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Analyze the financial statement of phu nhuan jewelry joint stock company from 2021 to 2023

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Tiêu đề Analyze the financial statement of Phu Nhuan Jewelry Joint Stock Company from 2021 to 2023
Tác giả Nguyễn Đặng Nam, Lê Thiện Hoàng Long, Trương Huỳnh Mỹ, Bùi Nguyễn Kha
Người hướng dẫn Vũ Việt Quảng
Trường học UEH University
Chuyên ngành Financial Statement Analysis
Thể loại Group Assignment
Năm xuất bản 2024
Định dạng
Số trang 28
Dung lượng 2,34 MB

Nội dung

ANALYSIS OF INCOME STATEMENT AND BALANCE SHEET Balance Sheet Analysis  Current Assets: The current assets of Phu Nhuan Jewelry changed significantly from 2021 to 2023..  Non-cu

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SCHOOL OF FINANCE

GROUP ASSIGNMENTCourse: Financial Statement Analysis (24D1FIN50504802)

Student Name Student Code

Date submitted: March 22nd, 2024

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Table of Contents

I BUSINESS ENVIRONMENT ANALYSIS: 5

1 The outlook of Vietnam’s economy 5

2 Industry analysis 5

II INTRODUCTION: 6

1 About PNJ: 6

2 SWOT analysis: 6

III ANALYSIS OF INCOME STATEMENT AND BALANCE SHEET 8

Balance Sheet Analysis 8

1 Income statement analysis 9

IV CASH FLOW STATEMENT ANALYSIS: 11

1 Operating activities: 11

2 Investing activities: 11

3 Financing activities: 12

V RATIO ANALYSIS 13

1 Liquidity ratios: 13

2 Long-term solvency ratios: 16

3 Profitability ratio 17

VI RETURN ON INVESTED CAPITAL AND PROFITABILITY ANALYSIS 19

VII CREDIT ANALYSIS 22

1 Definition 22

2 Current ratio 23

3 Cash-based ratios measures of liquidity: 24

VIII CONCLUSION 27

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I BUSINESS ENVIRONMENT ANALYSIS:

1 The outlook of Vietnam’s economy

Vietnam's economy, after the impact of COVID-19 in the first 3 quarters of 2021, hasrecovered strongly Vietnam is considered one of the few Asian countries that did not fallinto a sharp economic decline during the Covid-19 pandemic

Vietnam continues to maintain strong development momentum, demonstrated throughfiscal and monetary policies supporting the recovery and socio-economic developmentprogram In particular, Vietnam has just upgraded its comprehensive strategic partnershipwith the US and South Korea, in which economic and trade relations are the focus ofdevelopment, making the international market increasingly open, and creating favorableconditions for economic development small for businesses to grow

In the face of the ongoing Russia-Ukraine conflict, while new conflicts broke out inthe Middle East and the Red Sea in the last months of 2023, although the GDP growthrate did not reach the set target, the export-import market is gloomy, Vietnam is stillconsidered a country with great potential to attract FDI, especially in the current trend ofrestructuring and diversifying supply and production chains Total registered FDI capital

in Vietnam as of December 20, 2023, reached nearly 20.2 billion USD, an increase of62.2%, and adjusted registered capital increased by 14%; The value of capitalcontribution and share purchases by foreign investors reached more than 8.5 billion USD,

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the industry such as PNJ, DOJI, SJC, Bao Tin Minh Chau will gain market share andcompete fiercely with each other.

Among the big names mentioned above, PNJ is far ahead of its competitors in terms ofnumber of stores Furthermore, they always maintain their position as the leading jewelryretailer in Vietnam with more than 55% market share in the jewelry market thanks to thepeak business season of the retail sector, especially jewelry retail when the weddingseason and festival season take place At the same time, people's need to hoard gold isincreasing in the context of significantly reduced savings interest rates and concernsabout economic fluctuations in the world also stimulating PNJ's gold bar sales

II INTRODUCTION:

1 About PNJ:

Phu Nhuan Jewelry Joint Stock Company is the leading brand in Vietnam in the field

of manufacturing and retailing jewelry made of gold, silver, and gemstones Afterofficially equitized, the company was established on 2nd January 2004 and transformedfrom an economic enterprise of the Communist Party of Vietnam into Phu Nhuan JewelryJoint Stock Company On 23 March 2009, the Company’s shares were officially listed inthe Ho Chi Minh City Stock Exchange (“HOSE”) with the stock trading code PNJ In

2010, PNJ was ranked 16th by Plimsoll in the top 500 largest jewelry companies in theworld The Company's headquarters is located at 170E Phan Dang Luu Street, Ward 3,Phu Nhuan District, Ho Chi Minh City, Vietnam PNJ's main business fields are jewelry,accessories, souvenir production, and trade Furthermore, PNJ has inspection services fordiamonds, precious stones & metals, also the firm has a trade in real estate

The size of the company is measured based on the company's supply chain, number ofemployees, revenue, and number of stores PNJ has over 350 retail stores nationwidemainly in Asia The net revenue of the company in 2022 achieved 33.876 million VNDwhich increased by nearly 73% compared with the previous year The company employsaround 7000 people, including managers, customer support agents, salespeople, andworkers in a variety of roles across the organization Moreover, PNJ has an extensivesupply chain network that it uses to form relationships with hundreds of top suppliers andmanufacturers locally as well as globally, guaranteeing a steady and varied supply of itsgoods and services PNJ’s board of directors consists of 10 members with Mrs Cao ThiNgoc Dung as chairman These are the reasons for our choice to carry out its financialanalysis This analysis seeks to assess the company's solvency position, operational andmanagerial efficiency, and earning potential Our ultimate objective is to give internaland external investors insightful information to help them make wise investment choices

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of jewelry not only satisfy aesthetic needs but also contribute to expressing individualityand distinction, favored by many customers Furthermore, PNJ's production, supplycapacity, and supply chain autonomy have become a huge advantage, helping PNJovercome obstacles caused by the pandemic, and best meet customer needs during theglobal pandemic Finally, PNJ claimed many awards when competing globally such asthe Jewelry World Award 2021 (JWA), Best Jewelry Manufacturer, and Manufacturer ofthe Year award (the only Vietnamese enterprise to receive this award to date) Award forBest Jewelry Manufacturer and Crafter of 2021

● Weakness:

PNJ's materials are mainly raw gold, silver, gems, and diamonds The characteristic ofthis group of raw materials is the continuous fluctuation of prices, creating significantrisks for businesses that do not have effective raw material price management methods.Also, the exports in PNJ only account for a fraction of total revenue due to thecharacteristics of the Vietnamese market: gold prices are higher when compared to that ofinternational, so they are not beneficial for exports

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have their customers If PNJ has a strong advantage in the system, small jewelrycompanies will be able to compete more on price According to a survey on fashionconsumer habits by Q&Me at the end of 2017, price is the most important factor inmaking shopping decisions, accounting for 23%.

Overall, PNJ has many significant advantages over its competitors despite operating

in a cutthroat business Notwithstanding the obstacles and threats, the company isanticipated to prosper due to its solid position, upcoming prospects, and ability toovercome obstacles

III ANALYSIS OF INCOME STATEMENT AND BALANCE SHEET

Balance Sheet Analysis

 Current Assets:

The current assets of Phu Nhuan Jewelry changed significantly from 2021 to 2023 In

2021, the current assets were recorded at a value of 9,292 billion VND which accountedfor 87,5% of total assets However, in 2023, the number increased to 12,960 billion VNDwhich accounted for 89,81% of the total assets This accomplishment results from acombination of factors from effective management, and flexible and consistent strategyimplementation to overcome challenges to harmoniously take care and exploit resources

At the same time, PNJ continues to pioneer sustainable development, enhance socialcapital accumulation, and earnestly implement environmentally friendly and compliantsolutions Looking into detail, Inventory is the main reason for the rise in current assets,from 8,754 billion VND to 10,940 billion VND ( 24,97% increase) between 2021 and

2023, respectively Furthermore, the amount of cash and cash equivalents held by PNJnearly tripled (from 355,454 billion VND to 896,147 billion VND) and there was also anincrease in short-term investments showing the strong financial capacity of the company

to carry out significant projects shortly

 Non-current Assets:

According to the balance sheets, there was a slight improvement over the 3 years, by

2023 it reached 1.469 billion VND, accounting for only a fraction of total assets Fixedassets and other long-term assets made up about 91% of non-current assets in 2022 and

2023 Specifically, fixed assets account for the majority, 68,6% in 2021, 64,4% in 2022and 60,05% in 2023 The reason for the decrease in percentage between fixed assets and

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non-current Assets is due to the purchase, liquidation, and sale of some old fixed assetsduring the three years.

 Current Liabilities:

Current Liabilities had a big change from 2021 to 2023 From 2021 to 2022 currentliabilities increased by 320 billion VND In 2022, current liabilities were recorded in36.6% of the enterprise’s total resources The significant change in current liabilities wasshort-term trade accounts payable and payable to employees In 2023 the currentliabilities decreased nearly 269 billion VND accounting for 31.97%, decreased by 4.63%compared with 2022 All of these decreases happened due to the impactful decrease inshort-term borrowing which PNJ tried to do to maintain a safe capital structure with asmaller risk and dependence on external capital

 Non-Current Liabilities:

In the period 2021-2023, the non-current liabilities declined and the major decreasewas in 2021-2022 which went down from 43 billion VND to nearly 10 billion VNDthanks to the provision for long-term liability In 2023 the decrease was narrowing whichwas 54 million VND The enterprise wanted to reduce the provision for long-termliability, which helps the enterprise have a longer time to pay the long-term debts

 Stockholders’s equity:

PNJ’s capital source structure in the period 2021-2023 had a constant increase Thebalance sheet showed that the equity accounts had a higher proportion than liabilitiesfrom the entire 2021-2023 period shows that the company has financial autonomy Equityfrom 2021, 2022, and 2023 were 6,012 billion VND, 8,444 billion VND, and nearly9,807 billion VND respectively In 3 years, the equity increased by 63% from 2021 to

2023 which helps to increase the capital source From 2021 to 2022 it increased 40% andaccounted for 63.3% of total resources and from 2022 to 2023 it also increased 16%which accounted for nearly 68% in total resources This increase happens due to thebetter use of capital and the attraction of capital investments

1 Income statement analysis

 Total operating revenues

Despite facing many difficulties caused by the COVID-19 pandemic and theeconomic depression, in 2022, PNJ still set many records in terms of revenue, and profit,surpassing the target plant compared to 2021, this was due to the changes in the jewelryline structure to match the target market Furthermore, the net revenue generated in 2022

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was 13,337 Billion VND, exceeding 73,3% compared to that of 2021 and in thefollowing year, the net revenue increased only a fraction, 8.2% to be specific Moving on

to the operating profit report, it also showed an upward from 2021 to 2023 In 2021, theoperating profit was only 1,279 Billion VND, however in 2022, the number went upsignificantly, and in the next year, it was 1,971 Billion VND, almost doubled compared

to 2021

The total revenue of PNJ mainly came from its core sectors: Jewelry retail, 24K goldretail, wholesale, and others, specifically, Jewelry Retail accounted for most of therevenue, 61.2% in 2022 and 59% in 2021

 Cost of goods sold:

The cost of goods sold in PNJ had few changes over the period with an increase of75,2% in 2022 and a slight decrease of 3,1% in 2023 The reason for this change was thesuccess in using the forecasting analytics platform and optimized supply chain, these twofactors led to higher mass production and a reduction in cost of materials In 2022 and

2023, PNJ launched a series of new collections with many innovative designs, meetingthe needs of users in different segments which led to a higher demand for jewelry andhigher sales, causing an increase in the cost of goods sold

 Total expenses:

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Total expenses of PNJ increased in the period 2021-2023, especially in 2022 with theselling expense Selling expenses in 2022 increased 1140 billion VND, about 68%compared with 2021 and in 2023 it had a small increase, about 7 billion VND Thisexpense happened due to the increase in output of the merchandise Financial expensesincreased slightly from 2021 to 2023 This is mainly caused by the change of interestexpense in 2021-2023 In 2021-2022, the interest expense decreased by 10%, and in2022-2023 it went back by increasing by 27% because of the increase in interest rate.

 Non-operating gains (or losses)

Income from sources unrelated to the regular operations of the company ororganization, such as dividends, interest income, profits or losses from investments, gains

or losses from foreign currency, or asset write-downs, is referred to as non-operating gain(or loss) Non-operating gains of PNJ are good with 13 billion VND in 2021, and 21billion VND in 2022, greater than 2021 nearly by 62%, and in 2023 it reached 69 billionVND more than 3 times than 2022

 Earning per share

Basic earnings per share in 2021 was 3184, implying that PNJ would earn 3184 VNDfor each of the outstanding shares; EPS in 2022 increased to 5223, equivalent to a growthrate of 64% In 2023 the EPS increased to 5435, about a 4% growth rate These ratesconclude that the PNJs were favored by the investors, and the willingness to pay offinvestors increased for each year, especially in 2022

IV CASH FLOW STATEMENT ANALYSIS:

1 Operating activities:

In operating activities, there was a drastic change in net accounting profit before tax,from 1,279 billion VND in 2021 to 2,489 billion VND in 2023 Furthermore, Provisionwas reduced to a third of the original numbers in 2021 (from 64,942 billion VND to21.219 billion VND), this means that the company had more money for reinvesting andmanufacturing more products in the market Moving on to Operating profit beforechanges in working capital also had an upward trend over the past 3 years, looking intodetail, changes in inventories show the clearest, from decreasing over 2,2 billion VND in

2021 to only minus 434 billion VND, However, depreciation and amortization onlyshowed little change in the 3 years

2 Investing activities:

In the investing activities, the company has the cash-out flow most in the purchases offixed assets and the other long-term assets and loans granted and term deposits placed at

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banks Purchasing term and fixed assets can be seen as part of the company's term plan to boost output, save expenses, and grow its business PNJ also used its money

long-to invest loans and term deposits placed at banks which were low-risk investments andenjoyed predictable cash flow With cash inflow, the collection of loans and termdeposits placed at banks was 200 billion VND, and in 2023 it grew up to 1680 billionVND, also in 2023 the loans granted and term deposits placed at banks went to 2240Trillion VND, concluding that the company invested more and earned more from thatinvestment That leads to the cash outflow from investing activities

3 Financing activities:

Looking at the financing activities, in 2022 proceeds from insurance of shares andproceeds from borrowings had a higher total cash flow to make the cash inflows offinancing activities In 2023 the company did not proceed from insurance of shares andthe proceeds from borrowings were not higher than repayments of borrowings anddividends paid, making the cash outflow of financing activities in 2023

Over three years, the cash flow of the firm was positive, which meant that the companygenerated more cash than it spent, it was also an indication of good financial health Fromthe liquidity and financial flexibility analysis, this provided a good sign

The company's free cash flow is also computed to see if it still has a positive cashflow after deducting capital expenses and dividend payments to preferred and commonstock Using the three-year total net operations cash flow, we were able to calculate thefirm's free cash flow, which came to -523 billion VND after deducting payments fordividends, additions to fixed assets, and other long-term assets PNJ has a negative freecash flow, which indicates that the company may struggle to sustain its present levels ofproductivity after accounting for finance and investment requirements

To examine the quality of the company's cash flow even more, the cash flowadequacy ratio is computed The company's cash flow adequacy ratio is 0.28, which isbelow 1 and regarded as a warning indication A ratio of less than one suggestsinsufficient

internal cash on hand to maintain the current rate of operating growth and dividendpayments

While free cash flow and cash flow adequacy ratio analyses suggest that the companymay have challenges in sustaining its present growth trajectory, it should be noted thatthese analyses are based on a snapshot of three years of survey data To determine the

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ultimate assessment of the cash flow quality and prospects of the company, the long-termdevelopment plan of the company has to be considered.

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 Quick ratio

The quick ratio measures a PNJ's ability to meet its short-term obligations with its most liquid assets and therefore excludes inventories from its current assets In 2021, the quick ratio was 0.117 In 2022, the number increased to 0,3 In 2023, it was 0,43 According to the data, this means that the company can be more liquid and generate cash more quickly

 Day sale outstanding

Days’ sales in receivables might reveal a company's ability to successfully recover payments from clients A company can shift such revenue to other activities as soon as itsreceivables are collected

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In the past three years, PNJ only needed 1 day to collect receivables However, there was

a significant change in average days payable, from 13 days in 2021 to 6 days in 2022

 Efficiency ratios

The efficiency ratio is typically used to analyze how well a company uses its assets and liabilities internally An efficiency ratio can calculate the turnover of receivables, the repayment of liabilities, the quantity and usage of equity, and the general use of inventoryand machinery

27,078,338,249 VND Average Inventory 7,650,323,850

VND

9,630,398,322 VND

10,705,549,645 VND

It can be seen that in the past 3 years, PNJ recorded a continuous increase in COGS and Average Inventory The reason for the high increase in COGS 2022 is due to the success in resource management strategy and long-term business orientation, for instance,targeting a specific type of customers and effective strategy for developing wholesale customers Eventually, this resulted in the increase in the Inventory Turnover ratio from 2,08 in 2021 to 2,52 in 2023 and the reduction in days in Inventory from 175 to 142 in the same period

 Account receivable turnover:

Net sales 19,547,058,364,834 33,876,454,559,153 33,136,929,196,429Average A/R 98,050,632,326 197,418,447,628 160,829,590,121

Ngày đăng: 15/10/2024, 16:19

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