Student: Vương Văn Phương BANKING ACADEMY OF VIETNAM FACULTY OF FOREIGN LANGUAGES GRADUATION THESIS Impact of Capital Structure on Financial Performance of Vietnam Maritime Corporation
INTRODUCTION
Introduction
To achieve economic efficiency, a business needs both capital and effective management A longstanding challenge has been optimizing the structure of business capital This includes determining the appropriate distribution of owners' equity, the extent of borrowing from financial institutions like banks, and the decision to raise funds through the issuance of stocks or bonds.
The maritime industry is crucial to the global supply chain, particularly for coastal countries like Vietnam, as it enables the rapid transport of large quantities of goods over long distances Within this sector, businesses involved in sea transportation, port operations, and logistics management must optimize capital allocation, necessitating significant investments in vessels, infrastructure, technology, and personnel Strategic capital decisions directly impact a company's competitiveness in the market.
The maritime industry is highly capital-intensive, making capital structure decisions crucial for success Effective capital organization requires careful analysis and strategic planning This research focuses on VIMC, a leading company in sea transportation and maritime operations in Vietnam, to analyze the impact of capital structure on its financial performance.
Capital structure represents a combination of debt and equity used by a firm to finance its operations and expansion According to Khan and Jain (1997), capital
Capital structure comprises a mix of debt and equity securities that serve as a firm's permanent financing, including long-term debt, preference shares, and shareholder funds According to Pandey (2000), it represents a combination of various long-term funding sources and equity, such as reserves and surpluses Equity encompasses retained earnings and stocks, while debt includes both short-term and long-term sources from bonds and working capital Excessive reliance on debt can increase risks, leading to higher borrowing costs and adversely affecting performance Conversely, a higher equity ratio may mitigate risks but could also reduce earnings and limit investments in lucrative projects.
In the 1950s, Franco Modigliani and Merton Miller established the Modigliani and Miller theorem, which explores the connection between a company's capital structure and its financial performance They examined whether a firm's financial health relies on its financial structure under specific conditions However, the evolving business landscape introduced complexities like taxes, agency problems, and various costs, challenging traditional views on capital structure.
Capital refers to the funds invested in both tangible and intangible assets, which are essential for ongoing business operations aimed at generating profits.
A business's capital structure can significantly impact shareholder benefits, either positively or negatively As circumstances evolve, adapting the capital structure becomes essential, prompting managers to thoughtfully evaluate their decisions to ensure optimal outcomes.
Understanding how companies fund their operations requires an examination of the factors influencing their capital structure decisions Businesses typically utilize a mix of short-term and long-term debt to support their activities, reflecting a common practice in financial management.
To optimize capital structure, firms should consider rotating short-term capital as a substitute for long-term financing, aligning their strategies with specific analytical objectives (Rajan and Zingales, 1995) Various ratios are utilized to assess capital structure effectively.
The debt ratio, which is calculated by dividing total debt by total assets, serves as a crucial financial metric for assessing a company's financial leverage and its capability to fulfill financial obligations.
(Total debt is computed by adding a company’s short-term and long-term liabilities, or debt, and other fixed payment obligations)
The debt ratio is a crucial financial metric that investors and analysts use to assess a company's financial health A high debt ratio typically indicates that a company may be over-leveraged and struggling to meet its financial obligations Conversely, a low debt ratio suggests a robust financial position, making the business a more attractive and lower-risk investment option.
The debt-to-equity ratio is a key financial metric that assesses how much a company relies on debt compared to its own equity to fund its operations Unlike the debt ratio, which considers total assets, the debt-to-equity ratio uses total equity as its denominator, providing a clearer picture of a company's financial leverage.
The debt-to-equity ratio differs across industries, making it essential to compare similar competitors for accurate insights A higher ratio indicates that a company is leveraging debt financing effectively; however, excessively high ratios can signal potential difficulties in managing debt obligations.
The equity ratio is a key financial metric that assesses a company's leverage by indicating how well it finances its assets without relying on debt This ratio is calculated using a straightforward formula, highlighting the effectiveness of a company's capital structure.
A higher equity ratio indicates that a business is primarily funded by shareholders' capital, while a lower equity ratio suggests that the company relies more on loans for financing.
Although the above indicators are quite commonly used in capital structure analysis, they all revolve around the ratio between liabilities and equity in the total assets of a business
Research Objective
To investigate the connection between capital structure and financial performance of Vietnam Maritime Corporation (VIMC)
1 What is the relationship between capital structure and profitability of VIMC during the under review period?
2 How do different components of capital structure influence the financial performance?
3 How have changes in VIMC’s capital structure over time affected its financial performance, and what factors have driven these changes?
Scope and limitation of the research
The author faced significant limitations in analyzing the capital structure and financial performance of VIMC over a decade due to a one-month time constraint Additionally, despite efforts to obtain necessary information, access was denied by the Finance-Accounting Department of VIMC Compounding these challenges, the author encountered frequent technical difficulties with the digital library of the Banking Academy, hindering the research process.
Scope: The study focuses on analyzing the relationship between capital structure and financial performance of VIMC from 2021 to 2023.
Summary
The initial chapter examines the relationship between capital structure and financial performance in the Vietnam maritime industry, focusing on the Vietnam Maritime Corporation (VIMC) as a case study It introduces essential concepts such as capital structure and financial performance, along with relevant indicators The subsequent chapter will investigate theories and empirical evidence concerning the connection between a firm's capital structure and its financial performance.
LITERATURE REVIEW
This chapter explores the empirical literature on the relationship between capital structure and firm performance, highlighting key theories such as Modigliani and Miller, Agency Theory, Trade-off Theory, Pecking Order Theory, and Market Timing Theory.
The Modigliani and Miller theorem (1958) asserts that in a hypothetical perfect market—free from taxes, bankruptcy costs, agency costs, and characterized by symmetric information—a firm's overall value remains unaffected by its capital structure Essentially, this implies that a company cannot enhance its value through capital structure choices However, the real-world application of this theory is limited due to factors such as asymmetric information, transaction costs, and the influence of income taxes in the global business landscape.
In their 1963 study, Modigliani and Miller examined the role of tax considerations in financial leverage, highlighting how interest payments on debt can reduce tax obligations, thereby increasing a firm's value through interest tax shields While leveraging debt lowers the average cost of capital, it also heightens the risk to equity, which can increase the cost of equity They cautioned that despite the benefits of tax shields, firms should be wary of excessive financial leverage Additionally, considering personal income tax burdens, using retained earnings may prove to be a more cost-effective financing option than relying solely on debt.
Lenders typically set restrictions on a company's borrowing capacity in relation to its equity Additionally, many firms opt to borrow strategically or issue bonds below their maximum capacity to preserve untapped resources for unforeseen emergencies.
The Modigliani and Miller theorem offers essential insights into the relationship between capital structure and financial performance, highlighting the advantages of tax shields and the calculation of average capital costs However, when considering agency costs and asymmetrical information within imperfect business environments, the applicability of their 1963 findings may diminish in real-world scenarios.
The agency theory, introduced by Jensen and Meckling in 1976, examines the dynamics between principals and their agents, highlighting the costs arising from conflicts among managers, debtholders, and shareholders, as well as issues of information asymmetry Rather than focusing on maximizing firm value, managers may prioritize personal interests, often opting for high-risk projects that yield short-term gains This behavior can jeopardize shareholders' interests, who are primarily focused on long-term earnings growth, thereby exposing them to unnecessary risks due to managerial decisions.
Agency loss refers to the losses incurred by the principal due to agents acting against the principal's interests To mitigate agency costs, Harris and Raviv (1991) propose that firms increase financial leverage as a means to discipline managers While debtholders can restrict managerial behaviors to protect their interests, this approach also elevates the risk of financial distress and potential bankruptcy Consequently, as a company approaches the brink of bankruptcy, managers may become more productive and efficient to avoid negative outcomes.
12 to lose their jobs The restrictions weaken the managers’ decision-making power, thus lowering the shareholder-manager agency cost
The theory highlights the conflict between shareholders and debtholders, emphasizing that increased debt levels lead to higher agency costs Shareholders might engage in excessive risk-taking to boost their equity value, potentially harming debtholders, who rely on fixed claims to the firm's assets As debt levels rise, the likelihood of bankruptcy and financial distress also increases, resulting in greater agency costs and adversely affecting the firm's overall efficiency.
The agency problem is more prevalent in developing nations compared to developed ones due to factors like inadequate investor protection, pervasive corruption, and underdeveloped financial systems These issues lead to imperfect competition and poor corporate governance, resulting in higher costs for firms in managing financial leverage Additionally, the absence of robust institutions fosters opportunistic behavior among managers, significantly impacting a firm's capital structure.
The trade-off theory of capital structure posits that companies should strategically balance debt and equity in their financing to minimize the weighted average cost of capital This theory addresses the challenge of determining the optimal debt-to-equity ratio, considering the advantages and disadvantages associated with each funding source to effectively support business investments.
Trade-off theory suggests that weak firms rely primarily on bank debt for financing, as it outweighs any combination of market and bank debts, regardless of their priority structure This challenges the common belief that small or young firms shy away from public debt due to limited market access or high costs Instead, within the framework of trade-off theory, a hierarchy of debt sources emerges, placing bank financing at the forefront for these firms.
Debt is often favored over market debt due to its lower bankruptcy risk When banks possess complete bargaining power after the fact, companies can achieve their desired debt tax shields by solely depending on bank loans (Hackbarth et al., 2007).
Utilizing debt can lower costs through tax shields, but it also poses risks that can impact a company's financial stability In cases of insolvency or bankruptcy, creditor obligations take precedence over those to shareholders Consequently, it is essential for companies to maintain an optimized capital structure that minimizes the risk of financial distress and potential bankruptcy.
The Pecking Order theory, popularized by Myers and Majluf in 1984, posits that companies prefer internal financing over external sources When external financing is necessary, firms prioritize the least risky options, starting with retained earnings, followed by debt, and considering equity only as a last resort.
Figure 2.1: Illustration of Pecking Order Theory
The theory of asymmetrical information highlights a power imbalance in transactions, where internal managers have superior information about a company's asset values and growth prospects compared to external investors This disparity motivates managers to leverage internal financing, allowing them to withhold critical information regarding investment opportunities and potential profitability from outside stakeholders.
RESEARCH METHODOLOGY
Chapter 3 presents the research method utilized in the thesis The chapter has thus been structured into the research process, data collection and data analysis techniques, and summary of the chapter
Data collection, Data processing, Determining method
Analysis of the capital structure and financial performance of VIMC
Conclusion/Recommendations for the business
The author conducts extensive research by reviewing various materials and academic papers both in Vietnam and globally This thorough investigation enables the author to offer comprehensive definitions, terminology, and insights related to capital structure and financial performance in the thesis The next steps involve data collection, data processing, and the determination of appropriate methodologies.
The data utilized in this study was gathered from the Finance-Accountant Department of VIMC and various public sources, subsequently processed using Microsoft Excel Following data security measures, the author determined that comparative analysis would be the most appropriate methodology for the thesis.
The author analyzes the selected data of VIMC from 2021 to 2023 by using horizontal and vertical analysis methods
The author presents the findings from the analyzed data, the capital structure situation, the performance, and the impact of capital structure has on the financial performance
The author makes a general assessment, suggests some potential recommendations for the company to improve the output
The financial analysis of VIMC is based on collected documents from 2021 to 2023, including financial reports such as financial statements, balance sheets, cash flow statements, and accompanying footnotes, along with publicly available statistics and documents.
Data processing will be conducted using Microsoft Excel, with thorough verification by the author The author will meticulously choose appropriate indicators for the thesis.
Comparative methods are essential for evaluating financial performance, as they help identify trends and fluctuations in various metrics To effectively conduct a comparative analysis, it is crucial to establish a clear basis for comparison, outline the specific conditions for comparison, and define the objectives of the analysis.
When analyzing growth rates and fluctuations of indicators, the previous period's data serves as the baseline for comparisons For year-over-year assessments, the corresponding period from the previous year is utilized as the reference point.
The conditions for comparison of economic indicators: o Consistent methods for calculating indicators o Uniformity in measurement units o Consistent economic content o Equivalent business surroundings
The goals for comparison: o Determine the trends/patterns of the indicators
Horizontal analysis, or trend analysis, evaluates a company's performance over time by comparing financial data from different periods, such as year-over-year changes This method highlights variations in line items, utilizing both absolute and percentage comparisons to provide insights into financial trends.
- Gather financial information, choose the baseline and compare subsequent periods against the base
- Calculate the absolute value by subtracting the base’s value from the current value
- Calculate the percentage change by dividing the current absolute value by the base’s absolute value and multiplying by 100
Vertical analysis, also known as common size analysis, is a financial technique that helps identify relationships between items within the same financial statement by expressing all amounts as a percentage of a total, which is considered 100% This method allows for easy comparison and analysis of financial data.
- Select a base item (Assets, Revenues,…)
- Identify a line item to analyze
- Calculate the percentage of the chosen line item by dividing the line item value by the base item value and multiplying by 100
DuPont analysis breaks down the components that influence return on equity (ROE), enabling investors to pinpoint critical financial performance metrics and assess a company's strengths and weaknesses effectively.
DuPont analysis significantly influences business management by enabling financial managers to thoroughly assess the company's financial performance This analytical tool provides a comprehensive evaluation, allowing for a deeper understanding of key financial metrics and their interrelationships, ultimately guiding strategic decision-making.
21 objectively examine factors that are affecting efficiency Therefore, appropriate solutions to enhance the operation effectiveness will be proposed (Investopedia, n.d.)
This chapter summarizes the research procedure, focusing on data sourced from VIMC's financial statements and annual reports It outlines the data collection methods and methodologies employed, including comparative methods and the DuPont analysis The review period for this research spans from 2021 to 2023.
FINDINGS AND DISCUSSIONS
In 2021, amid the challenges posed by the Covid-19 epidemic in Vietnam, VIMC strategically monitored maritime markets and transformed obstacles into opportunities The corporation adeptly navigated negotiations with partners and flexibly adjusted contracts, leading to a restructuring of business operations By embracing advanced management tools through IT and digital transformation, and with the collective determination of its leadership and staff, VIMC achieved commendable results in 2021.
VIMC achieved a remarkable cargo throughput of 125.9 million tons, reflecting a 113.7% increase from the previous year and exceeding the target of 105.4% Maritime transportation volume also rose significantly to 22.8 million tons Consolidated revenue reached an impressive 14,300 trillion VND, surpassing projections by 132%, while profits surged to 3,640 trillion VND, marking a staggering 729% growth.
In 2023, VIMC and its affiliates encountered significant challenges due to an economic downturn marked by declining GDP growth, trade, and investment The industry faced high inflation rates, geopolitical conflicts, and extreme weather conditions, contributing to a tough operating environment As a result, global trade growth was projected to decrease sharply from 5.2% in 2022 to a mere 2%.
2023, below the average 4.9% for 2019-2020 period
The dry bulk shipping market faced significant challenges due to decreased demand for key commodities like coal, ore, clinker, and grains, particularly impacting the Supramax and Handysize segments Factors such as the looming threat of a global economic recession, the ongoing Russian-Ukraine conflict, and China's sluggish recovery contributed to this decline As a result, the Baltic Dry Index (BDI) fell to its lowest level since May 2020, reaching just 500 points.
In 2023, container shipping experienced a significant downturn, with the World Container Index (WCI) dropping over 60% compared to the previous year Global industrial production and containerized freight traffic remained bleak, lacking any signs of recovery Contributing factors included weakened purchasing power in key markets such as the US and Europe, resulting in elevated inventory levels and diminished import demand.
The tanker shipping market has shown stability, driven by the emergence of new transport routes influenced by US and EU pressures on Russian oil imports This stability is further supported by low tanker supply, particularly in the Medium Range (MR) segment, which has helped maintain steady freight rates.
VIMC's port system faces escalating competition from newly established private seaports that offer flexible pricing and innovative marketing strategies Amidst challenging circumstances, shipping lines are compelled to reduce costs, which adversely affects port handling revenue Additionally, logistics providers struggle with rising operating costs, such as fuel and electricity, while many exporters contend with a decline in orders, leading to decreased goods movement between warehouses and transportation hubs.
The maritime industry, particularly VIMC, is significantly influenced by rising competition and declining demand for cargo transportation, which have adversely impacted VIMC's business operations and overall performance.
Between 2021 and 2023, VIMC's consolidated income statements reveal fluctuations in key financial metrics In 2021, the company reported revenue of approximately VND 13.27 trillion, which increased to VND 14.34 trillion in 2022 but declined to VND 12.82 trillion in 2023 Net revenue followed a similar trend, peaking in 2022 at VND 14.34 trillion before dropping to VND 12.81 trillion in 2023 Gross profit decreased significantly from VND 3.63 trillion in 2021 to VND 2.40 trillion in 2023 Financial income varied, reaching its highest at VND 664.61 billion in 2023, while financial expenses notably decreased from VND 558.72 billion in 2021 to VND 257.55 billion in 2023 Operating profit also saw a decline, from VND 3.33 trillion in 2021 to VND 1.78 trillion in 2023 Ultimately, net profit after tax fell from VND 3.19 trillion in 2021 to VND 1.70 trillion in 2023, with basic earnings per share decreasing from 1,825 to 968 over the same period.
Deduction from Revenue -2,017,749,543 25% 4,459,374,112 749% Net Revenue 1,076,241,669,000 108% -1,527,979,498,992 89% Cost of goods sold 728,198,135,278 108% 45,264,693,821 100%
Of which: Interest Expense -124,485,066,385 75% -173,562,057,295 54% Share of associates and joint ventures' result -623,379,162,880 22% -19,938,427,508 89% Selling Expenses 48,277,335,577 145% -17,641,593,179 89%
Profit Before Tax -584,688,964,593 84% -929,316,175,154 70% Current Corporate Tax
Net Profit after Tax -648,489,039,731 80% -838,658,657,578 67% Net Profit after Tax of the
The financial performance of a business reflects its operational efficiency and solvency An analysis of VIMC's financial results from 2021 to 2023 reveals that after achieving revenue growth and increased profitability in 2022, the company faced significant challenges in 2023, resulting in a substantial decline in revenue and reduced profit levels.
In 2022, VIMC experienced an 8% revenue increase, reaching 1,074.2 million VND compared to 2021, accompanied by a 10% rise in gross profit, indicating improved gross margins This growth was driven by the recovery of the sea transportation market in the latter half of 2021, along with effective management strategies, restructuring policies, cost-reduction measures, and the integration of advanced technology in its operations.
Financial income, which encompasses interest and investment income, experienced a 9% decline in 2022 but saw a significant recovery with a 23% increase in 2023, likely driven by elevated interest rates in the first half of the year.
In 2023, the company's performance sharply contrasted with the previous year, as revenue fell by 11% while the cost of goods sold remained stable This led to a significant 40% reduction in gross profit compared to the prior year VIMC and its affiliates faced a challenging global economic landscape, characterized by stagnant GDP growth, declining global trade and investment, persistently high inflation, escalating geopolitical tensions due to ongoing conflicts in Europe and the Middle East, and frequent extreme weather events These factors collectively contributed to a decline in revenue from maritime services, dividend income, and profits from invested companies.
2022 was a growth year in general for the corporation’s revenues, though it came with a cost of high operating expenses leading to suppressed profit
27 growing level 2023 brought challenges with declining revenues which caused a drop in profit despite cost cutting efforts from the managers
Costs of goods sold/Revenue
General and Administrative expenses/Revenue Ratio 7.8% 9.2% 8.2% 14.4%
In 2022, operating expenses surged significantly, with selling expenses increasing by 45% and general and administrative expenses rising by 29% However, in 2023, management enacted cost-control measures and restructuring policies, leading to reductions of 11% in selling expenses and 21% in general and administrative expenses Additionally, interest expenses saw a substantial decline, dropping from 3.8% of revenues in 2021 to 2.6% in 2022, and further to 1.6% in 2023, primarily due to VIMC's commitment to repaying debt to the Vietnam Development Bank and restructuring or fully paying off most commercial loans.
Let’s take a look at VIMC, the costs of goods sold to revenue ratio was stable at around 72%, but it raised considerably in 2023 to over 81% Costs grew much faster in
In 2023, the maritime industry continues to face significant challenges with high fuel, maintenance, and wage costs, leading to substantial capital expenditures and operational expenses As a result, the cost of goods sold can account for approximately 70% to 80% of total revenue, highlighting the financial pressures within this sector.
RECOMMENDATIONS AND CONCLUSION
5.1 Prospects of the Maritime Industry
The maritime industry is characterized by its cyclical nature, experiencing fluctuations between periods of boom and bust This sector is particularly sensitive to the economic and political landscape, as well as to developments in the global supply chain Between 2020 and 2022, supply chain disruptions led to soaring freight costs and increased demand for essential goods, benefiting many marine companies However, by 2023, the situation took a downturn.
The ongoing Russian-Ukraine war and soaring inflation rates have severely impacted purchasing power, leading to a decline in the container shipping sector As one of the world's largest exporters of wheat, corn, and barley, Ukraine's conflict with Russia has caused significant disruptions in grain exports, driving prices higher (Mien, 2022) Additionally, fuel costs have surged due to diminished supply, exacerbated by sanctions on Russia, a key oil producer, and potential disruptions from the Gaza conflict (Nguyen, 2024) This unprecedented inflation, the highest seen since the 1980s in many nations, has further eroded consumers' purchasing capacity.
China, as the world's largest importer, plays a crucial role in global trade Following the end of its Zero Covid policy in late 2022, China initiated an open trading program aimed at stimulating economic recovery, significantly enhancing the reconnection of the global logistics network.
To combat rising inflation, central banks worldwide have introduced new interest rates, leading to anticipated slowdowns in developed economies such as the USA, China, and the EU This economic shift is prompting businesses to reevaluate their fundraising strategies, which could significantly impact their operations.
Vietnam boasts extensive coastlines and a modern seaport system that supports the economy's export and import needs In 2022, the total cargo transported through Vietnamese seaports reached approximately 733.18 million tons, reflecting a 4% increase from 2021 This included 179.07 million tons of exported goods (a 3% decrease), 209.26 million tons of imported goods (a 2% decrease), and 342.79 million tons of domestic products (a 12% increase) Rising freight costs, coupled with the expansion of trading routes to China, Japan, Southeast Asia, and select European countries, contributed to significant revenue and profit growth in Vietnam's maritime industry.
By 2023, Drewry estimates that the fleet will see an addition of approximately 2.5 million 20-foot containers This surge in supply, coupled with a decline in demand, has led to a continuous drop in freight costs since their peak between June and September 2021 As a result, companies in the maritime sector are bracing for intense competition and significantly shrinking profit margins However, the decline in fuel costs at the end of 2023 has provided some relief, reducing overall expenses and benefiting businesses reliant on port handling.
From Chapter 4, it is evident that VIMC was inefficient in using its capital resources and managing its inventory
VICM faced significant challenges in inventory and receivables management, highlighted by low inventory turnover and declining receivables turnover, indicating poor asset handling practices The period from 2021 to 2023 brought fluctuations due to various events that disrupted supply chains and demand To address these issues, VICM should invest in advanced inventory management and demand forecasting tools to optimize stock levels Additionally, improving the payment collection process by tightening credit policies can help reduce delays in receivables, ultimately accelerating cash flow.
VIMC has been ineffective in utilizing its assets and owner's equity, as evidenced by declining trends in ROA, total assets turnover, and ROE To remedy this situation, the company must conduct a comprehensive review of its asset and equity utilization, followed by strategic plans aimed at optimizing resource use These plans should be evaluated on a monthly or quarterly basis, serving as a foundation for assessing the efficiency of asset, equity, and debt utilization By analyzing capital usage efficiency, managers can make informed decisions regarding the company's direction and contractual agreements.
In recent years, rising interest rates have increased interest expenses while stock revenues have declined due to a bear market To support expansion and critical investment projects, VIMC must diversify its capital funding channels Although internal fundraising is an option, it often yields limited amounts The company can leverage its corporate reputation to access misappropriated funds or enhance commercial credit capital by fostering strong relationships with business partners and suppliers A more aggressive strategy involves issuing corporate bonds, provided the interest rate remains lower than the expected returns.
58 borrowing interest obviously The company could potentially negotiate with companies and investment funds from outside of the country to receive FDI
VIMC enhances managerial qualifications by facilitating elite finance courses at renowned institutions globally Regular participation in financial seminars and webinars ensures personnel remain informed about the latest industry trends for effective application in operations Additionally, researching and implementing cutting-edge management technologies is vital Finally, fostering employee cohesion and departmental collaboration is essential for achieving the company's long-term success.
The growth of Vietnam's maritime industry depends on key factors such as enhancing the legal framework and simplifying administrative processes to create a stable business environment By integrating advanced technologies like artificial intelligence for data analysis and forecasting, companies can gain insights into market trends, enabling them to remain competitive Furthermore, the implementation of tax reduction and incentive policies will help businesses lower costs and improve their competitiveness against major global shipping firms.
Vietnam's extensive coastlines present a significant opportunity for attracting foreign investment to drive the growth of its maritime industry To enhance import-export activities and improve service and product quality, Vietnamese companies must focus on accessing stringent markets such as the United States and Europe Significant investments in the seaport system have been made to meet both domestic and international demands To maximize operational efficiency, it is essential for managers to implement clear management policies tailored to specific regions Additionally, accelerating development initiatives will further strengthen the sector.
59 application of technology and digitalization of administrative processes can save operating time and facilitate seamless goods transshipment activities
In this chapter, the author outlines strategic directions for VIMC, emphasizing the importance of establishing an optimal capital structure to maximize output while minimizing input Additionally, the chapter provides governance recommendations aimed at helping VIMC and similar companies enhance their capital structure and overall performance.
A business cannot thrive without capital, as it is essential for its existence and operations An optimized capital structure enhances operational efficiency and strengthens the financial position of the company While capital structure may not have a long-term impact on a company's financial health, it significantly affects business operations, efficiency, and the benefits received by owners through financial leverage.
This thesis explores the theoretical framework related to capital structure and financial performance, specifically focusing on the Vietnam Maritime Corporation's utilization of capital resources It assesses the company's achievements and limitations, ultimately offering potential solutions to address its challenges.