Trang 1 NGUYEN THU HOAI CQ57.09CL.1_LT2GRADUATION THESISTOPIC: ANALYZING THE FINANCIAL OF ENTERPRISES: A CASE OF AGC LIMITED COMPANYMajor: Financial Analysis Advanced Education ProgramCo
THEORETICAL BASIS FOR ANALYSIS OF ENTERPRISES
Overview of analysis of Enterprises Financial situation
1.1.1 Enterprises Financial Analysis Concepts and Objectives
1.1.1.1 Concept of Analyzing the financial situation of Enterprises
Enterprises finance plays an important role, not only in each business itself but also in the economy Enterprises finance activities are the driving force for the development of each country in which there is a production and business cycle: investment, production, consumption and distribution, in which the Cycle of capital is always associated with the movement of goods.
One of the tools that helps financial managers manage effectively is to analyze their financial situation Analyzing the financial situation is very important to understand the financial situation of that enterprises Through the analysis of the financial situation, it is possible to assess the business performance as well as future risks and prospects of the business Therefore, the analysis of the financial situation of the enterprises is a concern of many groups of subjects Each group has different information needs, so each group tends to focus on different aspects of enterprises finance.
In terms of the definition of the concept of financial situation analysis, there are many different interpretations from home and abroad, coming from a lot of sources First of all, according to the "Corporate Finance
Analysis Symire" of the Academy of Finance, enterprises finance analysis is defined as follows: "Corporate/enterprises financial situation analysis is the overall method of allowing the assessment of past and present financial situation, predicting the future financial situation of the business, Help managers make effective management decisions that align with their goals”
Many other researchers say: "Analyzing the financial situation of the enterprise is a system of methods to assess the financial situation of the business during a certain period of operation On that basis, it helps business managers make the right decisions in the business process."
The above views, although there are differences in interpretation, are united: Analyzing the financial situation of enterprises is the overall methods used to assess the financial situation of the business, in order to provide financial information to interested subjects.
From the above arguments, it can be said that the analysis of the enterprises financial situation is the overall use of analytical methods to assess the financial situation, helping the interested audience to recognize the financial situation in the past, predict the future financial situation as well as financial risks that the business can In the face of it, making decisions that are appropriate for the benefit of the business.
1.1.1.2 Objectives for analysis of enterprises financial situation
Every business of the business is closely related to each other Therefore, only the financial situation of the business can be fully and deeply assessed in its real state The level of achievement of economic and financial objectives of a period is expressed through the system of economic and financial indicators of enterprises To become a powerful tool to help business managers make the right decisions in business, analyzing the financial situation of the business needs to achieve the following objectives:
- Assess the financial situation of enterprises on various aspects such as capital structure, assets, liquidity, cash flow, efficiency of asset use, profitability, financial risk, to inform financial decision-making managers.
- Orient the decisions of business managers in a way that is in line with the actual situation of the enterprise such as investment decisions, funding, profit distribution,
- Become the basis for financial forecasts, helping analysts predict the financial potential of the business in the future.
Thus, from the perspectives of business management, managers need information to control and direct the production and business situation of the enterprise Therefore, they often have to pay attention to all aspects of financial situation analysis Analyzing the financial situation of enterprises helps them to guide investment decisions, capital structure, profit distribution, evaluation of business performance to take appropriate adjustment measures More than anyone else, business managers need to have enough information to implement financial balance, assess the past financial situation to conduct financial balance, profitability, liquidity, repayment, main risks of the business In addition, the orientation of decisions of the board of financial directors, decisions for investment, financing or analysis of equity returns.
1.1.2 Source of information using analysis of enterprises financial situation
Analysis of financial situation is aimed at assessing the state of the business's financial situation, making financial forecasts that help with decision-making and help in the projection of future results of the business.
To be able to conduct an analysis of the financial situation requires a necessary database, providing complete, timely and appropriate information.
Information for financial situation analysis can be categorized by a variety of criteria According to the scope and content reflected, the information used in sexual analysis consists of two basic sources: information from the accounting system and information outside the accounting system.
*Information from the accounting system mainly includes financial statements and some bookkeeping documents such as balance sheet, business results report, cash flow report, detailed report on production and business expenses by factor, report on the results of production and business of enterprises, report on the situation of increasing and decreasing fixed assets, increasing and reducing equity, accounts payable and liabilities,
Financial statements are reporting systems prepared in accordance with current accounting standards and regimes that reflect the main economic and financial information of the unit The financial statements contain the most summary information on the situation of assets, equity and liabilities as well as the financial situation, business results, cash flow situation in the period of the enterprise Financial statements provide economic and financial information mainly to users of accounting information in assessing, analyzing and predicting the financial situation and business results of enterprises The corporate financial reporting system consists of
+A balance sheet is a consolidated financial statement that broadly reflects the total value of existing assets and the source of the formation of a business's assets at a given time Data on the Balance Sheet shows that the entire value of existing assets is according to the structure of assets and the structure of capital sources forming the assets The data on the balance sheet is used to calculate capital growth indicators.
Content of Analyzing of enterprises finance
1.2.1 Analysis of assets and capital sources of enterprises a, Asset Situation Analysis
Assets more or less, increased or decreased, allocated to each stage, each stage reasonable or not will greatly affect the business results and financial situation of the business Analyze the asset situation to see the size of the assets of the enterprise, the level of investment of the enterprise for business activities in general as well as each field of operation, each type of asset in particular Thereby seeing fluctuations in investment level, business size, production and business capacity of enterprises, investment policies of enterprises.
When analyzing the asset situation of enterprises, use two groups of indicators:
+ Indicators reflecting the size and volatility of assets include: Value of total assets and each asset class on the balance sheet, the main asset targets to pay attention to including money and cash equivalents, accounts to be collected, inventory, fixed assets.
Use the method of comparing total assets as well as each type of assets in the middle of the period with the beginning of both absolute and relative numbers The fluctuation of total assets represents fluctuations in the investment size of enterprises, production and business capacity, financial capacity of enterprises The volatility of each asset class both shows the level of investment of the enterprise in each field of operation, each asset type, and shows the effect of fluctuations in each asset class on business activities, financial situation of the enterprise, This will see the investment policy of the business.
+ The targets reflecting the asset structure of enterprises are the proportion of each asset class, defined by formula:
The proportion of each asset (%)= Total asset Eachasset ×100 %
Use a comparison method to assess the proportion of each asset class at the time the beginning and the end of the period Through the asset structure defined at the beginning of the period, at the end of the period, the investment policy of the enterprise will be evaluated, through the fluctuation in asset structure, the change in the investment policy of the enterprise will be seen the nature of business lines, the level of management of asset use of enterprises, the stage of development of the enterprise Enterprises operating in the field of trade and services often have a lower proportion of long-term assets than short-term assets due to less investment in fixed assets Businesses operating in the manufacturing sector are the opposite In various manufacturing enterprises, the proportion of long-term assets, short-term assets are also differently high and low due to the characteristics of the production technology process. b, Analysis of capitak sources situation
The capital of the enterprise is an indispensable condition for a business to establish and conduct business activities To meet the needs of business activities, businesses can mobilize from a variety of sources such as equity and loans.
The capital situation of the enterprise is shown by the size, structure and fluctuation of capital sources Analyzing the capital situation of the enterprise to assess which sources the enterprise mobilizes capital from, whether the mobilization of such capital meets the capital demand for the production and business process, the size of the mobilized capital has increased or decreased the fluctuation of the structure of mobilized capital, thereby assessing the level of risk when using such policy, the enterprise is independent or financially dependent on the outside In addition, analyzing the capital situation also helps to show the opportunities and challenges of enterprises in capital mobilization policies, thereby making forecasts about the financial risks that businesses can face, as well as solutions that need to be adjusted.
To assess the capital situation of enterprises, use two groups of targets:
+ Indicators reflecting the size and fluctuation of capital sources include:
The value of the total capital target and each type of capital source on the balance sheet.
+The indicators reflecting the capital structure of the enterprise are the proportion of each type of capital source, determined according to the formula:
Percentage of each capital sources= Eachtype of capital source
Use a comparison method to analyze the capital situation of the business.
Compare the total capital as well as each type of capital source between the end of the period and the beginning of the period, determine the absolute and relative difference, thereby seeing the fluctuation in the size of the capital of the enterprise At the same time, comparing the proportion of each type of capital source between the end of the period and the beginning of the period to reflect the change in capital structure as well as the level of financial independence of enterprises The fluctuation of capital targets depends on the capital mobilization policy of the enterprise such as financial structure objectives, capital use costs, funding needs, the ability to mobilize for each source of capital In addition, this volatility depends on the results of business activities, profit distribution policies. c, Analysis of the balance relationship between assets and capital sources
The balanced relationship between assets and capital sources represents the correlation of asset value and capital sources of enterprises in production and business activities, expressing between the capital the enterprise mobilizes and their use in investment, procurement and use is reasonable or not.
The balanced relationship between assets and capital sources of enterprises is assessed through the following criteria:
Net working capital is a long-term source of capital to finance working assets to ensure the business activities of enterprises take place regularly and continuously.
NWC = Long-term capital – Long-term asset Or: NWC = Short-term asset – Short-term debt
In which: Long-term capital = Owner’s equity + Long-term debt
This indicator shows how the business finances working capital, assessing the level of safety or financial risk in the operation of the business.
However, businesses need to apply the funding model flexibly and in accordance with the actual situation of the business In order to develop the right and timely funding policy, businesses need to pay attention to business characteristics and other impact factors such as the business environment, the goals of the business
1.2.2 Anaysis of cash flow and liquidity and solvency of enterprises a, Analysis of cash flow situation
The flow of money reflects the economic relationship of enterprises with the relevant party through the means of transaction, actual exchange in money Therefore, analyzing the flow of money of enterprises will assess the health of enterprises as well as the economic relationships of enterprises with other subjects in the economy.
The cash flow situation of the enterprise is countered to the saving criteria net money transfer during the period and the norms of money source development and use of money.
First, net cash flow targets include:
Cash flow from business activities: cash flow mainly from regular production and business activities of enterprises.
- Cash flow from investment activities: cash flow in and out of procurement investment activities, forming long-term assets of enterprises and financial investments are not classified as money and cash equivalents.
- Cash flow from financial activities: cash flow in and out of capital mobilization decisions of enterprises such as decisions on loans, tea debts, issuance of capital mobilization shares, capital raising, share re-purchase, distribution of profits.
To analyze cash flow, use a comparison method in combination with reality at the enterprise Compare the analysis period with the original period to assess the trend of movement of money flow, find out what causes the cash flow of the business to be positive or negative, up or down.
-Net cash flow in the positive period means that the total cash flow collected is greater than the total cash flow spent, capital equal to the money of the enterprise increases.
If net cash flow from positive business activities, business activities create an increase in cash for enterprises, maintaining the operation of enterprises.
ANALYSIS OF FINANCIAL SITUATION OF AGC LIMITED COMPANY
Introduction to AGC Limited Company
2.1.1 The process of formation an development of the enterprises.
AGC Co., Ltd is a founding company with two or more members, established under the decision No 0102023427 dated
December 8, 2005 of the Department of Planning and Investment of
Vietnamese name: AGC Limited Company
Head officw : No 5 lane 165 Thai Ha Street, Lang Ha Ward, Dong
Da District, Hanoi Director : Mr Hoang Thanh Hai
At the bank : Vietnam Technological and Commercial Joint Stock
Bank –DongDo Vietnam Technological and Commercial Joint Stock Bank – Big C
Vietnam Technological and Commercial Joint Stock Bank –Hai Ba Trung
Since its establishment until now, AGC Co., Ltd has produced and supplied timber as well as installed fire protection systems for large projects, constructed many construction works, highly appreciated by customers.
Main production department Sub-production department
During its operation, the company continuously improved its management in order to bring perfect quality and service to customers.
With 17 years of experience (since December 8, 2005), the company's products are widely used,…
- Producing plywood, veneer, plywood and thin board
- Build houses to live in
- Installation of other construction systems (Construction and installation of fire prevention and fighting systems, Installation of systems in houses and other construction works )
- Wholesale of other household appliances
- Installation of electrical system, water supply system and other construction installation
- Number of officers and employees: 100 employees
2.1.2 Characteristics of the company’s business
Diagram 2.1 Organization of the production apparatus
Source: Human Resources Administration Department - Ha Mai
Construction Investment and Services Joint Stock Company
Main production department: As the direct part for the production of the main product, the main production department includes:
-Mechanical workshop: Producing metal and galvanized products for processing goods according to customer's orders.
-Concrete workshop: Pour concrete columns for the company's works according to customer's orders.
-Construction and installation team: Directly involved in the construction and installation of works, construction teams in charge of works in their management desks, coordinate with other teams to build together on network and telecommunication installation.
-Sub-production department: Is the production department produced for supplying and distributing the transportation of goods, internal transport and external transport The production department includes: Warehouse and transport department.
Basic construction is an important industrial material production industry to reproduce fixed assets for all sectors in the national economy, creating technical facilities for society Construction products are large-scale works, architectural objects, complex structures, single-unit, prolonged production time Therefore, in order to get a completed construction project, hand over to the investor, the following work steps must be undergone:
First of all, when there is a bidding project, the staff of the technical and construction management department will consider the design as well as technical requirements to set the estimated value according to each work, the project item, thereby making bids After making bids, the company sends them to the customer units to participate in the bidding if winning the
Construction of raw parts Surface construction and finishing
Foundation construction Clearance bid will organize the construction of the project.
In terms of production technology, the Company uses a mixed construction method that is both manual and combined by machine It is possible to generalize the company's production technology process as follows:
2.1.3 Organizational structure of the enterprises
Diagram 2.3 Organizational apparatus of Ha Mai Construction
Services and Investment Joint Stock Company
Source: Human Resources Administration Department - Ha Mai
Construction Investment and Services Joint Stock Company
Director: Having a general management function, taking legal responsibility for all activities of the company under its permission, managing and using the seal in accordance with the purpose of the company's operations Supervise functional departments, orient operation plans, negotiations, transactions representing important procurements,
-Deputy Chief Financial Officer: (cum head of administrative department, supplies money): responsible for monitoring the import and export activities of supplies, organizing the human resources apparatus, monitoring the payment and sale activities Take legal responsibility for matters within its management, management and use of the seal for the right purpose,
-Deputy Director of Planning: monitoring and monitoring the construction progress of all works, coordinating with functional departments (mainly accounting departments and construction teams), compiling the list of product goods, aggregating the cost of the whole project, making recommendations to adjust production plans and bidding with fluctuations in price Management and use of the seal for the right purpose, taking legal responsibility for activities under his permission
The accounting department compiles data sent by other departments, makes relevant book documents, sets costs for calculating product costs, determines business results, makes balance sheets, financial statements, explains financial statements Make recommendations to reduce production costs, manage the company's cash fund, monitor accounts at banks,
Administrative Department of supplies: Monitor the situation of import and export of goods and supplies most fully and timely, reflect back to the head of the department to take measures to adjust the production plan.
Arrange the human resources apparatus, rotate employees between departments in accordance with production requirements
Bidding Planning Department: Develop development-oriented strategies for the company, make bids and bids Coordinate with the accounting department to make the list of bids, bids Propose to the director the solutions to submit the bidding packages.
Mechanical workshop: Producing metal, galvanized and processed products according to customer's orders.
Concrete workshop: Pour concrete columns to serve the company's works, according to customer orders.
Construction and installation team: Directly they build and install works, construction teams are in charge of works in their management area, coordinate with other teams to build together.
In the company, the departments always coordinate very closely and cohesively in activities, always trying to increase the operational support of other departments.
The staff in the enterprise is capable of operating many functions.
Therefore, when rotating work does not take training but can receive the first of the work However, due to the large workload, the staff of some departments such as accounting department, planning department is still thin, many employees have to work many fields.
2.2.1 Analysis of assets and capital sources a, Analysis of assets
II Short-term financial investment 10,100 10.0874 0 0 10,100 10.0874
2 Current advanced payments to suppliers
2 Provision for devaluation of inventories 0 0 0 0 0 0 0
VII Non-current property in process 0 0 0 0 0
VIII Other non- current assets 388 862,222 726 808,463 -338 -46.56 5.3759
Table 2.1 Assset situation of AGC Limited Company in the period of 2020-
(Source: Income statement of AG Limited Company 2020-2021)
At the end of 2021, the company's total assets is VND 100.57 million An increase of VND 30,167 million compared to 2020 is equivalent to an increase of 42.84% compared to 2020 This proves that the capital scale of enterprises is tending to increase and develop more This development depends mainly on Current assets.
Current Assets increased but Non-current assets decreased, but in terms of structure, Non-current assets do not account for much of total assets, so the decrease of Non-current assets are negligible For an enterprise operating in the field of construction bidding, it was reasonable to change the proportion structure by increasing Current asset at that time when the covid epidemic was exploding.
However, this structural shift needs to be analyzed deeply to clarify the cause.
Current assets remained larger than 98% and Non- current assets decreased by up to 49% from 1.27% to 0.44% compared to total assets Thus we see, the assets of the enterprise are maintained mainly by short-term assets With such a proportion structure, it is reasonable for an enterprise with the main field of construction and contracting.
Current assets at the end of 2021 are VND 100,125 million, an increase of 44.04% compared to 2020 The ratio of current assets to total assets is an increase of 0.82% compared to 2020.
General assessment of the financial situation of AGC Limited Company
In the period of 2020-2021, despite being heavily affected by the epidemic, in the management work, enterprises have tried and made contingency plans, so in general, the business situation of the enterprise is still stable and set got some results as follows:
Firstly , in general, the business results of enterprises are profitable despite the heavy impact of the epidemic and the country's economic situation is still facing many difficulties.
Secondly , the capital structure of the enterprise is consistent with the characteristics of the industry Enterprises should focus on current assets suitable for the distribution of small and medium- sized bidding packages and implement them in a short time to turn capital quickly and ensure high liquidity, especially during the pandemic.
Thirdly , the enterprise is tightening trade policy due to customers, reducing receivables This makes perfect sense when the company wants to be safe about debt collection and ensure the stability of the business This can be seen as an effort for businesses in difficult economic times.
In addition to the above achievements Enterprises have the following limitations:
Firstly , the enterprise has stocked quite a lot of raw materials in the condition that the prices of these input materials are volatile On the other hand, inventory is a illiquid asset class, which affects short-term solvency.
Secondly , enterprises are mobilizing a large amount of short-term loans to invest in current assets However, business performance was affected by the epidemic, the mobilization of too much capital with short term increased the interest expense of the enterprise and affected the solvency of the enterprise.
Thirdly , the business results decreased, profit after tax decreased.
Fourth , the cost management of enterprises is not effective.
Because in the past year, the enterprise's administrative expenses increased but the net revenue decreased Therefore, enterprises need to improve the efficiency of cost management.
Fifth , enterprises have not fully taken advantage of their market advantages what the demand for installation services has increased during the epidemic situation to increase their service provision revenue.
The business activities of AGC Limited Company are affected by many factors, including objective and subjective factors and causes from objective and subjective factors that have negative impacts.
Firstly , market difficulties due to the impact of the epidemic The outbreak of the disease in 2020 until 2021 not only affects AGC
Limited Company but also affects all businesses.
Secondly , enterprises face difficulties in organization, management and business activities.
Thirdly , the enterprise is still weak in cost management, and the calculation of raw material norms is not reasonable and not optimal.
In the complicated situation of the epidemic, the market has been significantly affected, but enterprises still able to achieve some of the above achievements is a commendable thing However, in order to cope with challenges in the coming time and improve competitiveness in the market, enterprises need to overcome weaknesses and backlogs in cost management and capital use.
SOME SOLUTIONS TO IMPROVE THE FINANCIAL
Enterprise’s growth strategy
According to the Central Institute for Economic Management
(CIEM), the conflict between Russia and Ukraine and the disruption of supply chains of many basic goods, the trend of alliance between superpowers will be the factors direct influence on the economy.
In 2023, to deal with inflationary pressure, the state will tighten currency in key economies.
Thus, in 2023, Vietnam's economy can achieve 6.47%, exports increase 7.21% and trade surplus reaches 5.64 billion USD At this time, inflation will be at 4.08%.
In a more positive direction, Vietnam's economy can reach
6.83%, exports increase 8.43% and trade surplus reaches 8.15 billion USD However, inflation will stay at 3.69%.
In general, in 2023, Vietnam will continue to grow with potential risks and challenges The reason why Vietnam is still growing is the domestic market with a size of up to 100 million people belonging to the largest market in the world, and at the same time, it has good penetration from the international market Moreover, Vietnam is a manufacturing economy, so the difficult economy is less affected than the service sector.
The complicated covid 19 epidemic has greatly affected all fields and the construction industry is no exception However, most of the management targets were met and exceeded the plan.
The construction work was focused on implementation and achieved outstanding results Planning-architecture and urban development management activities continue to be focused and effectively implemented The Ministry of Construction has coordinated with ministries, branches and localities to closely monitor and control market developments
In 2021, the added value of the Construction industry is estimated to increase by 0.2 - 0.5% compared to 2020; construction price index increased by 4.34% compared to 2020; The average housing area nationwide is estimated at 25m2/person In the field of urban development and urban infrastructure, many important results have been achieved: the national urbanization rate in 2021 is estimated at 40.5%; the percentage of population in urban areas supplied with clean water through the centralized water supply system is estimated at 92% (increasing 2% compared to 2020); the rate of loss and loss of clean water decreased to 17.2% (down 0.8% compared to 2020) In the field of building materials production, in
2021, cement consumption is estimated at 105.6 million tons (up
2% compared to 2020); construction glass reached about 186 million m2 (an increase of about 24%); sanitary ware about 16 million products, (up about 7%)…
3.1.1.2 Government development plans for infrastructure
In 2022, the Construction industry strives to achieve an estimated growth rate of construction production value of 4.96 - 5.56%; the average housing area of the whole country strives to reach 25.5 m2/ person; the national urbanization rate reaches 41.5-42% (the target assigned by the National Assembly in Resolution No.
32/2021/QH15); the percentage of urban people supplied with clean water through the centralized water supply system is over 94%; the rate of loss and loss of clean water decreased below 16.5%; the proportion of total wastewater collected and treated is 16%.
To accomplish that goal, the industry will focus on implementing three breakthroughs: Completing legal institutions on construction to strengthen state management while creating a favorable, open, and strongly decentralized environment for local; focus on urban development planning and management; promote the management of housing development and real estate market.
On that basis, the enterprise has built for itself a business development strategy as well as the company's specific goals and orientations in the coming years as follows:
Firstly , in the coming year, the enterprise will promote effective business activities, increase revenue and profit, and meet planned targets Expanding the consumption market, building a brand image, enhancing the company's competitive position
Secondly , the enterprise builds a reasonable capital structure, strengthens governance as well as improves the efficiency of business capital, reduces costs and avoids waste The enterprise’s management board has set development-oriented goals for the company to strive for, achieving higher revenue growth and profit.
The enterprise expects that in 2021, the total target revenue will increase by 20-25% To do that, enterprises need to perform well the capital management in the enterprise and develop specific plans so that by 2021 the enterprise will carry out its business activities proactively and effectively most fruitful.
Thirdly , the enterprise continues and maintains debt recovery management, promotes debt management and recovery, minimizes the amount of capital that is appropriated, and adds capital to make production and business activities go well .
Fourth , the enterprise needs to build on corporate culture and people in the business We see, the human factor is the core of the business If an enterprise has a team of highly qualified employees, good moral character, long-term commitment, then the enterprise will have a foundation, together to build a stable company so that it will not stop company expansion and development Since then, the enterprise has strengthened training and promoted the training policy among employees.
Fifth , the enterprise promotes marketing, continues to maintain cooperative relationships with copper customers and a number of credit institutions and banks in order to ensure adequate supply of input materials and increase sales strengthen business activities, enhance the ability to raise capital.
Solutions to improve the financial situation of the enterprise
3.2.1 Imrove the liquidity of current assets
*Regarding improving the liquidity of receivables:
It is necessary to develop a debt collection and management process, to classify customers and apply payment discounts as well as different repayment periods There is no need to be too rigid and mechanical in collecting receivables.
Perform detailed monitoring of receivables, classify debts in detail according to debt size and debt duration Regularly update payment status and compare debts with customers, urge recovery for debt entangled, prolonged.
Connecting debt collection responsibilities to sales staff and debt accountants.
Actively build a selective purchase plan right from the moment of purchase, to find the source of goods to make the production most convenient, to meet the requirements of quality, quantity and reasonable price.
Organize and manage the production and business process smoothly and smoothly, minimizing idle time of machinery and equipment, such as downtime due to production errors When this process is implemented synchronously, it will help businesses make the most of the capacity of the machines, improve labor productivity, reduce production costs, thereby leading to increased profits To achieve this, the technical material supply department and the factory workshops must effectively coordinate production planning, repair plans and timely changes in production output due to changes in production market volatility.
To increase revenue, the enterprise can take the following measures: Try to exploit the market more, promote the search for customers, apply incentives such as discounts for medium and large-scale projects Perform well after-sales services with customers to strengthen long-term relationships with the enterprise.
Implement a flexible policy for each individual customer, especially potential customers to create a good first impression.
3.2.3 Improve the efficiency of using fixed capital
Reducing the proportion of equity not used in production and business makes the existing equity fully effective: Adjusting the equity among member units to serve business more effectively.
Actively sell off all unused fixed assets to recover capital Actively liquidate damaged and obsolete fixed assets that cannot be sold or are unable to recover For temporarily unused fixed assets, they should be leased, pledged or mortgaged to mobilize capital for investment in other fields.
3.2.4 Improve the efficiency of working capital
In order to fully mobilize capital in a timely and proactive manner, enterprises need to take the following measures:
Develop a capital mobilization strategy suitable to the market situation and business environment of each period In order to have a clear strategy and create credibility, it is first necessary to have a clear business plan, presented briefly, concisely, covering many different areas and providing all possible details satisfy all investor questions about the ability to accomplish the set objectives.
Create trust for capital providers by improving the reputation of the enterprise, stabilizing and rationalizing financial indicators, paying debts on time
The management of cash and cash equivalents should be calculated and properly reserve cash fund Therefore, the enterprise need:
- Make a budget forecast and forecast receivables and expenses in a scientific way so that you can be proactive in the payment process during the period.
- Determine the minimum cash balance, apply the Miller - Orr model to cash management Thereby, the enterprise can rely on to make short- term financing decisions when they need cash and invest to earn interest when they have excess cash.
- Set up a reasonable capital reserve level in cash, while ensuring the necessary cash solvency in the period to maintain its reputation and ensuring the profitability of the idle cash capital.
Capital structures are considered reasonable when they are suitable with the characteristics of production and business activities and achieve the goal of minimizing the cost of capital.
Improve the management, streamline and organize the lean apparatus, improve the operating capacity of managers through standardization of responsibilities and tasks.
Develop training plans and improve professional qualifications and management skills for a contingent of young officers, employees - employees with a sense of responsibility for their work, sensitive to the market situation, and dynamic in their work. business, know how to harmoniously combine the requirements of school training and practice in business activities, promptly add qualified staff to meet the requirements of innovation in business methods of enterprises.
Improve the capacity, qualifications and skills of the enterprise's officers and workers
- Paying attention to training and fostering skills, professional qualifications, professionalism, discipline, community responsibility at work, performing assigned tasks for the collective of officials, workers and employees.
- Exchange management experience with other units in the same industry, contributing to improving the efficiency of business and financial management of the company.
- Develop a suitable salary and reward regime for employees and departments, and have timely material incentives for officials and units when negotiating a new and quality product supply good with reasonable prices or when receiving new, large contracts with important partners, individuals and units with innovative and effective solutions, initiatives and achievements in saving labor The appropriate reward mechanism contributes to promoting efficiency and promoting the working spirit of employees, thereby helping to accelerate the process of production, sales and supply of products to customers of the company.
- Improve the quality of human resources in the accounting and finance departments, and strengthen the training of staff with specialized knowledge, especially financial knowledge.
Solvency is the ability of the business to pay its due debts This is considered an important criterion reflecting the financial position and business capacity, helping to evaluate the financial performance as well as clearly see the financial risks of the enterprise This is the indicator that investors and lenders use to assess the company's ability to pay short-term and long-term debts Therefore, businesses need a reasonable management mechanism.
Secure a certain amount of cash to pay off near-due loans Even undue debts also need to prevent risks from creditors who need to pay quickly, businesses also need to reserve cash for payment.
Stock up on liquid securities that can be quickly converted into cash when short-term debt needs to be paid off.
Conditions for implementation of solution
In the context of opening up and integrating with the world and the region, Vietnam's construction industry has been facing many challenges In parallel with many challenges, the construction industry is currently supported by favorable socio-economic conditions such as: the macro economy is gradually recovering, gradually developing stably; the Government's policies on urban construction and economic development are being promoted; infrastructure is focused on investment; along with that is a young and abundant human resource, creating a solid foundation for the development of the industry In addition, in order to have financial resources for sustainable development, the state needs to synchronously implement the following solutions:
Firstly , to promote development programs for Vietnam's construction industry, planning for development of supporting industries, and projects to produce supporting industry products.
Secondly , create conditions for small and medium-sized enterprises operating in the industrial sector.
Thirdly , create conditions for businesses to have the opportunity to access modern technology, equipment and production lines In addition, enterprises need to constantly foster and improve their professional and professional qualifications for staff implementing strategy formulation and information disclosure to have good human resources And to meet the requirements Basic requirements for specialized knowledge blocks such as:
- Have qualifications in accounting, auditing, finance, tax
- Deep understanding of Vietnamese law, international and regional practices
- Fluent in foreign languages and good computer use
- Regularly update knowledge about securities, accounting and tax
- Understanding the market as well as construction industry trends at home and abroad
- Prepare enough facilities and equipment to work and learn to improve skills.
Chapter 2 analyzed the current financial situation of the company in 2020-2021, from which it pointed out the achieved results and the real problems that the company is currently facing And in order for the analysis to be applied in practice, in chapter 3, the author presented some solutions to improve the efficiency of the financial situation at AGC Co., Ltd The introduction of these solutions partly helps the Company to have the basis to improve the efficiency of capital use in particular and business efficiency in general And it is important when building or implementing any solution of the
Company, the basic thing is to calculate the balance so that the costs are consistent with financial conditions to bring high efficiency.
In economic and financial management and administration, in order to make the right decisions and to organize the implementation of decisions in a scientific way, it is necessary to have a correct and complete awareness of economic phenomena and processes, financial has been, is and will take place in the unit, the impacts from the environment on the operation of the unit.
Financial analysis of enterprises is a tool to perceive the phenomena, processes and results of economic and financial activities of enterprises in order to provide information for management subjects with necessary grounds for operating and economic and financial management of the unit Understanding the financial situation of the company under management will help managers make decisions and directions to help develop and expand the business scale.
And especially in today's market economy, when businesses compete more and more fiercely, improving the efficiency of their financial situation and making the most of their own internal resources is always one of the most important things important issues that require regular attention from management subjects.
Through the process of researching and analyzing the financial situation at AGC Co., Ltd., the thesis has completed the following basic contents:
- Systematize the basic theories of analyzing the financial situation in enterprises.
- Evaluate and analyze the current status and effectiveness of the financial situation of AGC Co., Ltd From there, evaluate the results achieved, the limitations still exist and specify the causes.
- Based on the analysis, propose financial as well as non-financial solutions to improve the efficiency of the financial situation.
Due to limited knowledge, the thesis cannot avoid shortcomings I sincerely thank you, I look forward to receiving your comments to improve the topic.
1 Prof Dr Ngo The Chi (Editor in Chief), Prof Dr Nguyen Trong
Co (2020), "Textbook of Corporate Finance Analysis", Tai Chinh
2 Prof Dr Nguyen Trong Co (2020), "Textbook of Theory of
Financial Analysis", Tai Chinh Publishing House
3 Assoc Prof Dr Nguyen Trong Co, Assoc Prof Dr Nghiem Thi
Tha, "Textbook of Reading and Analysis of Corporate Financial
Statements", Ta Chinh Publishing House.
4 AGC Limited Company financial statements in 2018, 2019 and
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