financial management module individual assignment for financial analysis

Part 02: Company Financial Health AnalysisFinancial Statements Income Statement and Balance Sheet of An Giang Import - Export Company 2020 - 2022 : a.. Then, in 1988, the company changed

THE UNIVERSITY OF DANANGVNUK INSTITUTE FOR RESEARCH AND EXECUTIVE EDUCATION

FINANCIAL MANAGEMENT MODULEACADEMIC YEAR 2023 – 2024INDIVIDUAL ASSIGNMENT FOR FINANCIAL ANALYSIS

Student Name:Student ID: Chosen organisation:

ĐOÀN ĐỨC LONG21010066An Giang Import - Export Company (HNX: AGM)

Institutional affiliation: VN-UK Institute for Research and Executive Education, the University

of Danang

Lecturer MSc Ngo Nguyen Bao Tran

November 2023

I Part 01: Company Background - An Giang Import - Export Company1 An Giang Import - Export Company’s General Information and History:

a General Informationb History and Development Progress

2 Industry and Market Analysis:

a Internal Environment, External Environment, and Opportunitiesb Vision, Mission and Core values

c Evaluation of forms of business organisation of An Giang Import - Export Company and agency problems

II Part 02: Company Financial Health AnalysisFinancial Statements (Income Statement and Balance Sheet) of An Giang Import - Export Company 2020 - 2022 :

a Evaluation of the Income statementb Evaluation of the Balance Sheetc Evaluation of Financial Ratiosd Evaluation of Revenue and Profit over the time periode Evaluation the company’s financial condition and performance over the last three years and comparing the ratios with those of the competitors or the industry

III CONCLUSIONREFERENCES

I. Part 01: Company Background - An Giang Import - Export Company

1 An Giang Import - Export Company’s General Information and History:

a General Information

Legal Name: An Giang Import - Export Company

Stock Sticker: AGM

Chartel Capital: 182,000,000,000 VND

Head Office: 01 Ngo Gia Tu - My Long Ward - City Long Xuyen - An Giang provinceAngimex is a leading enterprise in Vietnam in the fields of food, agricultural supplies and trade services The company was founded in 1976 and equitized in 2008 With more than 47years of experience, Angimex has built trust and acceptance from customers in many international and domestic markets Angimex's main fields are paddy and rice The company establishes a strict quality control system to provide products that meet high quality standards and professional services, meeting customer expectations and requirements

Angimex is an example of an An Giang Province (and, by extension, Vietnam) firm that is always concerned with environmental protection and community welfare Our company's goal and duty throughout the process is to "join hands to build a new look for Vietnamese rural areas as well as An Giang rural areas and always connecting with farmers in the rice value chain." company

b History and Development Progress

Initially established in 1976, the company operated under the name of An Giang Province Import-Export Union Company Then, in 1988, the company changed its name to An Giang Import-Export Company Union, expanded its business capabilities and was allowed by the Ministry of Foreign Economic Relations to export rice directly, opening up opportunities to participate into the international market

Between 1991 and 2010, ANGIMEX was able to diversify its operations and grow worldwide,particularly in the rice export industry Ever since the Angimex - Kitoku Joint Venture was formed in 1991, the company has produced and exported premium round-grain rice, showcasing its inventiveness and global presence.The company's 2008 conversion to a joint stock company and its 2008–2009 domestic market expansion through the launch of new rice brands including An Gia and Muc Dong show its dedication to care and diversification meeting the requirements of domestic clients Significant efforts were taken in 2010 to boost the company's production and management skills in the agricultural business, including the "Rice storage, rice drying system" project and the transformation of An Toan Rice Factory into An Toan Rice Production and Trading Enterprise.

During the period from 2011 to 2014, ANGIMEX Company demonstrated diversification and uniform growth The increase in charter capital up to VND 182 billion and innovation through the preferred stock program (ESOP) provide resources for development ANGIMEX became the first unit licensed by the Ministry of Industry and Trade to export rice, expand its store and centre system, and build a Rice Processing Complex Listing shares on HOSE, winning the "High Quality Vietnamese Goods" award, and expanding into the fields of rice seed and plant protection drug production are all important successes Completing the project "Rice storage, rice drying system" and starting construction of Da Phuoc Rice Processing Factory are important steps, confirming ANGIMEX's commitment to quality and performance in agriculture

Through a number of significant events between 2020 and 2022, ANGIMEX showed its adaptability and dedication to diversification in its business plan By creating new subsidiaries and changing its business model, the company grows and solidifies its place in the market By taking these crucial actions, ANGIMEX aims to manage and grow its subsidiaries, optimise the corporate structure, and expand its business into new industries like green agriculture and high technology These occurrences serve as evidence of ANGIMEX's ongoing development, innovation, and commercial expansion

2 Industry and Market Analysis:

Rice agriculture has a long history in Vietnam, going back thousands of years Vietnam's economy and culture rely heavily on rice It is one of the most lucrative export products from Vietnam's agricultural sector and is utilised as a staple item in regular meals After India, Vietnam was the world's second-largest exporter of rice in 2021

According to statistics from the customs agency, in 2022, Vietnam's tea export turnover will reach 7.1 million tons with a value of 3.45 billion USD, an increase of 13.8% in volume and an increase of 5.1% in turnover in the same period in 2021

According to a report from the Ministry of Agriculture and Rural Development, as of early April this year, average export reached nearly 3 million tons, with a turnover of 1.56 billion USD, an increase of 43.6% in volume and 54.5% in volume % about the same value In particular, the average export price is estimated at 526 USD/ton, up 7.6% over the same period With this price, it helps Binh Vietnam surpass Thailand and rise to the leading position in the world, and is also the highest possible price in the past 2 years.

More than 148 million metric tons of milled rice were produced in China during the 2021–2022 crop year—more than any other nation With more than 129 million metric tons of milled rice produced in that crop year, India ranked second One of the main competitors in the world rice market is Vietnam It is one of the biggest rice exporters in the world and is renowned for its premium rice Vietnam produced about 28.2 million metric tons of milled rice in the 2021–2022 crop year With this amount of production, Vietnam is one of the world's top producers of rice

Although rice is used in many various cultures and cuisines, China is the nation that consumes the most of it, followed by Bangladesh and India Roughly 65% of Chinese people eat rice as part of their regular diet on a daily basis In contrast, over half of the people in India eat rice, making it a staple diet Vietnam is another significant nation that consumes rice In all parts of Vietnam, rice is a staple food that is eaten by many people By 2022, Vietnam will have conserved almost 22 million tons of rice, placing it fifth in the world.

An Giang Import-Export Joint Stock Company (Code: AGM) fell into a loss when static revenue in the third quarter reached 710 billion VND, down 45% over the same period and the business error was nearly 29 billion VND.In September 2022, the company recorded a 33% increase in revenue to 3,092 billion VND but an error of 35 billion VND, while in the same period the profit was 18 billion VND.In 2022, An Giang Import-Export targets revenue of 3,929 billion VND and pre-tax profit of 25 billion VND So after 9 months, the company made 79% of revenue but still far from the interest rate target

a Internal Environment, External Environment, and OpportunitiesInternal Environment.

An Giang Import - Export Company's competitive advantages over its rivals are as follows:

● Strong Supplier Network: An Giang Import-Export Company has built a strong

network of trustworthy suppliers, giving them access to premium goods at affordablecosts This offers them a competitive edge over rivals who would find it difficult to maintain the same calibre of supplier connections in terms of product availability andcost effectiveness

● Extensive Product Range: The company offers a diverse range of products across

multiple categories, catering to various customer needs This breadth of product offerings gives An Giang Import-Export Company an advantage by providing one-stopsolutions for customers, reducing the need for them to source from multiple suppliers

● Quality Control Measures: An Giang Import-Export Company prioritizes quality

control and has rigorous procedures in place to ensure that their products consistently meet or exceed customer expectations This commitment to quality builds trust and loyalty among customers who value reliable and consistent products

● Efficient Logistics and Distribution: The company has developed efficient logistics

and distribution channels, enabling them to deliver products promptly and reliably tocustomers Their streamlined supply chain management and warehousing

capabilities result in faster order fulfilment and reduced lead times compared to competitors who may face logistical challenges

● Market Knowledge and Expertise: An Giang Import-Export Company possesses

in-depth knowledge and expertise in their target markets They closely monitor market trends, consumer preferences, and regulatory changes, allowing them to adapt quickly and stay ahead of the competition This market intelligence enables them to

identify new opportunities and tailor their product offerings to meet market demands.

● Strong Customer Relationships: An Giang Import-Export Company places a strong

emphasis on building and nurturing long-term customer relationships They strive to provide excellent customer service, customised solutions, and prompt

responsiveness to customer inquiries and concerns This focus on customer satisfaction fosters loyalty and encourages repeat business

● Financial Stability: An Giang Import-Export Company maintains a strong financial

position, which enables them to make strategic investments, secure favourable terms with suppliers, and withstand market fluctuations Their financial stability instils confidence in customers, suppliers, and other stakeholders, providing a competitive advantage

Cổ đông trong nước 17.853.430178.534.300.00098,10%

Through this data, we can see some meaningful points about the shareholder structure of AGM company:

● Domestic shareholders hold the largest ownership percentage with 98.10% of shares.Among them, individuals account for 80.97% and organisations account for 17.13%.● Foreign shareholders account for a smaller ownership ratio of 1.90% of shares

Among them, foreign individuals account for 0.01% and foreign organisations account for 1.89%

Revenue from foreign markets accounts for the majority of the company's total revenue, with a ratio of 62%, while domestic revenue represents only 38% of the total revenue This indicates that Angimex has a strong vision and export capabilities, generating substantial income from the international market.

Within the foreign market revenue breakdown, the Asian market plays the most crucial role, contributing 91% of the total revenue from foreign markets This highlights Angimex's strong focus on developing and accessing the Asian market, which can lead to success and stable growth in this region The markets of the Americas and the Middle East also contribute a smaller but significant portion, with ratios of 3% and 5% respectively.However, Europe and Australia do not generate substantial revenue compared to other markets This suggests that Angimex needs to enhance its business operations and market access in these regions to leverage their potential and expand its scope of activities

In summary, the revenue structure of rice sales across markets for Angimex demonstrates a concentration on export activities and underscores the significant role of the Asian market in the company's profitability Additionally, it indicates potential for development and the need to improve business operations in other markets such as Europe and Australia.In 2022, the export of rice is facing challenges due to a narrowing market caused by politicaltensions and intense competition from other rice-exporting countries Angimex, however, has responded by intensifying export promotion activities and diversifying into potential markets like the Americas and Australia Despite the initial revenue proportion being only 3%, this strategic move helps compensate for the decline in traditional markets Angimex's focus on investing in technology and improving product quality enhances its

competitiveness in the global market and has a positive impact on domestic rice production.By diversifying its product range and meeting the demands of different customer segments, Angimex aims to maintain its position as a leading rice exporter and strengthen its presencein the global market

External Environment and Opportunities.

The average export price for rice has been rising steadily since the year's commencement Vietnam's average rice export price, which is also the export price, increased by over 9% from the beginning of the year to almost $552 USD/ton in June alone highest historical

average export.The business results of rice firms for the second quarter and the first half of 2023, however, have not yet shown this positive price movement.

The Loc Troi (LTG) corporation had a noteworthy improvement in the second quarter At VND 3,678 billion, the company's net sales climbed by 4% compared to the same time in theprevious year Specifically, LTG's greatest quarterly profit in the company's listing history—nearly 425 billion VND—was made possible by the revenues from joint ventures and associates Another company that did well in the second quarter was Southern Food Company (VSF) VSF is the industry leader in revenue, having generated 6,867 billion VND, a57% increase in the same period Still, the profit was not even close to 10 billion VND This profit amount, meanwhile, is still double that of the same time last year and has significantly impacted VSF's interest rate performance in the first half of the year The corporation attributed its successful business outcome to its diligent observation of market conditions and timely capture of opportunities Trung An (TAR) also had an impressive revenue growth in the second quarter With revenue reaching 1,615 billion VND, double thesame period, TAR recorded a remarkable achievement However, the cost burden caused TAR to suffer an after-tax loss of nearly 8 billion VND, while in the same period last year the company had a profit of 23.6 billion VND

Angimex (AGM) reported noteworthy business results for the second quarter The company's revenue dropped by 88% to only 162 billion VND during the same period Due to

the cost burden, AGM lost VND 33.6 billion, which is twice as much as it lost during the same period last year This is also AGM's fourth consecutive quarter of declining sales The consecutive quarterly losses of Angimex (AGM) indicate that the company is facing difficulties in its business operations The main reasons for these losses could include:

1 Declining revenue: The significant 88% drop in revenue from the same time last year

indicates that AGM may be having trouble gaining market share or keeping consumers This drop could be caused by elements like shifting consumer demand, fierce competition, and price swings

2 Cost burden: AGM is burdened with high costs, which exert significant pressure on

the company's profitability Failure to control costs or a significant increase in expenses can lead to substantial losses

3 Management and business strategy issues: When a company reports consistent

losses over a long period of time, it may indicate underlying management and strategic issues This could include a failure to adapt to the market, a lack of product and service innovation, or a lack of a long-term development strategy

AGM may need to take steps to improve the business situation, like reducing wasteful spending, streamlining operations, looking for new market opportunities, and raising the caliber of goods and services The business should also assess and modify its business plan to conform to the needs of the market and guarantee long-term viability

In comparison to the loss of 6.2 billion VND during the same period previous year, Angimex reported a semi-annual loss of 67 billion VND This outcome makes AGM's target of turning a VND 12 billion profit this year more challenging When Angimex's revenue declines from 2021 to 2022, the company's financial situation will become more challenging.

b Vision, Mission and Core values

Vision: Angimex aims to develop into a leading specialised Agricultural corporation in

Vietnam, constantly learning, innovating and creating a high-tech and sustainable agricultural ecosystem

Mission: Angimex always accompanies farmers to improve the quality of Vietnamese

agricultural products and enhance the position of Vietnamese agriculture in the international arena

Core Values: Angimex always puts the word " PRESTIGE – CONSCIENCE – INTELLECT " on the

top position in business activities, considers PRESTIGE as a competitive weapon, CONSCIENCE as the foundation, INTELLIGENCE as the vitality

Positioning: Angimex creates a brand value by the quality of each product from sustainable

development and environmental protection with international standard processes

Objective: 1.The main goals of the Company: In order to maximise profits for shareholders, give

workers stable employment, and raise the standard of living for both the general public and farmers in An Giang and the Mekong Delta, Angimex wants to grow into a large-scale production and trading company in the food and service industry This goal is accomplished by creating value-added products, offering farmers cutting-edgeagricultural services, and conducting productive, sustainable company operations

2.Medium and long-term development strategy:

Angimex sets out specific development strategies for each industry in the medium and long term as follows:

● Food industry: Increasing efficiency, quality, and productivity is the foundation of thesustainable development goal The primary operation is still exporting; widening

markets, emphasising markets for premium rice products, and retaining and growing local commercial clientele Additionally, actively and successfully contribute to the creation of valuable products from rice and value-added items that follow rice.● Trade - Service Industry: Concentrating on servicing and replacement parts

operations Enhance the calibre of maintenance and repairs to boost HEAD and General Stores' service operations' efficiency; preserve and grow the number of vehicles under the Honda VN brand in conjunction with other brands; creating additional customer agency systems for lubricants and spare parts with the goal of capturing 70%–80% of the province's spare parts market; Investigate and create new markets, services, and goods

● High-Tech Agriculture Industry: Enhancing agricultural technical services to benefit farmers in the Mekong Delta and promoting research and development of rice seed products, organic fertilisers, microbial organic fertilisers, and biological pesticides in away that is safe for the environment and users' health

3 Sustainable development goals (environmental, social and community) and main programs related to the short and medium term of the Company:

Angimex understands the necessity for suitable strategies and policies that fit the company's circumstances at every stage in order to achieve sustainable development The following goals have been given priority by the company, with an emphasis on sustainable development:

● Assisting with the state budget and giving employees steady, long-term jobs.● Maintaining alliances with partners, suppliers, and rice growers

● Responsible production includes using green and ecologically friendly production techniques, ensuring that rice-producing regions adhere to allowable pesticide residue levels, and maintaining ISO and HACCP procedures in factories to guarantee product quality and food safety

● Taking part in provincial social welfare initiatives

Furthermore, the government and the company work together to achieve the 17 sustainable development goals that the government has established.

c Evaluation of forms of business organisation of An Giang Import - Export Company and agency problems

The Angimex structure with the parent company owning less than 70% of the equity of its subsidiaries can create the possibility for the company to transfer profits to its subsidiaries However, in the case of Angimex, where almost all subsidiaries are wholly owned at 100%, this can provide reassurance that there is no need for them to transfer benefits externally

When the parent company owns all the shares of its subsidiaries, the transfer of benefits between companies within the group becomes easier The parent company can decide to transfer profits or assets from the subsidiaries to the parent company to leverage favourable advantages in financial management and taxation.

ANGIMEX is a partner in joint ventures with the following businesses: Louis - Angimex Trading Company Limited (32.96%), Angimex Company Limited (32.96%), and Saigon - An Giang Trading Company Limited (25%) It is evident that ANGIMEX does not have total control over these joint venture companies when the ownership ratio is less than 50% By taking part in joint ventures, ANGIMEX can collaborate and split profits with other companies, extending the reach of its business Be proactive and seize chances in related fields By sharing benefits and risks with partners, ANGIMEX is able to reduce financial risk and broaden its business interests, as evidenced by its ownership of less than 50% in joint venture companies

The board of directors of ANGIMEX has assumed its role over the past 1 to 2 years, indicating that the members of the board may not have extensive experience and tenure within the company This could potentially affect their ability to make decisions and formulate appropriate strategies for the company Furthermore, the board of directors does not include any members who own shares in ANGIMEX, indicating that they do not have direct financial interests in the company However, to have a comprehensive and accurate assessment of the performance and management capabilities of the board of directors, additional information and detailed research on each member and their activities within the company would be necessary.

Firstly, we can determine that the domestic shareholders have an ownership ratio of 98.1%.This means that domestic shareholders own nearly all or the majority of the shares of Angimex Secondly, the foreign shareholder ownership ratio is 1.9% This figure is very smallcompared to the ownership ratio of domestic shareholders.

Based on the above data, we can conclude that domestic shareholders hold a large and almost complete ownership structure of Angimex, while foreign shareholders only hold a very small percentage This indicates the concentration of company ownership in the hands of domestic shareholders and the almost absence of foreign shareholders (If there are foreign investment funds, you can be more assured because their standards for quality are usually stricter when it comes to owning or holding shares of certain companies It is a notable point that can provide us with more confidence in the quality of the business.)

From the provided information, it can be concluded that major shareholders (holding 5% or more of voting shares) account for 7.87%, while shareholders holding less than 5% of votingshares account for 92.13% This indicates the distribution of voting rights among

shareholders in ANGIMEX.It can be inferred that there are some major shareholders who own a portion of shares above 5% However, this ratio is not high, and the majority of shareholders only hold a smaller quantity of shares, that is, below 5% This suggests that the company has a diversified shareholder base and is not overly reliant on a few major shareholders.This information can be indicative of the power hierarchy and distribution of voting rights inthe company Major shareholders, with ownership of 5% or more, may have significant influence over the company's strategic decisions and governance, while shareholders holding less than 5% of voting shares do not have as much influence

II Part 02: Company Financial Health Analysis Financial Statements (Income Statement and Balance Sheet) of An Giang Import - Export Company 2020 - 2022 :

The key competitor of AGM in the rice industry is Trung An Hi-Tech Farming JSC ( TAR) The following tables illustrate the financial history of both companies and few insights into the company’s financial trends and industry trends within the period 2020 - 2022

31/12

01/01-ASSETSA SHORT-TERM ASSETS580,877 1,301,464783,979

B LONG-TERM ASSETS177,729554,953796,82

III Investment properties

TOTAL ASSETS758,606 1,856,416 1,580,799OWNER'S EQUITY

A LIABILITIES319,66 1,373,757 1,288,786

B OWNER'S EQUITY438,946482,659236,748

II Other resources and funds

C MINORITY'S INTEREST55,265TOTAL OWNER'S EQUITY AND LIABILITIES758,606 1,856,416 1,580,799

II Short-term financial investments

B LONG-TERM ASSETS615,968589,631715,525

I Long-term receivables

III Investment properties

TOTAL ASSETS1,373,3922,000,8302,793,133OWNER'S EQUITY