficiency is an economic category that reflects thelevel of exploitation and use of capital sources of enterprises in productionand business activities for the purpose of maximum profitability at the lowestcost

Capital efficiency is quantified through a system of indicators ofprofitability, solvency, and efficiency of using assets, These indicators areall in the process to the final result which is the correlation between the outputand input of the production process, in other words, between the resultsobtained and the cost spent on production and business activities The higherthe result compared to the cost, the higher the efficiency of using capital,business capital efficiency is a measure to assess the level of management andadministration of production and business of the enterprise Therefore,businesses that want to set growth goals and maximize value should prioritizeimproving capital efficiency business to the forefront In order to improvebusiness capital efficiency, businesses need to solve essential problems suchas:

- It is necessary to exploit capital resources thoroughly, avoid capitalbeing wasted and at the same time recognize when to downsize orspend capital to save cost and highly efficient returns.

- Enterprises need to have a business strategy for the long term, fromwhich to have a business plan, capital allocation in each short-termperiod always towards the results of scale expansion productiontissue and field of activity Always remember to mobilize and investmore in a reasonable and legal way

- Enterprises need to regularly analyze and evaluate the efficiency ofcapital use to quickly take measures when problems arise, therebypromoting the advantages

These are factors that greatly affect the performance of the enterprise

in relation to the preservation and development of the enterprise's capital

1.2 Basis theories of analysis of business capital efficiency

1.2.1 The concept and purpose of analysis of business capital efficiency

*Concept

Analysis is understood in the most general sense as the division ofphenomenal things according to certain criteria for study, considering theformation and development of that phenomenal object in a dialecticalrelationship with other things or phenomena

Analysis of business capital efficiency of enterprises is to assess thesize of business capital of enterprises, the level of investment of enterprisesfor operations for business activities in general as well as each field ofactivity, each type of asset in particular Through the size and fluctuations inthe size of the total capital as well as each type of capital, we will seefluctuations in investment level, business size, business capacity business, thefinancial capacity of the enterprise, as well as the use of capital of the

enterprise Through that, we can see the investment policy that has beenimplemented by businesses

*Purpose

Analysis of business capital efficiency is a tool to assess the quality ofcapital use activities of enterprises, through the use of analytical indicatorsand methods to assess the ability of enterprises to use financial resources inthe business process From there, assess the strengths and weaknesses in theprocess of using, managing and exploiting the use of business capital ofenterprises, find out the causes of existence, help managers make appropriatedecisions Therefore, analyzing business capital efficiency to help interestedpeople see the management and use of capital of enterprises therebymaking decisions in accordance with each goal

There are many subjects interested in analyzing business capitalefficiency of enterprises, each of them is interested in changing differentgoals The subjects interested in analyzing business capital efficiency ofenterprises are: Enterprise management entities, investors, credit providers,state management agencies, other stakeholders

- For management entities of enterprises: As those who directly runenterprises, how should managers know information about the use of capital

of enterprises? Effective or not The business performance analysis aims to:

+ Create a regular cycle to evaluate the effectiveness of managementactivities of enterprises, evaluate the management and use of business capital

- For investors: As shareholders, individuals or units that have and willinvest in enterprises, the first goal of investors when investing in enterprises is

to increase profitability, so when investing capital in enterprises, a penny thatinvestors put into businesses must create high value Thus, enterprises mustoperate their business effectively, rationally use resources to bring highprofits through which investors will make a decision whether to invest inenterprises or not In addition, when choosing to invest in enterprises throughthe information obtained from analyzing business capital efficiency atenterprises, investors will assess the position of enterprises in business, theability to develop in the future Therefore, analyzing business capitalefficiency of enterprises is one of the channels that bring useful information toinvestors

- For credit providers: Analysis of business capital efficiency will giveinformation about the ability to repay debts, profitability of capital, position

of enterprises Through information on business capital efficiency, it will bethe basis for credit providers to consider the possibility of lending capital toenterprises to meet the capital needs for production and business activities ofenterprises

- For state management agencies: These are agencies representing theState, supervising the implementation of enterprises' obligations to the state aswell as checking the compliance with the law of enterprises such as taxauthorities, customs agencies, market management Analysis of businesscapital efficiency of enterprises will provide information to state managementagencies in effectively performing the functions assigned by the State

- For other stakeholders: customers, competitors, media agencies alsopay attention to business capital efficiency of enterprises with specific goals

1.2.2 Databases and methods of analyzing the efficiency of business capital use

1.2.2.1 Databases

In order to conduct an analysis of the efficiency of the use of businesscapital, it is necessary to have a complete, timely and appropriate database.Documentation for the analysis of the efficiency of the use of business capitalcan be obtained from the following sources:

 Internal databases

The information inside the business includes:

- Financial statement system, management reporting system and otherdocuments of enterprises

+ Financial reporting system of enterprises: Financial statementsprovide economic and financial information mainly for users of accountinginformation in evaluating and analyzing business capital efficiency ofenterprises, especially listed companies, financial statements are audited on ayearly basis prior to disclosure

According to the current accounting regime (Circular 200/2014/TTBTC dated 22/12/2014 of the Ministry of Finance), the financial reportingsystem applies to enterprises of all economic sectors and all fields in Vietnamincluding the following 4 reporting forms:

Balance sheet Form B 01 - DN

Profit and Loss statement Form B 02 - DN

Cash flow statement Form B 03 - DN

Explanation of Financial Statement Form B 09 - DN

 External databases

- General information about the economic situation: It is informationabout the political, economic situation, legal environment informationabout policies related to investment opportunities, business opportunities

the downturn or growth of the economy This information can be collectedthrough newspapers, radio, television

- Information by economic sector: It is information that the operationresults of enterprises of the nature of the economic sector such ascharacteristics of the economic sector related to technical processes, productentities, characteristics of input materials, characteristics of labor, productionstructure that affect profitability, the size of the market, developmentopportunities This information can also be collected through publicchannels of industries, general statistics offices Basically, the informationcollected can be expressed by specific data However, there is informationthat cannot be expressed by data, the information collected is historicalinformation

In short, to analyze the business capital efficiency of enterprises,analysts need to collect all the above information Besides being sufficient inquantity, it is also necessary to pay attention to the quality of the datacollected for analysis Because, if the information is not guaranteed quality, itwill lead to false analysis results, management entities and investors usinginaccurate analysis results will make wrong decisions, going against theirgoals

1.2.2.2 Business performance analysis method

To conduct business performance analysis at enterprises, analysts often use acombination of specific technical methods in analysis such as evaluationmethods, factor analysis methods, forecasting methods Each method hasdifferent effects, and is used in different analytical content

* Assessment methods

- Comparison method: This is the most commonly used method in

analyzing the efficiency of business capital use This method is used toevaluate the results, determine the location and general trend of each indicator

in the shortest period of time on business capital efficiency of enterprisesbetween different business periods

+ Comparison requirements: The existence of quantities or indicators must benewborn and quantities or indicators must ensure comparative nature(ensuring consistency in units of measurement, consistency in economiccontent, and consistency in time)

+ Determine the comparative origin: The comparison root can be the value ofthe planned analysis indicator, according to the norm, or the value of theprevious period analysis expenditure (previous years) or the industry averagevalue or analytical spending of competitors

+ Comparative technique: Equal to absolute numbers or relative numbers

- Method of division: In the analysis of business capital efficiency, it is

common to use the method of dividing by angles

+ Detailed division according to the constituent parts of research expenditure:subdivide the HQKD indicator into the parts that make up the target itself

+ Detailed division according to the time arising; only minor processes,results and business performance in chronological order arise

+ Detailed division according to the arising space: subdivide the process,results and efficiency according to the place of arising and development ofresearch indicators

- Reference method: Reference is an analytical method used to study the

economic relationship between economic events and phenomena to theefficiency of business capital use of enterprises, and at the same time considerthe balance of expenditures reflecting business capital efficiency in theprocess of operation

* Factor analysis method

To analyze business capital efficiency of enterprises, people often useanalytical methods; the Dupont method, the method of determining the degree

of influence of each factor; methods of analysis of factor properties

- Dupont method: A method used to analyze an aggregated financial

expenditure into detailed financial indicators that are mutually interrelated tofind the best way to influence the aggregate financial indicator

- Methods for determining the influence of factors:

To determine the impact of factors on the efficiency of business capitaluse of enterprises, one of the following three methods can be used:

+ Continuous replacement method is a method of determining the degree of

influence of each analytical indicator in the condition that the factors arerelated to the analysis indicator in the form of equations of injury, injury andfactors must be arranged in a certain sequence The content of this method is

to replace each factor one by one according to the arranged sequence, todetermine the degree of influence of which factor one calculates the result ofthe red factor substitution, minus the result of the replacement of the ancestorthat preceded it The sum of the influence of the factors must be equal to thespecific object of the analysis (i.e the difference between the analysis periodand the original period of analysis expenditure)

+ The differences method is a method that is also used to determine the

influence of factors on the volatility of spending reflecting research changes.The conditions, content, and sequence of application of the differentialnumerical method are the same as the continuous substitution method.According to this method, in order to determine the degree of influence of thefactor on the analytical criterion, one takes the difference between the analysisperiod and the original period of that factor multiplied by the true factorbefore it in the analysis period, and multiplied by the factor behind it at theangular period

+ Balancing method: this is the method used to determine the level of

influence of factors if the analytical expenditure is related to the influencingfactor in the form of a sum or effect Determining the degree of influence of agiven ancestor on the specific object of analytical expenditure by the method

of balancing it is common to determine the difference between the actualtechnique and the origin of that factor However, it is necessary to payattention to the inversely proportional relationship, the proportional ratiobetween the influencing factor and the analytical indicator

- Methods of substance analysis of factors:

The method of analysis of the substance of the factors is carried out afterdetermining the degree of influence of the factors The goal is to have soundjudgment and predictions, on a red-blooded basis making decisions and howdecisions are made The analysis is usually carried out by specifying andsolving problems such as: Specifying the direction of impact; specify thecauses of influence (objective, subjective) on the analysis They use thebusiness capital of enterprises Specific assessment and predictions, and pointout management measures to improve the use of business capital ofenterprises in the next periods

1.2.3 Contents of analysis of business capital efficiency

of enterprises

Capital effectiveness

1.2.3.1 Business capital effectiveness

 Purpose of analysis: Analysis of business capital assists in determining

whether the management and use of business capital of the organization

is acceptable or not, whether it is fit for the features of the business line

or not Analyze the factors influencing the performance of enterprises'business capital use in the period, and propose specific solutions to

increase the efficiency of companies' business capital use in subsequentperiods.

 Analysis indicators: To analyze the performance of business capital

use of enterprises, we use the following indicators:

Business capital efficiency (HSkd)

= Average balance of business capital(S Totalrevenue(LCT )

kd)

Short-term investment coefficient (Hđ)

x Number of rotations

Inside:

Hđ: Reflecting the investment policy of the enterprise, depending

on the characteristics of the business line

financial activities + Other income

 Sequence and methods of analysis

Step 1: Identify HSkd analysis period and root period

Step 2: Identify the specific audience for analysis

∆ HS kd =HS kd1 −HS kd0

Step 3: Determine the level of influence of factorson HSkd

- The impact of the Board on HSkd

+ Impact direction: Investment coefficient (Hđ) affects in the same direction

as the performance of using business capital (HSkd)

+ Causes of influence

Objective causes: Business environment, State policies

Subjective causes: Business policies, investment policies; Qualifications oforganization, management and use of working capital

+ Evaluation method: When the contract changes, it is considered reasonablewhen the change of investment policy has improved the investment policy,especially speeding up the capital turnover of enterprises

- Number of rotations

+ Impact dimension: SV lđ affects the same direction vs HS kd

+ Cause of influence: The influence of this element is essentially subjective;its rise and fall is attributable to the capital mobilization policy as well as theenterprise's capital demands

+ Evaluation method: When analyzing this factor, compare the rate of change

of working capital to the rate of change of total income revenue. 

+ Management measures: Increase the speed of working capital flow, usecapital economically and efficiently, and shorten the time working capitalremains in each stage of the transfer process.

1.2.3.2 Fixed capital effectiveness

 Purpose of analysis: Analysis of the performance of using fixed

capital to assess the effective management and use of fixed capital ofthe enterprise, thereby assessing the use of fixed capital of theenterprise

 Analysis criteria: To analyze the performance of using fixed capital of

an enterprise, we use the following indicators:

 Sequence and method of analysis

Step 1: Identify the analysis period and the original period

Step 2: Identify the specific audience for analysis

∆ HS CĐ = HSCĐ1 – HSCĐ0Step 3: Use a continuous substitution method of factors

- The level of impact of DTT onHSCĐ

- Net revenue factor: Provided that other factors remain constant, net revenuewill affect in the same direction as fixed capital performance This factor isinfluenced by the production policy of the enterprise such as quantity, quality,and type of products Sales policy of the enterprise: sales methods,advertising, product market,

- Average fixed capital factor: Provided that other factors remain constant, theaverage fixed capital has the opposite effect on the performance of using fixedcapital This factor is influenced by capital mobilization policies, fixed assetuse and investment policies,

1.2.3.3 Working capital turnover

 Purpose of analysis

Analyzing the working capital turnover rate will help the management entitysee whether the working capital movement rate is fast or slow, increase ordecrease, which speed affects the working capital flow rate of the enterprise

to make appropriate management decisions

 Analysis criteria

To analyze the working capital turnover rate, we use 2 indicators: the number

of working capital cycles and the working capital turnover period

(1) Number of working capital flows

Number of working

capital turnover

cycles

Average working capital(S lđ)

The labor target reflects how many rounds the working capital of theenterprise has turned The greater the number of active capital turnovercycles, the faster the working capital movement rate and vice versa

(2) Working capital turnover period

SV lđ

Klđ = Average workingcapital

Average net turnover per day(d)

The working capital turnover period indicator shows how many days 1working capital turnover expires on average The smaller the working capitalturnover period, the faster the working capital movement and vice versa

 Analysis method: Use comparative methods and factor analysis

methods to assess the rate of working capital flow

 Sequence and method of analysis

Step 1: Identify the student and the original period and the original period

Step 2: Identify the specific audience for analysis

Comparison of indicators between the analysis period and the original period:

∆ SV lđ = SV lđ 1 −SV lđ 0

∆ K lđ = K lđ 1 −K lđ 0

Step 3: Determine the level of influence of factors

Use a continuous substitution method to determine the impact of each factor

- The impact of the average working capital balance factor:

Step 4: Analyze the nature of the influence of the factors

- Average working capital balance

+ Impact direction: Provided that other factors remain constant, the

average working capital balance has the opposite effect on the working capitalturnover rate and affects in the same direction as the working capital rotation period

+ Reason: The influence of this factor is basically subjective, the

increase and decrease of the factor is due to the influence of capital

mobilization policies as well as capital needs of enterprises

+ Evaluation method: When analyzing this factor, it is necessary to

compare the rate of change of working capital with the rate of change of total income revenue

+ Management measures: To speed up the flow of working capital, the basic measure is not to reduce capital By reducing capital in some ways, it is also reducing the size of the business, reducing the competitiveness of the

enterprise Therefore, it is necessary to use capital economically and

efficiently and shorten the working capital remaining in each stage of the

+ Causes of influence: Total income revenue is influenced by net

revenue, financial revenue and other income Net sales are influenced by the number of goods sold, the results of sales, and the price of goods In addition, net revenue is also influenced by external factors such as average social

income, the replaceability of products of the same type, the season of product

consumption, the quality of advertising to introduce items, Thus, the

influence of this factor is both subjective and objective

+ Assessment method: Consider the relationship between LCT and Slđ

+ Management measures: This factor study shows that the measure to increase the working capital movement is to increase the total income

revenue, especially to increase the revenue of product consumption and that isthe achievement in the consumption and provision of services to the outside and this is also a business goal if you want to increase market share and

maximize profits intercalary

Step 5: Determine the amount of working capital saved or wasted due to the changing working capital flow rate

VLD (±¿ = d1 x ∆ K lđ

1.2.3.4 Inventory turnover

Inventory is the capital that reserves necessary goods of each enterprise,

especially manufacturing and trading enterprises Regularly evaluating the speed of inventory turnover to find ways to increase their turnover contributes

to increasing the speed of capital turnover of the business

This indicator indicates that in the period the inventory rotates several rounds

(2)Average inventory maturity

This indicator indicates the average number of inventory days in the period Ifthe turnover of inventory decreases, the average inventory maturity increases,i.e the speed of inventory turnover is slow The increased average inventoryterm will have to increase storage costs, financing costs if the inventory isfinanced with flying capital, which means that the average inventory termincreases will reduce profitability, increase financial losses for the business,i.e increased financial risk and vice versa In the event that the inventoryturnover coefficient decreases, the average inventory term increases, it isnecessary to consider specifying the cause.

 Analysis method: When Analyzing the rate of inventory turnover we

use the comparison method and the factor analysis method (similar to theworking capital turnover analysis method)

- Compare the indicators (Inventory turnover, Average inventory term)between this period and the previous period, between the indicators of theenterprise and the industry averages Based on the magnitude of the target, thecomparable results provide specific assessments of the speed of inventoryturnover, calculating the amount of capital goods saved or wasted due to thechange in the speed of goods turnover

Savings or wasted reserves are defined as follows:

GTK(±¿ =gv1 x ∆ K TK

Inside:

gv1 =;Number of days∈the reporting period GV 1

GV1 is the average inventory turnover per day during the analysis period

1.2.3.5 Receivables turnover

Analyze the speed of receivables turnover to provide information to business managers with credit policies and debt management solutions suitable for

each debtor

This indicator shows how many rounds of receivables are rotated on average

in the study period

(2)Average debt collection period

The debt recovery coefficient decreases, the time the occupied capitalincreases, i.e the speed of capital turnover of receivables decreases, thefinancial risk of the enterprise increases

When analyzing, it is necessary to consider specifying the reasons for thechange in the rate of turnover of receivables in order to have an appropriateassessment The variable rate of turnover of receivables can be due to severalreasons:

- Due to the expansion of sales, the expansion of commercial credit policiesfor customers (increased credit level, long credit period) to increasecompetitiveness with competitors, to keep large customers or be forced toextend payment terms imposed by large customers

- Due to the favorable state of the economy, businesses tend to acceptextended payment terms for customers.

- Due to the weak management of receivables of enterprises, old debts thathave not been collected have appeared new debts, bad debts exist This is aweak manifestation of receivables management, businesses need to quicklytake corrective measures

 Analysis method: Use comparison method and factor analysis method

- Compare the criteria between the analysis period and the original periodbetween the indicators of the enterprise and the industry averages Based onthe magnitude of the indicator, the comparison results give specificassessments of the speed of turnover of receivables, calculate the amount ofcapital saved or wasted when the rate of turnover of receivables changes.Savings or wasteful receivables are defined as follows:

VPT (±¿ = ¿dtt1 x ∆ K PT

- Determine the level of influence and analyze the nature of each factor

Note: To serve debt management requirements, it is possible to analyze indetail the speed of receivables of each object according to detailed documentssuch as: Customer groups, suppliers,

1.2.4 Capital profitability

The profitability of the enterprise is the ability to make a profit from thecapital of the enterprise The profitability of the enterprise is analyzedaccording to 2 contents: Business capital profitability, Equity profitability

Basic earning power

 Analysis purpose: The profitability of business capital reflects the

effectiveness of capital flows invested in the enterprise, reflecting theeffectiveness of management, exploitation and use of assets formed afterinvestment

 Analysis indicators: The basic profitability of business capital is

evaluated through 2 indicators: Basic earning power (BEP) and Return onassets (ROA)

1.2.4.1 Basic earning power (BEP)

Reflects on average how much profit each business capital involved in theproduction and business process in each given period will generate, regardless

of the influence of the origin of business capital and corporate income tax; Inother words, this indicator reflects the profitability of business capital when itdoes not take into account the origin of business capital and corporate incometax

Basic earning power

x Efficiency in the use of working

capital

BEP = Hđ x SVLĐ x HHĐ

Inside:

Hđ: Short-term investment coefficient

SVLĐ: Number of working capital turnover cycles

HHĐ: Operating profitability before interest and tax