Analyzing the efficiency of capital use at the parent company vietnam national petroleum group (petrolimex)

Analyze the actual effectiveness of capital use at the Parent company -Vietnam National Petroleum Group...482.2.1.Analyze the efficiency of using business capital...482.2.2.Analyze the a

MINISTRY OF FINANCE ACADEMY OF FINANCE - - Student: Dang Khanh Uyen Class: 57/09.01CLC GRADUATION THESIS TITLE ANALYZING THE EFFICIENCY OF CAPITAL USE AT THE PARENT COMPANY - VIETNAM NATIONAL PETROLEUM GROUP (PETROLIMEX) Major: Financial Analysis Major code: 09 Supervisor: PhD Nguyen Thi Thanh PhD Tran Thanh Thu Ha Noi - 2023 Graduation thesis Academy of Finance DECLARATION I hereby declare that I myself have written the submitted Bachelor Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this study I clearly marked and separately listed all the literature and all other sources which I employed producing this academic work, either literally or in content The author of the thesis Dang Khanh Uyen Dang Khanh Uyen i CQ57/09.01CL Graduation thesis Academy of Finance ACKNOWLEDGEMENT The internship opportunity I had with Vietnam National Petroleum Group (Petrolimex) was a great chance for learning and professional development Therefore, I consider myself as a very lucky individual as I was provided with an opportunity to be a part of it I am also grateful for having a chance to meet so many wonderful people and professionals who led me through this internship period Besides, I am using this opportunity to express my deepest gratitude and special thanks to Ph.D Nguyen Thi Thanh and Ph.D Tran Thanh Thu who in spite of being extraordinarily busy with her duties, took time out to hear, guide and keep me on the correct path in this report completion and internship period It is my radiant sentiment to place on record my best regards, deepest sense of gratitude to the staff of Finance and Accounting Department of Vietnam National Petroleum Group (Petrolimex) for their mentoring which were extremely valuable for my study both theoretically and practically I perceive this opportunity as a big milestone in my career development I will strive to use gained skills and knowledge in the best possible way and I will continue to work on their improvement, in order to attain desired career objectives Dang Khanh Uyen ii CQ57/09.01CLC Graduation thesis Academy of Finance TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENT ii TABLE OF CONTENTS .iii LIST OF ABBREVIATIONS .v LIST OF TABLES vi LIST OF DIAGRAMS/ CHARTS vii INTRODUCTION CHAPTER THEORETICAL BASIS FOR ANALYZING EFFICIENCY OF USING CAPITAL AT AN ENTERPRISE 1.1 Theory of the efficiency of using capital at an enterprise 1.1.1 Definition and characteristics of capital .8 1.1.2 Classification and the role of business capital 1.2 Theory of analyzing the capital use efficiency at an enterprise 16 1.2.1 Definition and objectives of analyzing the capital use efficiency 16 1.2.2 The method to analyze the efficiency of using capital in the firm 18 1.3 Database 23 1.4 The content of analyzing the capital use efficiency at an enterprise 25 1.4.1 Analyze capital use efficiency 25 1.4.2 Analyze the profitability of capital in the firm 34 CHAPTER ANALYZE THE ACTUAL SITUATION OF CAPITAL USE AT THE PARENT COMPANY - VIETNAM NATIONAL PETROLEUM GROUP 40 2.1 Overview of the Parent company - Vietnam National Petroleum Group 40 2.1.1 Brief Introduction about the Company 40 2.1.2 The development process and organizational structure of the Parent company - Vietnam National Petroleum Group 41 2.1.3 Operations of the Parent company (Petrolimex) 45 2.2 Analyze the actual effectiveness of capital use at the Parent company - Vietnam National Petroleum Group 48 2.2.1 Analyze the efficiency of using business capital 48 2.2.2 Analyze the actual efficiency of using fixed capital 53 2.2.3 Analyze the flow of working capital ratio 56 2.2.4 Analyze the flow of inventory 62 2.2.5 Analyze the flow of short-term receivables 64 2.3 Analyze the actual profitability of capital use at the Parent company - Vietnam National Petroleum Group 67 Dang Khanh Uyen iii CQ57/09.01CLC Graduation thesis Academy of Finance 2.3.1 Analyze the actual basic profitability of business capital 67 2.3.2 Analyze the actual net profitability of business capital 70 2.3.3 Analyze the actual profitability of owner’s equity 75 2.3.4 General comparison of profitability from capital to other companies in the same industry .81 2.4 A general evaluation of the Parent Company - Vietnam National Petroleum Group's effectiveness in using its business capital 84 2.4.1 Results .84 2.4.2 Drawbacks .85 2.4.3 Reasons 86 2.4.4 Recommendations 87 CHAPTER SOLUTIONS TO IMPROVE THE EFFICIENCY OF USING CAPITAL AT PARENT COMPANY - VIETNAM NATIONAL PETROLEUM GROUP 88 3.1 Socio-economic context 88 3.1.1 The state of the global economy 88 3.1.2 The state of the Vietnamese economy 89 3.2 Targets and development orientation of the Parent company - Vietnam National Petroleum Group in the coming period 92 3.2.1 Targets .92 3.2.1 Development orientation 93 3.3 Analyze the Strength, Weaknesses, Opportunities and Threats of the Company (SWOT model) 97 3.3.1 Strength 97 3.3.2 Weaknesses 97 3.3.3 Opportunities 98 3.3.4 Threats .98 3.4 Solutions to improve efficiency of using capital at an enterprise 99 3.5 Recommendations and suggestions 103 3.5.1 For the Parent Company - Vietnam National Petroleum Group 103 3.5.2 For our State 104 CONCLUSION 106 REFERENCES 107 APPENDIX .109 Dang Khanh Uyen iv CQ57/09.01CLC Graduation thesis Academy of Finance LIST OF ABBREVIATIONS No Abbreviation Full meaning BEP Basic earning power CIT Corporate income tax COGS Cost of goods sold EBIT Earnings before interest and taxes JSC Joint Stock Company NWC Net working capital PLX Vietnam National Petroleum Group PVT PetroVietnam Transportation Corporation ROA Return on assets 10 ROE Return on equity 11 ROS Return on sales 12 VIP Vietnam Petroleum Transport JSC (VIPCO) 13 VND Vietnam dong Dang Khanh Uyen v CQ57/09.01CLC Graduation thesis Academy of Finance LIST OF TABLES Table 2.10: Analyze profitability from capital to other companies LIST OF DIAGRAMS/ CHARTS Dang Khanh Uyen vi CQ57/09.01CLC Graduation thesis Academy of Finance Dang Khanh Uyen vii CQ57/09.01CLC Graduation thesis Academy of Finance INTRODUCTION Rationale of the study In the context of globalization and economic integration, the global economy is changing continuously, competition is getting more intensive day by day, forcing nations in general and businesses in particular to perform better in order to survive and compete successfully in both domestic and international markets Economic integration has brought a lot of benefits to the Vietnam economy According to World Bank report and General Statistics Office report, import-export turnover increased generally (up 15.1% over the same period last year), tourism, service activities, trade and transportation also tended to positively recover, GDP till to the third quarter of 2022 grew 8.83% over the same period last year (reaching 13.67%) However, the Vietnam economy is exposed from significant pressures such as political conflicts, domestic and global inflation, supply chain disruption, etc These external factors have caused many difficulties for businesses in operations and controlling efficiency of using capital Therefore, the regular analysis of the company's business activities, especially the analysis of efficiency and the situation of capital used of the enterprise plays an important role because it can accurately assess the level of raising and using the capital, helping managers catch all developments and results of business activities accurately At the same time, it will help managers identify advantages and limitations of using capital, then make management decisions to enhance capital efficiency Additionally, analyzing and assessing capital use efficiency of a business can benefit many stakeholders such as investors, debtors, suppliers Dang Khanh Uyen CQ57/09.01CL Graduation thesis Academy of Finance Vietnam National Petroleum Group (Petrolimex) is one of the State- owned economic groups that dominate the domestic petroleum market It operates a network of retail gas stations with more than 2,550 facilities spread across 63 provinces that consistently provides enough and on-time types of petroleum for both the needs of the country's security and the general public The assessment of the correct cost of capital is always one of the most significant and top concerns of the Board of Directors, with the goal of maximizing profits, continuously developing to reach the international level and becoming the leading energy group in Vietnam By doing so, the Board of Directors can identify the causes of fluctuations and provide solutions to enhance the performance of the company, optimal capital utilization, assisting the enterprise's commercial operations in achieving optimum efficiency Along with the aforementioned factors and the real-world circumstances surrounding the Vietnam National Petroleum Group (Petrolimex), I decided to study the topic “Analyzing the efficiency of capital use at the Parent Company - Vietnam National Petroleum Group (Petrolimex)” in my undergraduate thesis Literature Review Efficiency of using capital is critical to a company and other related stakeholders since it helps the company identify its strengths and weaknesses; from which it proposes some solutions to help the company improve the efficiency of capital use Many scholars examine this topic from different perspectives to identify factors affecting capital use efficiency and to suggest solutions for financial management Some typical studies on this topic include: Dang Khanh Uyen CQ57/09.01CLC