This indicates strong revenue growth for the company.Net sales as a percentage of sales remained relatively stable over the three years.Cost of goods sold as a percentage of net sales sh
Introduction
An Cuong Joint Stock Company is a manufacturer and supplier of industrial wood materials, solutions, and furniture in Vietnam and the region since 1994 It is currently a furniture manufacturer and exporter of many well-known brands in Japan, Southeast Asia, the United States, and Europe The major foreign shareholders of An Cuong are Sumitomo from Japan, DEG from Germany, and Vinacapital.
In 2017, An Cuong was pleased to welcome Sumitomo Forestry Group as a strategic shareholder With over 200 years of experience in the industry, annual revenue of over 10 billion USD, modern management techniques, and a strong position in the international market, Sumitomo Forestry Group joined forces with An Cuong, which has been operating for more than 25 years and has a strong position in the domestic market.
Cuong offers an extensive range of industrial wood materials, including MFC boards, MDF boards, laminate, acrylic, veneer, flooring, and various accessories These versatile materials play a significant role in the design and decoration of contemporary interiors, transforming spaces in residential, commercial, educational, and healthcare settings Their applications extend to furniture showrooms, ceilings, toilet partitions, doors, and flooring, providing endless possibilities for modern and functional design solutions.
In 2019, An Cuong continued to invest in the construction of a factory with an area of over 100,000 square meters, equipped with modern machinery and equipment worth billions of Vietnamese dong They also expanded their existing factory to over 240,000 square meters An Cuong collaborates with renowned accessory brands such as Hettich (one of the leading manufacturers of furniture accessories from the Federal Republic of Germany), Imundex (part of the Feddersen Group), and EcoBuilding (by Schneider Electric).
In terms of competitors, An Cuong Joint Stock Company competes with other reputable construction companies and building material suppliers in Vietnam, such as Viglacera, LIXIL Vietnam, and Dong Tam Group These companies also provide a range of construction materials and compete to gain market share in the industry
Financial statement analysis
Perform Common-size analysis for Balance sheet and
Common-size income statement 3 years of ACG ( An Cuong Company ).
Sales increased significantly from 2020 to 2021 and experienced a further increase in 2022 This indicates strong revenue growth for the company.
Net sales as a percentage of sales remained relatively stable over the three years.
Cost of goods sold as a percentage of net sales showed a slight decrease from 2020 to 2022, indicating better cost control and improved efficiency in production.
Gross profit margin remained relatively stable, with a slight increase in 2022.
As a percentage of net sales, financial income increased significantly from 2020 to 2021 but decreased in 2022.
As a percentage of net sales, financial expense increased over the three years, with a notable jump in 2022 This indicates an increase in the company's financial costs.
Gain/loss from joint ventures appeared in 2022, contributing positively to the net income.
Selling expenses as a percentage of net sales showed minor fluctuations over the years.
Administration expenses as a percentage of net sales increased from
2020 to 2022, indicating higher administrative costs.
The operating profit margin increased from 2020 to 2021 but remained relatively stable in 2022.
Other income and other expense percentages varied but remained relatively low compared to net sales.
Earnings before interest and tax (EBIT) margin increased from 2020 to
2021 and experienced a slight increase in 2022.
Corporate income tax percentages increased over the three years, indicating a higher tax burden for the company.
Net income after taxes as a percentage of net sales showed a slight decrease from 2020 to 2021 but increased in 2022.
Overall, the common-size analysis of the income statement for ACG Company suggests positive trends in terms of revenue growth, stable gross profit margin, and increasing operating profit margin However, there are some areas of concern, such as the increasing financial expenses and administrative expenses as a percentage of net sales It's important for the company to monitor and control these costs to ensure profitability.
It would also be beneficial to compare these trends with industry benchmarks and analyze the company's performance in relation to its competitors to gain a better understanding of its position in the market.
Common-size Balance sheet ACG Company
The common-size balance sheet reveals ACG Company's financial structure and identifies changes in asset and liability composition By comparing values to total assets, this analysis highlights the proportion of current and non-current assets, as well as the distribution of liabilities between short-term and long-term obligations It provides valuable insights into the firm's financial health, risk profile, and liquidity position, allowing for informed decision-making and performance evaluations.
Current assets as a percentage of total assets decreased from 80.58% in 2020 to 73.27% in 2021 and further declined to 70.23% in
2022 This suggests a decrease in the company's reliance on short-term assets.
Cash and marketable securities showed a significant increase as a percentage of total assets, indicating a higher liquidity position in 2022.
Short-term investment as a percentage of total assets decreased from 37.73% in 2020 to 30.66% in 2021 and further declined to 19.19% in 2022.
Account receivable (current) as a percentage of total assets decreased from 15.48% in 2020 to 12.41% in 2021 but increased to 16.24% in 2022.
Inventory as a percentage of total assets remained relatively stable over the years, with a slight increase in 2022.
Goodwill and other assets as a percentage of total assets showed fluctuations but remained relatively small in comparison.
Long-term assets as a percentage of total assets increased from 19.42% in 2020 to 26.73% in 2021 and further rose to 29.77% in 2022.
Fixed assets as a percentage of total assets showed a decreasing trend over the years.
Long-term investments showed a significant increase as a percentage of total assets in 2022.
Current liabilities as a percentage of total liabilities remained relatively stable over the years, indicating a consistent short-term debt position.
Non-current liabilities as a percentage of total liabilities also remained relatively stable over the years.
Common stock as a percentage of total equity remained relatively stable over the years.
Development and investment funds as a percentage of total equity showed a decreasing trend, indicating a potential decrease in investment activities.
Surplus equity as a percentage of total equity remained relatively stable over the years.
Earnings after taxes as a percentage of total equity showed fluctuations, with a significant decrease in 2022.
Treasury stock as a percentage of total equity remained relatively small.
Overall, the common-size analysis of the balance sheet suggests trends such as a decrease in reliance on short-term assets, an increase in cash and marketable securities, fluctuations in accounts receivable and inventory, and an increase in long-term assets and long-term investments It's important to analyze the reasons behind these trends, such as changes in the company's business strategy, market conditions, or financial decisions Additionally, comparing these trends with industry benchmarks and the company's historical data can provide further insights into its financial health and performance.
Common-size Income statement GDT company
Based on the common-size income statement for GDT Company, let's analyze the situation of the company for the years 2020, 2021, and 2022:
Sales figures decreased in 2021 compared to 2020 but increased again in 2022.
Net sales as a percentage of total sales remained relatively stable throughout the three years.
Cost of Goods Sold (COGS):
COGS as a percentage of net sales decreased from 2020 to 2021 but increased in 2022.
This resulted in a decline in the gross profit margin in 2021, followed by an improvement in 2022.
Selling expenses as a percentage of net sales decreased from 2020 to 2021 but increased again in 2022.
Administration expenses showed an increasing trend, reaching their highest percentage in 2022.
Both selling and administration expenses contributed to a decrease in the operating profit margin in 2021 and a slight improvement in 2022.
Financial income as a percentage of net sales remained relatively stable over the three years.
Financial expense as a percentage of net sales decreased in 2021 but significantly increased in 2022.
The interest expense as a subcategory of financial expense also saw an increasing trend.
Other Income, Expense, and Profit/Loss:
Other income and other profit/loss fluctuated over the years, but their impact on the overall financials was relatively small.
Earnings Before Interest and Tax (EBIT):
EBIT as a percentage of net sales decreased from 2020 to 2021 but slightly improved in 2022.
This reflects the impact of the changes in gross profit, operating expenses, and financial expenses.
Current corporate income tax as a percentage of net sales remained relatively stable.
Deferred corporate income tax and its impact on net sales were negligible.
Net income as a percentage of net sales decreased from 2020 to
Overall, the company experienced a decline in profitability in 2021, followed by a modest recovery in 2022.
It's important to note that this analysis is based solely on the provided common-size income statement To gain a more comprehensive understanding of the company's situation, it would be beneficial to assess additional financial statements and consider other relevant factors such as industry trends, market conditions, and the company's overall financial health.
The common-size balance sheet of GDT
Current assets as a percentage of total assets decreased from
2020 to 2021 but increased again in 2022.
Cash and marketable securities as a percentage of total assets were relatively low in 2020 but increased significantly in 2021 and 2022.
Short-term investments as a percentage of total assets were significant in 2020 but decreased substantially in 2021 and 2022.Account receivable (current) as a percentage of total assets decreased from 2020 to 2021 but significantly increased in 2022.
Inventory as a percentage of total assets showed fluctuations but remained relatively stable over the years.
Goodwill and other assets as a percentage of total assets decreased over the years.
Long-term assets as a percentage of total assets increased from
2020 to 2021 but decreased slightly in 2022.
Fixed assets as a percentage of total assets remained relatively stable over the years.
Long-term unfinished assets were introduced in 2022 as a percentage of total assets.
Other long-term assets as a percentage of total assets increased from 2020 to 2022.
Current liabilities as a percentage of total liabilities remained relatively stable over the years.
Non-current liabilities as a percentage of total liabilities showed minor fluctuations but remained relatively stable.
Common stock as a percentage of total equity decreased from
2020 to 2021 but increased again in 2022.
Development and investment funds as a percentage of total equity remained relatively stable over the years.
Surplus equity as a percentage of total equity remained relatively stable over the years.
Treasury stock as a percentage of total equity showed fluctuations, with a decrease in 2022.
Earnings after taxes as a percentage of total equity increased over the years.
Overall, the company showed fluctuations in various components of its balance sheet from 2020 to 2022 The increase in cash and marketable securities and the significant increase in account receivable (current) in 2022 might indicate improved liquidity The introduction of long-term unfinished assets in 2022 suggests ongoing investments or projects The company's total equity increased over the years, primarily driven by retained earnings.
Common-size income statement GTA company
Based on the common-size income statement for GTA Company, let's analyze the income statement position of the company for the years 2020, 2021, and 2022:
Net sales as a percentage of total sales decreased slightly from
2020 to 2021 and further decreased in 2022.
Cost of Goods Sold (COGS):
COGS as a percentage of net sales remained relatively stable over the years, indicating consistent production or procurement costs.
Gross profit as a percentage of net sales showed a slight decrease from 2020 to 2021 and further decreased in 2022.
Financial income as a percentage of net sales remained relatively stable over the years.
Financial expenses as a percentage of net sales remained relatively stable over the years.
Interest expenses as a percentage of net sales remained relatively stable over the years.
Selling expenses as a percentage of net sales remained relatively stable over the years.
Administration expenses as a percentage of net sales remained relatively stable over the years.
Operating profit as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
Other Income, Expenses, and Profit/Loss:
Other income as a percentage of net sales showed fluctuations but remained relatively low.
Other expenses as a percentage of net sales showed fluctuations but remained relatively low.
Other profit/loss as a percentage of net sales showed fluctuations, with a significant negative impact in 2022.
Earnings Before Interest and Tax (EBIT):
EBIT as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
Corporate income tax as a percentage of net sales remained relatively stable over the years.
Net income after taxes as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
GTA Company's financial performance has seen declines in net sales, gross profit, operating profit, and net income over the years Other income, expenses, and profit/loss fluctuations have influenced these changes Further investigation is necessary to determine the underlying causes, which may include alterations in pricing, production expenses, operational effectiveness, or external industry influences.
Common-size balance sheet GTA company
Based on the common-size income statement for GTA Company, let's analyze the income statement position of the company for the years 2020, 2021, and 2022:
Net sales as a percentage of total sales decreased slightly from
2020 to 2021 and further decreased in 2022.
Cost of Goods Sold (COGS):
COGS as a percentage of net sales remained relatively stable over the years, indicating consistent production or procurement costs.
Gross profit as a percentage of net sales showed a slight decrease from 2020 to 2021 and further decreased in 2022.
Financial income as a percentage of net sales remained relatively stable over the years.
Financial expenses as a percentage of net sales remained relatively stable over the years.
Interest expenses as a percentage of net sales remained relatively stable over the years.
Selling expenses as a percentage of net sales remained relatively stable over the years.
Administration expenses as a percentage of net sales remained relatively stable over the years.
Operating profit as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
Other Income, Expenses, and Profit/Loss:
Other income as a percentage of net sales showed fluctuations but remained relatively low.
Other expenses as a percentage of net sales showed fluctuations but remained relatively low.
Other profit/loss as a percentage of net sales showed fluctuations, with a significant negative impact in 2022.
Earnings Before Interest and Tax (EBIT):
EBIT as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
Corporate income tax as a percentage of net sales remained relatively stable over the years.
Net income after taxes as a percentage of net sales decreased from 2020 to 2021 and further decreased in 2022.
Overall, GTA Company experienced a decrease in net sales, gross profit, operating profit, and net income after taxes over the years The fluctuations in other income, expenses, and profit/loss contributed to the changes in profitability It is important to conduct further analysis to understand the reasons behind these changes, such as changes in pricing, production costs, operating efficiency, or external factors affecting the industry.
2.3 Perform Ratios analysis Calculate, comment on trend and compare with peer group or industry average.
This means that for every dollar of current liabilities, ACG Company has
$3.859 of current assets A current ratio above 1 indicates that the company has sufficient current assets to cover its current liabilities A ratio of 3.859 indicates a strong liquidity position, implying that ACG Company has a comfortable buffer to meet its short-term obligations.
The current ratio decreased to 3.051 in 2021 Although the ratio is still above 1, indicating that the company has enough current assets to cover its current liabilities, the decline suggests a decrease in liquidity compared to the previous year It would be beneficial to further investigate the reasons behind this decrease and assess the potential impact on the company's financial health.
The current ratio further declined to 2.489 in 2022 This indicates a continued decrease in liquidity compared to the previous year A ratio below 3 suggests that ACG Company may have a tighter ability to cover its short-term liabilities with its current assets It is important to closely monitor this trend and assess the company's ability to manage its current obligations effectively.
Overall, the decreasing trend in the current ratio from 2020 to 2022 raises concerns about ACG Company's liquidity position It indicates a potential decrease in the company's ability to meet its short-term obligations using its current assets Further analysis and evaluation of the company's financial statements and cash flow position would be necessary to gain a comprehensive understanding of its liquidity and financial health.
This means that for every dollar of current liabilities, ACG Company has
$2.447 of quick assets The quick ratio of 2.447 indicates a strong liquidity position, suggesting that the company has a significant amount of highly liquid assets to cover its short-term obligations without relying heavily on inventory.
The current ratio measures the company's ability to meet its short-term obligations using its current assets It is calculated by dividing current assets by current liabilities.
In 2020, the company had a current ratio of 1.376 This means that for every unit of current liability, the company had 1.376 units of current assets available to cover those obligations A higher current ratio generally indicates better short-term liquidity and the ability to meet current liabilities comfortably.
Perform Dupont analysis Calculate, comment on trend
Let's compare the financial performance of ACG, GTA, and GDT based on the DuPont analysis for the years 2020, 2021, and 2022.
ACG: The net profit margin has remained relatively stable over the years, ranging from 0.131068114 in 2020 to 0.137545359 in 2022.
GTA: The net profit margin has shown a slight decline over the years, from 0.03225371 in 2020 to 0.020967943 in 2022.
GDT: The net profit margin has also shown a slight decline over the years, from 0.199740283 in 2020 to 0.173278373 in 2022.
ACG: The total assets turnover has fluctuated over the years, ranging from 0.842916216 in 2020 to 0.818604166 in 2022.
GTA: The total assets turnover has remained relatively stable, ranging from 1.117622652 in 2020 to 1.301453865 in 2022.
GDT: The total assets turnover has shown a slight decline over the years, from 1.003869238 in 2020 to 0.984622602 in 2022.
ACG: The equity multiplier has increased over the years, indicating higher financial leverage, ranging from 1.266280424 in 2020 to
GTA: The equity multiplier has shown a declining trend, ranging from 3.003294468 in 2020 to 2.3114511 in 2022.
GDT: The equity multiplier has shown a slight decline, ranging from 1.474347342 in 2020 to 1.379327616 in 2022.
ACG: The ROA has fluctuated over the years, ranging from 0.110479439 in 2020 to 0.112595204 in 2022.
GTA: The ROA has shown a slight decline, ranging from 0.036047477 in
GDT: The ROA has shown some fluctuations, ranging from 0.200513126 in 2020 to 0.170613803 in 2022.
ACG: The ROE has shown some fluctuations, ranging from 0.139897951 in 2020 to 0.157348437 in 2022.
GTA: The ROE has shown a declining trend, ranging from 0.108261189 in
GDT: The ROE has also shown a declining trend, ranging from
In summary, ACG has maintained relatively stable net profit margins, while GTA and GDT have experienced a slight decline The total assets turnover has varied for all three companies, with GTA showing a relatively stable trend The equity multiplier has increased for ACG, decreased for GTA, and slightly decreased for GDT The ROA and ROE have shown fluctuations for ACG and GDT, while GTA has experienced a decline in both ratios.
Further analysis, including comparison with industry benchmarks and other financial metrics, is necessary to gain a more comprehensive understanding of the financial performance and efficiency of these companies.
What are the main factors that drive ROE?
Profit Margin: The profit margin indicates the company's ability to generate profits from its sales A higher profit margin means more net income is generated for each dollar of revenue, leading to a higher ROE.
Asset Turnover: Asset turnover measures how efficiently a company utilizes its assets to generate sales A higher asset turnover ratio indicates that the company is effectively using its assets to generate revenue, which can positively impact ROE.
Financial Leverage: Financial leverage refers to the use of debt to finance a company's operations When a company uses debt, it can amplify its return on equity However, excessive leverage can also increase financial risk and interest expenses, potentially lowering ROE.
Equity Multiplier: The equity multiplier, also known as the leverage ratio,measures the degree of financial leverage employed by a company It is calculated by dividing total assets by total equity A higher equity multiplier indicates a higher degree of financial leverage, which can positively impact ROE.
Comment on the Statement of Cash flows What can you
From the information provided in the statement of cash flows for ACG Company, the following observations can be made:
Over the past three years, the company has consistently reported positive net cash flows from operating activities, indicating financial stability This suggests that the company's primary business operations are generating enough cash flow to sustain its ongoing operations, highlighting its robust operating performance.
Investing Activities: The net cash flows from investing activities show significant variations between the years In 2020 and 2021, the company had substantial cash outflows, indicating investments in assets or acquisitions However, in 2022, there was a significant decrease in cash outflows, suggesting a reduction in investments This could be due to a change in the company's investment strategy or a decrease in capital expenditure Further analysis is required to determine the specific reasons behind these changes.
Financing Activities: The net cash flows from financing activities have shown fluctuations, including both positive and negative values In 2020 and 2021, the company had positive cash flows from financing activities, indicating the company raised capital through external sources such as debt or equity However, in 2022, there was a significant negative cash flow, indicating a decrease in financing activities, potentially due to debt repayment or share buybacks The negative value suggests that the company used cash from its operations or other sources to finance its activities.
Cash Position: The ending cash and cash equivalents for the company increased significantly from 2020 to 2022 This indicates a buildup of cash reserves over the years A higher cash position can be seen as a positive sign, providing the company with liquidity and the ability to meet its financial obligations, invest in growth opportunities, and weather any unexpected financial challenges.
The company's financial health appears promising based on its cash flow statement With positive cash flow from operations, an expanding cash position, and the capacity to self-finance, it seems financially stable However, a thorough examination of the company's broader financial record and relevant indicators is essential for a precise assessment of its financial well-being.
Conclusion
ACG Company has demonstrated strong financial performance, generating consistent profitability and positive cash flows However, to ensure long-term growth and enhance financial health, the company must analyze its financial statements and implement strategic measures This essay summarizes findings from ACG Company's financial statements, provides a perspective on its future, and recommends solutions for improving financial health.
ACG Company exhibits financial stability with consistent profits, demonstrating sound cost management and revenue generation The positive cash flow from operations reflects an efficient core business that generates cash However, the company should vigilantly monitor cash flow fluctuations in investing and financing activities to ensure sustained cash flow stability.
ACG Company's cash position has significantly improved over the years, signifying strong liquidity and the ability to meet financial obligations Enhanced cash reserves also provide opportunities for strategic investments and better financial resilience.
Perspective on the Company's Future:
ACG Company's financial health seems favorable However, a detailed analysis of financial statements, including key performance indicators and ratios, is necessary for a comprehensive perspective on the company's future This will aid in making informed decisions and shaping the company's trajectory.
Recommendations for Improving Financial Health:
Conduct a thorough financial analysis, focusing on key ratios and indicators.
Manage investing and financing activities to reduce cash flow fluctuations.
Optimize working capital management for improved liquidity.
Strengthen financial planning and forecasting processes.
Explore diversification and growth opportunities aligned with company strengths.
Implement regular financial monitoring and reporting
ACG Company's financial statements demonstrate positive performance.However, detailed analysis and strategic measures are essential for sustainable financial health and future growth By implementing recommended solutions, ACG Company can strengthen its financial position and achieve long-term success.