Financial Analysis Of Company Vinamilk.pdf

Analyze the structure and volatility of assets Looking at the chart, it can be seen that the company's total assets tend to increase gradually over the years, but in 2022 the company's

UNIVERSITY OF ECONOMICS AND FINANCE

Subject: Corporate Finance

Topic: FINANCIAL ANALYSIS OF COMPANY VINAMILK

Members:

No Full Name Student’s ID Contribution

2 Đau Thi Bich Ngoc 215024814 100%

Lecturer: Tang My Sang

HCM City, 05/04/2023

Table of Contents

I INTRODUCTION 3

1 Overview of business 3

2 Business organization chart 3

II ANALYSIS 4

1 Financial Analysic Method 4

1.1 Balance Sheet 4

1.1.1 Analyze the structure and volatility of assets 4

1.1.2 Analyze the structure and volatility of equity 8

1.2 Income statement: 11

2 Financial ratios analysis 14

2.1 Liquidity ratios 15

2.2 Leverage ratios 15

2.3 Coverage ratios 16

2.4 Activities ratios 16

2.5 Profiability ratios 17

3 Dupont analysis 18

III CONCLUSION 19

I INTRODUCTION

1 Overview of business

Vietnam Dairy Products Joint Stock Company, another name: Vinamilk, stock code HOSE: VNM, is the leading nutrition corporation in Vietnam today, owning a system of 17 factories, 15 domestic and foreign farms Vinamilk has a rich product portfolio, with more than 250 types of products in diverse categories such as liquid milk, yogurt, powdered milk and nutritional powder, condensed milk, ice cream, cheese, nut milk, beverage, line Organic products… meet all the nutritional needs of Vietnamese consumers

In addition to affirming its brand position in the domestic market, Vinamilk also has many strategic steps to build a foothold for the Vietnamese dairy brand in the world market through trade promotion and integration activities actively promoting exports in many countries such as China, Korea, Japan, the United States Vinamilk is also the first dairy company in Vietnam licensed to export milk to the countries of the Asian Economic Union Europe (EAEU) Currently, Vinamilk is the only representative of Vietnam and Southeast Asia in the Top 40 largest dairy companies globally in terms of revenue (according to Plimsoll, UK), with products exported to 57 countries and territories , with a total cumulative export turnover of more than

$2.6 billion

Vinamilk's brand value reached US$2.814 billion, making it the most valuable food brand in Vietnam and the sixth largest dairy brand in the world, as announced by Brand Finance - a brand valuation company world leading reputation Not only worth billions of dollars, with its prestige and quality confirmed, Vinamilk is the milk brand chosen by Vietnamese consumers the most for the past 10 years in a row according to Worldpanel's "Brand Footprint" report belonging to Kantar

In 2022, Vinamilk will continue to promote investment and development projects such as a farm complex in Laos, Milk Paradise in Moc Chau, building a dairy factory in Hung Yen In parallel with developing existing international markets, Vinamilk also cooperates with major partners such as Sojitz Corporation of Japan, Del Monte Philippines in joint ventures in the food industry to continue promoting the company's growth general and brands in particular

2 Business organization chart

II ANALYSIS

1 Financial Analysic Method

1.1 Balance Sheet

1.1.1 Analyze the structure and volatility of assets

Looking at the chart, it can be seen that the company's total assets tend to increase gradually over the years, but in 2022 the company's total assets decreased markedly, decreasing

by about 9.09% compared to 2021 Short-term assets increased from 24,721,565 billion to 36,109,911 billion from 2019 to 2021, but by 2022, it will decrease by about 12.6% compared to

2021 to only 31,560,382 billion In addition, long-term assets are contrasted to current assets and total assets; Specifically, long-term assets decreased steadily over the years, decreasing from 19,978,308 billion to 16,922,282 billion from 2019 to 2022

Regarding current assets: In the asset structure of the company, current assets account for the main proportion and the average 4-year account for about 62.6% of total assets The share

of investments in inventory, short-term financial investments and short-term receivables is quite high

B ảng: The proportion of current assets in total assets

+Other Current Assets 48,32% -5,36% 10,45% 0,43% 0,26% 0,31% 0,30%

Cash and cash equivalents: In 2019 to 2022, there is a downward trend, specifically in

2019 accounting for 5.96% of total assets equivalent to 2,665,195 billion, but in 2020, cash and cash equivalents will decrease by about 20.78% compared to 2019; by 2022, the proportion of cash and cash equivalents will only account for 4.74% of 65.1% of short-term assets, equivalent

to 2,299,944 billion, down 2.07% compared to 2021 Such a reduction in cash shows that the company is facing inflation as well as other factors such as the Covid-19 epidemic, avoiding holding too much cash to lose opportunity costs, so the company has used cash to invest in short-term financial investments thus making financial investments from 2019 by 2021, it will increase, specifically increasing from 12,435,744 billion to 21,025,736 billion and accounting for 39.42% of total assets However, in 2022, the financial investment item decreased to 17,414,055 billion, down equivalent to 17.18% compared to 2021, but in general, the company's short-term financial investment is still on the rise and accounts for the highest proportion of short-term assets On the other hand, reducing such an amount of cash will reduce the company's liquidity,

so the company needs to consider how much money to keep appropriately

Short-term Account Receivables: Short-term account receivables have steadily increased over the years and increasingly account for a larger proportion of total short-term assets; Specifically, it increased from 4,503,155 billion in 2019 to 6,100,403 billion in 2022 and accounted for about 12.58% of total assets In addition, the year-over-year increase in receivables indicates that the company has loosened credit, adopted a sell-to-bear policy, thereby increasing its long-standing business relationship with buyers However, if customers owe too much, the company may be exposed to certain risks Unrecovered capital will reduce opportunity costs, the company will not be able to use that capital to reinvest in the most effective way and will be forced to mobilize other capital sources to compensate for production and business activities

Inventories: In 2019 to 202, the number of inventories increased steadily over the years, specifically increasing from 4,983,044 billion to 6,773,072 billion, equivalent to increasing the proportion from 11.15% to 12.7% compared to total assets Because of the increasing demand for milk of the people and the reputation of the company, many customers put their trust in the choice of Vinamilk-branded milk Therefore, the company increasingly has to stock an inventory

of milk, food to be able to timely meet the consumer demand of the market However, in 2022,

the number of inventories has decreased to 5,537,563 billion, equivalent to a decrease of 18.24% compared to 2021, accounting for 11.42% of total assets The reason is that the cost of raw materials increases due to the influence of monetary policies, domestic price adjustment policies and other direct and indirect impacts on the economy, so production costs will increase accordingly Along with that price increase, customer demand will tend to decrease so the company has reduced the amount of inventory to match the demand of the market

Regarding long-term assets: In the asset structure of the company, long-term assets account for less proportion than current assets and the average 4-year account for about 37.4% of total assets The proportion of investment in fixed assets, long-term incomplete assets and other long-term assets are quite high, but most tend to decrease year by year

+Long-term incomplete assets 1.805.130 1.130.024 1.062.634 943.846

+Long term Finacial Investments 742.670 743.862 973.441 986.676

B ảng: The proportion of Long-term assets in total assets

Long-term Assets -1,74% -8,23% -6,06% 34,90% 32,29% 38,75% 44,69% +Long term Account

+Real Estate investment -4,09% 0,09% -3,26% 0,12% 0,11% 0,12% 0,14% +Long-term incomplete assets 59,74% 6,34% 12,59% 3,72% 2,12% 2,19% 2,11% +Long term Finacial

+Other long term assets -7,41% -8,28% -8,93% 4,90% 4,81% 5,77% 6,87%

Fixed assets: in the long-term asset category, it can be seen that the fixed assets of the company account for the largest proportion, but tend to decrease over the years from 14,893,540 billion in 2019 to 11,903,208 billion in 2022; accounting for 24.55% of total assets in 2022, equivalent to a decrease of 6.32% compared to 2021 The decrease in fixed assets can be attributed to annual depreciation from machinery and equipment, vehicles, office equipment, livestock, houses and architectural objects; It is possible that in recent years, the Company has focused on investing in deploying tangible fixed assets and intangible fixed assets that have not been completed or installed, so currently the fixed assets of the Company cannot recover as in previous years

Real Estate Investment: The decrease in Real Estate Investment may be due to depreciation from land use rights with a definite term, infrastructure, houses annually; In 2022, it

is 57,594 billion, equivalent to a decrease of 4.09% compared to 60,050 billion in 2021

Long-term incomplete assets: In 2019, it increased from 943,846 billion to 1,805,130 billion in 2022 and increased by about 59.74% compared to 2021 This shows that the company has invested in more production and business facilities; the costs of building or deploying tangible fixed assets and intangible fixed assets that have not been completed or installed

1.1.2 Analyze the structure and volatility of equity

Looking at the chart, it can be seen that the total capital of the company tends to increase gradually over the years, but in 2022 the total capital of the company decreased markedly, decreasing by about 9.09% compared to 2021 Equity capital increased from 29,731,255 billion to 35,850,114 billion from 2019 to 2021, but by 2022, it will decrease by about 8.46% compared to 2021 to only 32,816,518 billion In addition, liabilities are similar to equity; Specifically, liabilities increased steadily over the years, from 14,968,618 billion to 53,332,403 billion from 2019 to 2021; and by 2022, it will decrease by about 10.39% compared to 2022, equivalent to 15,666,146 billion

Regarding liabilities: In the capital structure of the company, liabilities account for not

as much as equity and the average 4-year ratio accounts for about 32.3% of the total capital

-Tax and other payable to State Budget 598,135 648,147 659,55 619,394

-Loans and Long term Liabilities 66,029 75,636 167,422 122,993

B ảng: The proportion of liabilities in total equity

-Short term Liabilities -10,31% 20,09% -1,59% 31,58% 32,00% 29,35% 32,31%

-Short term Loan and

in 2021 and accounted for 17.59% of liabilities It is also possible that the economic situation of the company as well as the economy of the world is affected by the Covid-19 epidemic along with other factors that make the company's borrowing trend increase; But in 2022, the economy has gradually recovered, and the short term loan and liabilities have decreased from 9,382,354 billion to 4,867,130 billion in 2022, equivalent to a decrease of about 48.12% compared to 2021 Long-term debt also tends to decrease over the years, from 525,766 billion in 2019 to 357,723 billion in 2022, equivalent to accounting for about 0.74% of total liabilities in 2022

Regarding equity: In the capital structure of the company, equity accounts for the main proportion and on average 4 years accounts for about 67.7% of the total capital

B ảng: The proportion of Owners equity in total equity

Cost of goods sold 36.059.016 34.640.863 31.967.663 29.745.906

B ảng: The proportion of Net Sales, COGS and Gross profit

In contrast, gross profit tends to decrease from 26,572,217 billion in 2019, equivalent to 47.18% to 23,897,232 billion in 2022, equivalent to 39.86% in the proportion of net revenue; down about 9.06% compared to 2021

General and admin expenses 1.595.846 1.567.312 1.958.155 1.396.302

Financial expenses including interest expenses tend to increase from 108,825 billion in

2019 to 166,039 billion in 2022 Showing that the interest expense the company incurred when using external loans in 2022 to expand production and business activities is increasing Therefore, the company needs to have appropriate financial policies to reduce the cost of external loans and more effectively use loans in production and business activities

A slower decrease in selling expenses greater than a decrease in revenue indicates an inappropriate use of selling expenses; Therefore, the company should adjust the sales policy to

be more reasonable

In general, the operating costs of the company are increasing, to generate a co-revenue the company costs more sales costs, financial costs Thus, the company needs to review its agency policies and sales commission policies so that the growth rate of selling costs is in line with the growth rate of net revenue

B ảng: Profit before and after tax

B ảng: The proportion of profit before and after tax

Pretax Profit -18,78% -4,41% 5,65% 17,51% 21,21% 22,67% 22,72% Corporate Income

Net Profit After Tax -19,33% -5,37% 6,46% 14,31% 17,45% 18,84% 18,74%

Profit before tax tends to increase from 12,795,710 billion in 2019 to 13,518,536 billion

in 2020 equivalent to 5.65% However, from 2021 to 2022, pre-tax profit tends to decrease to 12,922,235 billion in 2021 and only 10,495,535 billion, equivalent to a proportion of 17.51% compared to the proportion of net revenue in 2022 It may be because the company is not entitled

to the payment discount because it did not pay the supplier early because the company needs to use the capital to serve its business

The increase or decrease of profit after tax is directly proportional to pre-tax profit in

2022, profit after tax accounts for 14.31% of net revenue and tends to decrease year by year, showing that with 100 in revenue, the company earns 14.31dongs

In addition, when low after-tax profit indicates little profit in the last 2 years, investors do not receive high dividends Therefore, business managers must learn and come up with plans to improve business results

2 Financial ratios analysis