individual assignment topic financial statement analysis

Not only that, but in 2011, the firm was named a "reliable supplier inVietnam and prominent brand." TH True Milk products made the list of the "top 100trusted and utilized items." TH Tru

FPT UNIVERSITY



INDIVIDUAL ASSIGNMENT

TOPIC: Financial statement analysis

Student ID : HS160020

Lecturer : Mr Bùi Lê Minh

11/2022

Table of contents

Part 1: Introduction

Part 2: Financial statement analysis

2.1.Financial data

2.2.Common-size analysis

2.3.Ratios analysis

2.4.Dupont analysis

2.5 Comment on the Statement of Cash

flows

2.4 Statement of cash flow

Part 3: Conclusion

Part 1: Introduction of TH Truemilk

Position:

TH Dairy Foods Joint Stock Company was established on February 24, 2009, is the first company of TH Group with an investment project in an industrial dairy farm, modern milk processing technology and a modern dairy system disciplined distribution

TH Group was established with the financial advice of Bac A Commercial Joint Stock Bank (True Story TH, n.d.)

Company name: TH Dairy Foods Joint Stock Company

Address: 166 Nguyen Thai Hoc, Quang Trung Ward, City Vinh, Nghe An Established date: 2009

The TH True MILK brand's logo is just its name, the letter "TH," with a gold star

in the top right corner The initials "TH" represent for the English term "True Happiness," which translates to "True Happiness" in Vietnamese TH Real MILK firm strives to deliver the message "Drinking TH True Milk is true happiness every day" with the range

of fresh, clean, natural milk under the moniker "TH." The logo graphic is straightforward, not stylized, and uses few colors, with the word "TH" in blue as the dominant hue, conveying environmental friendliness, trust in safety, and freshness The gold star in the right corner of the word "TH" indicates TH True MILK's reputation, standardization, and devotion to truly organic milk

In addition to financial services business and social security activities, Bac A Commercial Joint Stock Bank pays special attention to investing in the dairy and food processing industry

From that starting point, TH Group is gradually developing to become a leading manufacturer in Vietnam providing clean food products derived from nature, including fresh milk, meat, vegetables and fruits clean, seafood… of international quality For the third year in a row, TH True Milk has been named High Quality Vietnamese Goods Not only that, but in 2011, the firm was named a "reliable supplier in Vietnam and prominent brand." TH True Milk products made the list of the "top 100 trusted and utilized items." (TH True Milk Group: A journey of more than 10 years to redraw the `milk map` of Vietnam, 2020)

Market share:

TH true MILK fresh milk product currently accounts for about 43% market share in the fresh milk segment in Vietnam As the main name of the award mentioned above, the manufacturer TH true MILK is considered as "international class" with international quality and representative operator (tuoitre.vn)

According to a report by data company Biinform in 2017, TH Group holds 4% market share in Vietnam

Main business:

The company's main line of business is the dairy industry

Currently, TH True Milk brand has launched many different product lines to meet the needs of people Popular product lines of the brand include:

Dairy products: Pasteurized fresh milk, pasteurized fresh milk, Topkid formula fresh milk, natural yogurt, nut milk, pasteurized drinking yogurt

-Butter and cheese products: Natural unsalted butter, Mozzarella sticks

Beverages: TH True Milk Juice, TH True Milk Juice, TH True Milk RICE roasted rice water

Pure water

Ice cream products: Ice cream cones, ice cream flavors, ice cream boxes Japonica rice products FVF

2020 commemorates the 12th year of TH's market presence, with the mark of remarkable progress, owning strong trademarks that stand out for quality, such as: TH

genuine MILK fresh milk (accounting for 40 percent of fresh milk market share in Vietnam) TH School international school system, (True Story TH, n.d.)

Important projects:

The project of TH Group (with the TH True Milk brand) was implemented in October 2009 on a total planning area of 8,100ha in Nghia Dan district, Nghe An with a total investment of over 1.2 billion USD This is the project that has made TH True Milk achieve remarkable achievements The dairy project with the main brand of TH true MILK fresh milk was launched by Mrs Thai Huong - Founder, Chairman of the TH Group's Strategy Council in the context of the world dairy market facing the milk crisis Melamine contamination in China Along with that, Vietnam's milk market has more than

500 brands of milk and milk labeling regulations are not transparent, 92% of liquid milk products on the market are reconstituted milk powder

Over the past 12 years, TH true MILK has become a national brand - the pride of Vietnamese people and reaching out to the world, leading the market in the fresh milk segment with a market share of up to 45% TH's participation contributes to reducing the percentage of reconstituted milk powder on the market to less than 60%, making the milk market transparent

In 2020, TH Farm was certified by the World Records Union to achieve the record

of "The largest closed cluster of high-tech dairy farms in the world."

In just over 12 years, the harsh land in Nghia Dan district, Nghe An province has been covered with vast fields of sunflowers, grasslands and sorghum of TH Farm

Competitors:

TH True Milk entered Vietnam's dairy market in 2009 while already existing in both domestic and foreign markets with many well-known market segments such as Vinamilk, Moc Chau, Dutch lady, etc However, in recent years, despite many difficult economic years, TH True Milk dairy industry is one of the industries with good growth

rate Among industries, Vinamilk currently holds the largest market share and continues

to increase market share This is the biggest competitor of TH True Milk Another

competitor that TH True Milk must also pay attention to is Dutch Lady

Part 2: Financial statement analysis

2.1 Financial data

2.2 Common-size analysis

Table 1: Income statement of THM

Unit: Million dong

13 Net other

income/(expenses)

13b Venture company

profit/(loss)

14 Net accounting profit/(loss)

before tax

15 Business income tax

-current

16 Business income tax

-deferred

17 Business income tax

expenses

Table 2: Balance sheet of THM

ASSETS

II Net Value Short-term

investments

2 Provisions for impairments

of short-term investments

1 Trade accounts receivable 23,007 21,577 22,473 112,864 178,448

3 Intercompany receivables

4 Construction contract in

progress receivables

6 Provision for doubtful debts

2 Provision for decline in

inventories

4 Other current assets

1 Long-term customer

receivables

2 Long-term intercompany

receivables

4 Provision for doubtful LT

receivable

1 Tangible fixed assets

Accumulated depreciation

263,624 207,986 191,035 148,776 140,546

Accumulated depreciation -532,296 -599,987 -650,157 -681,267 -708,456

2 Finance lease assets

Cost

Accumulated depreciation

4 Construction in progress

III Net Investment

properties

1 Cost

2 Accumulated

depreciation

IV Long-term

investments

1 Investments in

subsidiaries

2 Investments in

associates

3 Other long-term

investments

4 Provision for

diminuation in value of

long-term investments

2 Deferred income tax

assets

3 Other long-term assets

VI Commercial advantage

CAPITAL

I Current liabilities 316,979 363,951 342,561 250,596 289,932

2 Short-term trade

payables

3 Advances from

customer

4 Taxes and liabilities to

State budget

7 Intercompany payables

progress payables

9 Other payables 115,852 176,930 189,567 49,071 5,970

II Long-term liabilities 2,073 2,048 2,913 60,090 23,649

2 Long-term intercompany

payables

3 Other long-term payables 2,073 2,048 2,913 60,090

4 Long-term borrowings

5 Deferred income tax liabilities

6 Provision for severance

allowances

7 Provision for long-term

liabilities

1,748

B Owner's equity 766,782 767,852 726,740 911,910 2,173,385

I Capital and researves 766,782 767,852 726,740 911,910 2,173,385

1 Paid-in capital 568,460 568,460 668,000 668,000 1,100,000

3 Owner's other capital

4 Treasury shares

5 Differences upon asset

revaluation

6 Foreign exchange differences

7 Investment and development

funds

64,468 82,532 16,694 44,768 76,679

8 Financial researve funds

9 Other funds in owners' equity

10 Undistributed earnings 133,853 116,860 42,046 199,142 179,432

Total Resources 1,085,834 1,133,851 1,072,214 1,222,596 2,486,966

Table 3: Revenue fluctuations of THM

7 of which: interest

expenses

-100.00

Interest expenses 300

-100.00

-100.00 -163

-274844

9 General and admin

expenses

-12.09

10 Operating

profit/(loss)

13 Net other

income/(expenses)

-202.36

-28.94

13b Venture company

profit/(loss)

14 Net accounting

profit/(loss) before tax

-27463 -12.03 -15190 -7.56 111961 60.32 56190 18.88

15 Business income

tax - current

16 Business income

tax - deferred

17 Business income

tax expenses

18 Net profit/(loss)

after tax

-36146 -16.67 -13699 -7.58 113793 68.16 38377 13.67 Through the data table, it can be seen that THM's revenue in the period

2107-2021 is trending up The highest revenue growth in this period was in 2020 with 10.27% THM's profit after tax in this period tended to grow well, although in the first three years this indicator was at a negative level However, in 2020 and 2021, this indicator is at a positive level In particular, in 2020, this indicator will increase to 68.16%

Table 4: Assets and capital fluctuations of THM

2018/2017 2019/2018 2020/2019 2021/2020 Amount % Amount % Amount % Amount %

ASSETS

A Current Assets 105532 12.96 -48863 -5.31 164690 18.90 1182896 114.20

I Cash and cash equivalents -75461 -76.52 50590 218.53 -52317 -70.95 70726 330.14

II Net Value Short-term investments 96162 26.12 -45050 -9.70 191815 45.74 1045848 171.13 III Accounts receivable 6588 9.92 -1718 -2.35 74075 103.90 127338 87.60

IV Inventories,net 75915 27.74 -55791 -15.96 -89337 -30.41 -11663 -5.70

I Long-term trade receivables 0 0 165 0 0.00

II Fixed Assets -55638 -21.11 -14378 -6.91 -42282 -21.84 -9560 -6.32

IV Long-term investments 16 35.56 15 24.59 8 10.53 0 0.00

V Other long-term assets -2234 -29.62 2077 39.14 -1376 -18.63 5131 85.40

1 Long-term prepayments -2234 -29.62 2077 39.14 -1376 -18.63 5131 85.40

Total Assets 48017 4.42 -61637 -5.44 150382 14.03 1264370 103.42

CAPITAL

A Liabilites 46947 14.71 -20525 -5.61 -34788 -10.07 2896 0.93

I Current liabilities 46972 14.82 -21390 -5.88 -91965 -26.85 39336 15.70

II Long-term liabilities -25 -1.21 865 42.24 57177 1962.82 -36441 -60.64

B Owner's equity 1070 0.14 -41112 -5.35 185170 25.48 1261475 138.33

I Capital and researves 1070 0.14 -41112 -5.35 185170 25.48 1261475 138.33

1 Paid-in capital 0 0.00 99540 17.51 0 0.00 432000 64.67

7 Investment and development funds 18064 -65838 -79.77 28074 168.17 31911 71.28

10 Undistributed earnings -16993 -12.70 -74814 -64.02 157096 373.63 -19710 -9.90

Total Resources 48017 4.42 -61637 -5.44 150382 14.03 1264370 103.42

THM's assets and capital in the period 2017-2021 have many fluctuations Total assets in 2019 decreased by 5.44% compared to 2018 In 2020, this indicator increased to 14.03% In 2021, the growth rate is up to 103.42%

2.3 Ratios analysis:

Table 5: Financial ratio of THM

31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021 Liquidity ratios

Efficiency ratio

Account Receivable

Turnover Ratio

Inventory Turnover

Ratio

Leverage ratio

Profit ratio

Market value ratio

Earnings Per Share 3,520.00 2,892.00 2,601.00 3,772.00 2,891.00 Book Value Per Share 13,488.74 13,507.57 10,840.82 13,613.18 19,746.95

Liquidity ratios show the liquidity of the enterprise, which is an indicator for the

Company to monitor its financial status in the short term, ensuring that it does not fall into a state of financial distress From 2017 to 2021, the Company's Current Ratio are always 1.5 times greater

Table 5.1: Financial ratio of Dutch Lady

Table 5.2: Financial ratio of Vinamilk

Current Ratio of TH True Milk in 2020 is 1.63 times higher than the current ratio in 2019

Current ratio of Dutch Lady in 2020 is 0.83 times higher than current ratio

in 2019

Current ratio of Vinamilk in 2020 increased 1,187 times the current ratio in 2019

TH True Milk's current ratio from 2019-2020 is the highest, proving the company's greater solvency Dutch Lady's is the lowest, showing that the solvency of this brand is lower than that of the other two brands

In 2019, Vinamilk's quick ratio held the top position: 1.37

The lowest is TH True Milk with a quick ratio of 0.42

In 2020, Vinamilk's quick ratio still holds the top position: 1.74, an increase of 1.27 times in 2019 The high value of quick ratio means that the business is completely able to pay debts immediately Short-term The brand further strengthens the confidence of investors

Meanwhile, Dutch Lady stood at the lowest with a quick ratio of 0.42, down 0.69 times compared to 2019 The value of Quick Ratio dropped rapidly, which means that the company's highly liquid assets are at a low level and difficult to control control,

it will be difficult for enterprises to quickly pay short-term debts

The quick ratio value of TH True Milk in 2020 increased the fastest among the

3 milk brands The quick ratio value in 2020 increased by 1.59 times compared to 2019 This is a sign of outstanding development

Efficiency ratio

The company's inventory in 2019 was quite large, accounting for 31.15% of short-term assets, meaning the company's liquidity decreased However, in 2020, the ratio of inventory/current assets will decrease to 19.69%, in 2021 it will decrease to 8.7%, the inventory turnover ratio will increase (from 6.44 times to 8.32 times), in 2021, the inventory turnover will increase to 10.22 times, this is a positive sign that the Company has applied a reasonable inventory management policy, ensuring the level of production

and supply for the market, during the year there was no significant slow-moving inventory

D/A reached 12.61, D/E reached 3.55% both of these indicators decreased compared to 2020 In which, short-term debt accounted for 13.34% of total capital This coefficient has always been maintained stable by Moc Chau Milk, the payment policies with suppliers, are tight and consistent with the operations of the manufacturing company

Profit ratio

From 2020, the Company has restructured the distribution system, optimized sales support programs, and reduced operating costs during the period; prioritizing the development of raw material areas to ensure the quality of input milk resulting in an increase in profit after tax of 13.6%, reaching more than VND 319.1 billion, ROE in

2020 reaching 34,26%, ROA reaching 24,47% This sign of positive business activities further increases the trust and attachment of shareholders in the development of THM in the future

2.4 Dupont:

Table 6: Dupon ananlysis

profit margin

Total asset turnover

Equity Multiplier

- The ROA decreased from 2017-2019, net profit margin and asset turnover are too

- The ROE decreased from 2017-2021, ROA was too while equity multiplier decreased from 2017 to 2021 (109,032 to 71,474) So ROA is the main factor

to drive ROE

ROE of industry = 15.39% -> ROE of THM lower than ROE of industry

2.5 Statement of cash flow: