Improving the performance of business operations at trung dung trading and development company limited

35 Chapter 2: Analyzing and evaluating the business performance of Trung Dung Trading and Development Company Limited.. Analyzing the current business performance of Trung Dung Trading

Hanoi, May 20th 2023

i

Protestation

I hereby declare that the thesis is the result of the research, study and research process Independent research under the guidance of instructor who is MCs Nguyen Thi Cam Giang The research content in this article is thoroughly reviewed and the results of the research are completely honest; The data in tables and figures are collected, statistically and calculated by me Evaluations and conclusions of other authors will be cited with full references and sources I hereby declare that this entire study has not been presented or published anywhere before

ACKNOWLEDGEMENTS

To complete this graduation thesis, in addition to my own efforts, I received a lot

of help and support from the university, the teachers as well as mentors, guiders and from my family So, first of all, I would like to express my sincere thanks to:

Vietnam Banking Academy have supported students like me to have enough professional knowledge to be able to complete this graduation thesis I will cherish myself because of this priceless experience I have never had the opportunity to learn with so many different knowledge before

Mrs Nguyen Thi Cam Giang enthusiastically guided me to carry out this graduation thesis, from the consultation, develop research methods, from stage to outline, edit and complete the final dissertation She provided me with many insigthtful remarks and excellent ideas This accomplishment would not have been possible without her

My family have supported me all the way in the process of implementing this graduation thesis I also want to express my appreciation to Mr Pham Trung Dung, who provided me with a lot of advice and support when I was doing internship at company

Finally, due to the limitation of knowledge and the lack of practical experience, my thesis content may have shortcomings and I look forward to receiving more advice and instruction from you

Best regads

Nguyen Thi My Duyen

iii

Table of contents

Protestation i

ACKNOWLEDGEMENTS ii

List of figures vii

INTRODUCTION 1

1 Background of study: 1

2 Overview of research: 2

3 Research gap 4

4 Research objectives 5

5 Research scope 6

6 Research methodology 6

6.1 Data collection method 6

6.2 Data analysis methods 6

7 Research data 7

8 Structure 7

Chapter 1: General theory of business performance of companies 10

1.1 General theory of business activities 10

1.1.1 Business activities definition: 10

1.1.2 Characteristics 11

1.1.3 Classification 12

1.2 Theory of business performance 13

1.2.1 Business performance definition 13

1.2.2 Roles 14

1.2.2.1 For business organizations 14

1.2.2.2 For workers 15

1.2.2.3 For the social - economic context 16

1.2.3 Data used to analyze business performance 17

1.2.3.1 Balance sheet analysis 17

1.2.3.2 Income Statement analysis 18

1.2.4 Financial Statement analysis 18

1.2.4.1 Capital Efficiency 18

1.2.4.2 Asset Efficiency 19

1.2.4.3 Profitability Ratios 23

1.2.5 The cash flow statement (CFS) 25

1.3 Methods for analyzing business performance 25

1.3.1 Comparison method 25

1.3.2 Elimination method 27

1.3.3 Ratio method 28

1.3.4 The DuPont analysis 28

1.4 Impact factors 32

1.4.1 Objective factors 32

1.4.1.1 Macroeconomics 32

1.4.1.2 Politics and law 32

1.4.1.3 Cultural and social environment 33

1.4.1.4 Related industries 33

1.4.2 Subjective factors 33

1.4.2.1 Business strategy 33

1.4.2.2 Organization of the enterprise apparatus 33

1.4.2.3 Marketing activities 33

1.4.2.4 Labor and salary budgeting 34

1.4.2.5 Working environment in the enterprise 34

1.4.2.6 Transport as well as usage technology 34

Conclusion of chapter 1 35

Chapter 2: Analyzing and evaluating the business performance of Trung Dung Trading and Development Company Limited 36

2.1 General introduction about company 36

2.1.1 Company foundation and development 36

2.1.2 Organizational structure of the company 36

2.1.3 Features of business lines: 37

2.2 Analyzing the current business performance of Trung Dung Trading and Development Company Limited (2020-2022) 38

2.2.1 Business results of Trung Dung Trading and Development Company Limited (2020-2022) 38

2.2.1.2 Revenue and profit situation 40

2.2.2 The current business performance of Trung Dung Trading and Development Company Limited (2020-2022) 49

2.2.2.1 Equity Efficiency 49

2.2.2.2 Asset Efficiency 49

2.2.2.3 Liquidity Analysis Ratios 52

2.2.2.4 Operational performance indicators 53

2.2.2.5 Profitability Ratios 54

2.2.2.5.1 Profitability Ratios of Trung Dung Trading and Development Company Limited 54

2.2.2.5.2 Comparison of Profitability Ratios with company in the same industry 58

2.2.3 Dupont analysis 59

2.3.4 The Cashflow Statement: 61

v

2.3.1.4 Profitability Ratios 65

2.3.2 Weakness 65

2.3.2.1 Asset Efficiency 65

2.3.2.2 Operational performance indicators 66

2.3.2.3 Profitability Ratios 66

3.3 Causes 67

2.3.3.1 Subjective 67

2.3.3.2 Objectivity 68

Conclusion of chapter 2 69

Chapter 3: Solutions and recommendations to improve the efficiency in business activities of Trung Dung Trading and Development Company Limited 70

3.1 Company development strategy 70

3.2 Recommendation to improve the efficiency in business activities of Trung Dung Trading and Development Company Limited 71

3.2.1 Recommendation to businesses 71

3.2.1.1 Solutions for reducing cost 71

3.2.1.2 Investment solutions in production technology 72

3.2.1.3 Release the inventory 72

3.2.1.4 Strengthening early collection strategies 73

3.2.1.5 Increase the size of business capital 74

3.2.1.6 Improving the quality of human resources 74

3.2.1.7 Promote marketing activities 75

3.2.1.8 Expand customer network 75

3.2.1.9 Business diversification 75

3.2.1.10 Ensure the quality of input and output sources 76

3.2.2 Recommendations for government and banking system 76

3.2.2.1 Recommendations for government 76

3.2.2.2 Recommendations for baking system 77

Conclusion of chapter 3 80

Conclusion 81

IV REFERENCE 82

List of table

Table 2.1 Balance sheet period 2020-2022 37

Table 2.2 Total capital period 2020-2022 40

Table 2.3 Financial Statement of company period 2020-2022 42

Table 2.4 Summarize Revenue from sales of merchandise and services rendered and total accounting profit before tax in the period 2020-2022 44

Table 2.5 Equity Efficiency period 2020-2022 49

Table 2.6 Asset Efficiency period 2020-2022 50

Table 2.7 The average growth rate of net revenue and the growth rate of short-term assets during the period 2020-2022 51

Table 2.8 Liquidity Analysis Ratios period 2020-2022 52

Table 2.9 Operational performance indicators period 2020-2022 53

Table 2.10 Profitability Ratios period 2020-2022 55

Table 2.11.Comparison of Profitability Ratios with company in the same industry 58

Table 2.12 Dupont analysis of ROA for 2020-2022 59

Table 2.13 Dupont analysis of ROE for 2020-2022 60

Table 2.14 The cashflow statement period 2020-2022 63

vii

List of figures

Figure 2.1 Grow rate of Revenue from sales of merchandises and services rendered in

period 2020-2022 43

Figure 2.2 Comparison of net sales and profit after tax for 2020-2022 47

Figure 2.3 Comparison with company in the same industry 48

Figure 2.4: Correlation between net revenue, profit after tax and ROS 56

Figure 2.5: The rate of fluctuation of Profitability Ratios 57

INTRODUCTION

1 Background of study:

Vietnam is currently rated highly with strong development, its GDP reached to

409 billion USD in 2022, up 8.02% from the previous year, the largest annual increase

in the period between 2011 and 2022 We must acknowledge that enormous manufacturing and commercial labor efforts across a variety of industries were required to maximize these outcomes Because of such growth conditions, businesses

in the same industry will face fierce competition to maintain their position in the market Therefore, businesses have to restructure themselves, keep up with market trends, increase manufacturing scale, etc to obtain an advantage over competitors

Businesses must identify both the advantages and disadvantages of their operations so that they can build upon them and advance Businesses need to concentrate on how effectively they run their operations in order to analyze that Maximizing profits and reducing production costs are always top priorities when doing business with any company Because of this, businesses need to correctly and clearly evaluate their present company capacity in order to better understand their whole business condition Additionally, it's important to understand market trends, keep firms fresh by altering policies, and quickly answer problems to recover and promote successful business

Trung Dung Trading and Development Company Limited with the main activity is trading services such as printing, construction, system installation and advertising, always prioritizes the core values of bringing the best experience to its customers After three years of the Covid-19 outbreak in full effect, this company has continued to grow throughout its operations However, due to shortcomings, difficulties, continually high client expectations, and intense competition among competitors, that period of time is also the most difficult for the company to survive Businesses are constantly worried about how to run more efficiently in the future

We need to take several actions to increase the effectiveness of company operations, and one of those tasks is to analyze the microenvironment, which includes the environment, the legislation, and microenvironments including products, financial issues, and business weaknesses Stemming from complex issues and

2

business concerns, the research paper focuses on analyzing the financial factors of the business to evaluate business performance Considering what I had learned and following my internship at the company, I made the following topic decision for my

Graduation Thesis: “Improving the performance of business operations at Trung

Dung Trading and Development Company Limited”

2 Overview of research:

The topic "Improving business performance" is not a new topic, so far there have been many authors working on this topic with a variety of different companies and for different research purposes However, this is a very important topic, all businesses, whether large corporations or small and medium companies, need to have perspectives and evaluate from the perspective of company finance, thereby finding strengths and weaknesses to overcome and promote

Optimizing production and business efficiency is a requirement for the existence and development of firms in the present climate of intense competition The solution to three fundamental economic problems: what to produce? How's the production going? made for who? centered on relationships between supply and demand, market prices, competition, and collaboration Businesses must decide how to run their operations on their own to account for profit and loss, increased profit, and decreased benefit The profit target now replaces all other manufacturing and commercial goals as the most important and essential Business owners must gather and make use of the resources that they are able to use while running any production and commercial activity in order to meet the goals set by the firm Businesses must employ a wide range of techniques and resources in order to maximize revenues as well as other objectives Production and business efficiency is one of the most effective tools In addition to allowing managers to assess their effectiveness, the computation of production and business efficiency also enables analysis to identify variables influencing the production and business efficiency of organizations From there, the necessary adjustments are made in both " maximizing results and minimizing costs" details

In overseas research sources, there are also research topics such as Yigit Aslan's article (2021) “Redeveloping Digital Strategies of Uber to Improving Business

Performance” The report points to critical analyze the digital strategies of Uber by using PESTEL, Porter’s Five Forces analysis, McKinsey 7S Model, … As a result, the author evaluated Uber's technological and communication weaknesses and suggested several recommendations to improve the commercial efficiency of the company The directions that the author gives include setting digital smart objectives and key performance indicators (KPIs), developing search engine optimisation (SEO) and blogging…

Most of the writers of domestic research papers on this topic will concentrate on using the financial statement situation by classifying it into groups of characteristics showing efficiency or will analyze in connection with company abilities Thereby, there will be the most specific view of the business and then will offer solutions that are suitable When writing about "Some solutions to improve the business efficiency

of Hung Phat Trading and Transport Co., Ltd." author Dao Thi Thu (2016) took the approach of creating and classifying indicators into distinct groups, including analyses

of asset use efficiency, using of capital, and analyses of capital use efficiency The analysis method used by the author is the comparison method, the balance sheet method and many others By doing so, the author evaluates the company's successes, limitations and offers new suggestions like creating a marketing department or working out what working capital is necessary With the topic "Analysis of the business performance of Quang Minh Long Trading - Production Co., Ltd in 2014-2016", author Nguyen Bao Huy (2017) also focuses on assessing the company's business outcomes, financial indicators, and comparing with the general level of the industry The article has pointed out the correct financial status of the company and found out development orientations and solutions to minimize costs, stimulate effective sales, …

On the same topic, at the Banking Academy, there are many students and master's thesis writers choose as their topic Among them, author Tran Manh Dat (2021) with the graduation thesis course "Improving business efficiency at Phu Thai Health and Beauty Care Joint Stock Company" has another approach to financial statements, which is to divide groups of indicators such as basic indicators reflecting business results, group of indicators of efficiency of asset use, With the goal of connecting synthetic analysis techniques, ratio techniques, The business performance

4

of the corporation was discussed as well in the article As an outcome, the author suggested actions that improve operations, increase management and the quality of human resources, and provide stronger guidance for the company's future Author Dang Minh Phuong used data collection techniques, information gathering techniques, numerical difference techniques, and balancing techniques in her master's thesis on

"Solutions to improve the business performance of AIP International Joint Stock Company" (2020) These techniques allowed her to observe how businesses operate, understand some of the challenges they face, and determine how to alter public perception in the face of warning signs of a company's decline and instability As a result, the author has suggested ways to boost productivity, including releasing inventory, stepping up customer collecting efforts, doing market research, and changing warranty and price policies

After researching, learning and analyzing reports, the Graduation Thesis course

with the topic "Improving the performance of business operations at Trung Dung

Trading and Development Company Limited" will take in and apply the main

analysis data is the financial statements of the latest year (2020-2022) The Graduation Thesis will be prepared with the firm's financial statements in mind, closely reviewing every detail to provide the clearest picture of the business performance of the organization Through that, it will give businesses the most overview of their business situation and suggest solutions, both on the side of businesses, agencies and authorities

to help the company develop further

3 Research gap

The research articles, theses, dissertations, articles that the author has researched have pointed out a lot of aspects of the business performance of the enterprise There are research works on a single firm as well as publications about the commercial performance of businesses in the same sector and industry In general, there are many different types of research publications on business performance in organizations However, the majority of research studies focus on businesses that can

be identified by an excellent level of production organization and highly professional company operations Meanwhile, the author studied the business performance of Trung Dung Trading and Development Company Limited, in terms of the number of

employees, total capital and total current revenue can be called a small company The arrangement of the company's activities is not totally formal due to the limited number

of workers As a result, there are still several research gaps in the author's thesis subject

The first reason, each business has its own origin, characteristics of the industry and history of operation, there are research articles that focus on general research about businesses or there are articles about specific enterprises, but in the case of Trung Dung Trading and Development Company Limited, there still have no research articles

The second reason is that each enterprise's situation has changed in a unique way over time, making it impossible to completely apply previous research to the present Instead, one can only carry forward and promote the studied issues

The third reason, in the author's research, is that a lot of recently published works only analyze and evaluate the business performance of businesses, but when it comes to offering solutions, they only provide general solutions that are not particularly close to the causes affecting the business efficiency of enterprises and do not have many applications to the business

In addition, as a result of this, when the author chooses this topic, there will be

no duplicate work with previously published research on company performance and solutions The author of the essay will outline the traits, issues, and causes preventing organizations from becoming more efficient while also providing solutions to increase corporate performance that are somewhat near to the company's situation

4 Research objectives

For all businesses that want to develop sustainably and achieve high business efficiency, they must put business efficiency goals on top Because of this, the thesis

was completed with the following main targets and topic "Improving the

performance of business operations at Trung Dung Trading and Development Company Limited"

- Organize the business's theoretical foundations for business performance

5 Research scope

Research object: Business performance of Trung Dung Trading and Service Company Limited

Research scope: based on data provided at the internship unit

About time: period from 2020-2022

6 Research methodology

The thesis course uses the following methods to accomplish research objectives:

6.1 Data collection method

Learning the basic theoretical issues of financial statement analysis (concepts, objectives, roles, meanings, techniques and methods of analysis) through learning materials and syllabus In addition, the company's financial statements from 2020 to

2022 are collected internally and also refer to similar articles to complete the thesis

6.2 Data analysis methods

In the process of analyzing financial statements at Trung Dung Trading and Development Company Limited, the thesis course uses a combination of the following analysis methods to clarify research content such as:

The comparative method is a way to think about one subject of study in contrast

to another The comparison objects must be related in the same direction, be compared

in terms of space and time, and share the same unit, This method is used to find connections in similarities and to explain continuity and change This approach makes

it possible to clearly understand the importance of a certain component throughout a particular time frame

The exclusion method is to determine how much of the impact of every factor

on business results, by determining the influence of each one of these factors then eliminating the effect of others This technique involves two steps and is known as the continuous replacement method because it substitutes the impact of each component one at a time The spread number technique, which is the alternate approach, involves directly feeding into each factor's fluctuation

Dupont analysis is used to evaluate the component parts of a company's ROE

This allows an investor to determine what financial activities contribute the most to the changes in ROE An investor can use tools like this to compare the operational efficiency of two similar firms Managers can use DuPont analysis to identify strengths or weaknesses that should be addressed The method is often used to get a specific view, helping to find the cause of the current financial situation Based on that, consider and give solutions to the financial situation as well as production and business efficiency of the company The main purpose of using this method is to show how to use equity so that the most profitable effect is possible

Other methods: Evaluation method, synthesis method, report writing method,

These are the basic methods used in most research works These methods help the author to effectively consider the outstanding as well as weak aspects of each indicator, thereby being able to present and synthesize logically the main points

7 Research data

Data used in the thesis include:

-Secondary data source: taken from the annual financial report of Trung Dung Trading and Development Company Limited

-Secondary data source: based on information collection in the market

8 Structure

In addition to sections such as introduction, table of contents, list of tables, conclusion, sources cited, the essay consists of three main chapters:

8

Chapter 1: General reasoning about business performance of companies

Chapter 2: Analyzing and evaluating the business performance of Trung Dung Trading and Development Company Limited

Chapter 3: Solutions and recommendations to improve the efficiency in business activities of Trung Dung Trading and Development Company Limited

Chapter 1: General theory of business performance of companies

1.1 General theory of business activities

1.1.1 Business activities definition:

We have gone through a variety of succeeding social - economic structures and changed as a result Since the advent of chattel slavery system to take the place of the first communist society, humanity has organized, produced, transported, and transferred products Business at the time developed gradually and started there It is regarded as the primary activity that adds the greatest value and advances

Business activities are broad, large activities that cover all activities of companies for the purpose of making profits Businesses are not required to take part

in every phase of the planning of product production, distribution, and consumption Each firm will operate with a particular set of expertise Through these activities, businesses will further improve productivity and develop stronger of the company In order to operate smoothly, each business will come up with a combination of specific policies, decisions and directions to operate

According to Clause 21- Article 4 of Law No 59/2020/QH14 of the Business

Law in Vietnam 2020: "“Business” or “Business operation” means continuous

execution of one, some or all stages including investment, manufacturing, sale or provision of services on the market for profit." Therefore, inclusive business activities

will include any activity that the business engages in with the primary purpose of making a profit This is a general term that encompasses all economic activities carried out by a company in the course of business

Therefore, unlike other pure civil activites (also exchange, provide services), the main goal of business is to make a profit For businesses, profit is generated when the amount of business proceeds (revenue) is greater than the amount due to expenses (business expenses), the proceeds sold minus expenses equal to profits Any activity, even if it looks like a business, whose goal is not to make a profit is not a business

Through the above legal document, business acts have the purpose of making profits (making profits), however when profits increase or not depends on the efficiency of that company In many cases, production and trade suffer losses but are

11

still business From a legal perspective, when defining business behavior, we are concerned with whether or not there is a goal to make a profit, not how to achieve that goal It might be said that traders' main objective is to make money, and any action that aims to do so is business

1.1.2 Characteristics

The main business is the exchange of goods and services All business activities are directly or indirectly related to the exchange of goods or services for money or the value of money This is the characteristic of business: aiming for profit, but the loss is also unavoidable Business activity also include losses In addition, carrying out transactions is a common activity in many commercial interactions, best demonstrated

by the exchange of products and services A product or service could go through a variety of transactions before it is delivered to the customer

Risk and uncertainty in business are problems that will inevitably happen to businesses Businesses have a lot of risks to manage When the market declines or the currency rate changes, risks might arise from the market, exchange rates, interest rates, etc Based on there, it will expose firms to risks and losses In addition, it is also possible to mention the risks caused by natural disasters, and external impacts, then the loss will be goods, affecting the services of the company In order to minimize losses when unforeseen issues arise, businesses operating in any industry need to have a risk prevention plan

The characteristics of business activities are also connecting production as well

as buyers and sellers Business activity can be connected with the production of goods

or services In the case that not all businesses are able to produce a whole production stage, industries might join hands and use their distinctive characteristics to develop each component There is always at least one buyer and one seller in a commercial transaction Therefore, business is also an activity that connects people, creates a large community and values to reach far

It is impossible not to mention that the characteristic of business activities is to maximize social obligations and solve human wants and needs Considering the demands of society is essential because modern businesses are aware of their social responsibility Service-oriented companies foster basic values From then, fulfilling

human wishes via doing business is the source of the problem Founders work to increase consumer happiness by creating and offering a variety of goods

1.1.3 Classification

The common ways to divide business activities are by industry, division by legal form, division by organizational method We can also focus on dividing the entire business into a business that only completes the production stage, the service business and the business of both production and service

Firstly, about production is the activity that actually combines the human resources of production to create products supplied to the market Products are things that meet a specific human need Because the production process is often separate from the product consumption process, the production structure of every factory company is usually locked in the manufacturing process, customers will not be a factor appearing in this production stage The main function of the business is creating products

Secondly, the business of the company is services This is the process of combining various resources to produce services that are offered to clients A service

is an activity or benefit that is often not specific that can directly serve customers or cross-selling products Most services will have basic characteristics that are non-material, not reserved, so the process of forming and providing services often takes place simultaneously The process of creating and providing services can frequently be related to customer presence People often have the need to use and consume both types of products and services More and more services are created as society progresses to fulfill the requirements of people Because of that, the value that services bring increasingly needs to be upgraded and accounts for a high proportion of gross domestic product (GDP)

Third, production and service business is an activity that includes both the function of performing production and providing services to customers The businesses that can carry out most of their business activities will include production associated with product consumption, production associated with repair and maintenance services These enterprises will fully carry out commercial activities such as goods purchase and sale, service provision, investment, trade promotion

13

Today's trend as businesses grow into large corporations, which can be inclusive and develop in the direction of diversifying the product and service activities they have

1.2 Theory of business performance

1.2.1 Business performance definition

In any activity, when we do it, we must come from certain purposes Business activities are about creating value, which must bring certain efficiency to the priority customer group of the business In his book Economics, Paul A Samuelson wrote:

"Efficiency means the most efficient use of the resources of the economy to satisfy the

desired needs of people" (Paul A Samuelson and Wiliam Dnordhau (1997),

Economics, 15th Edition, National Political Publishing House, p 125)

Business performance of enterprises is a huge category, this can also be considered as a guideline and orientation that any business aims for Because the business activities of the enterprise are towards the goal of maximizing profits and expanding the scale of the business; covering and dominating the market; create a lot

of wealth for yourself and also for society However, in reality, there are many different points of view when it comes to business performance

According to the textbook Economics of Trade and Services – Statistical

Publishing House 1998, there is a view that: "The economic efficiency of a production

and business process is an economic category reflecting the level of utilization of resources to achieve defined goals" This point of view presents the amount of

utilization of business and manufacturing operations under all different conditions Through this view, it is possible to determine the efficiency of production and business

in all fluctuating conditions because the main factor here is determined to be the use of resources to bring the highest efficiency

The point of view of Tran Ngoc Tho in the book Modern Corporate Finance, (2008, Statistics Publishing House, Hanoi) synthesized and only one point of view:

"Business performance is a quantity that compares the results obtained and the costs

spent to obtain those results" Business results are considered as a material quantity

created in the course of business activities Therefore, having results is not necessarily effective Business efficiency is a quantity that compares inputs and outputs in the

course of business activities and must be considered comprehensively in terms of space, time, qualitative and quantitative

In the current market economy of our country, the long-term goal of enterprises

is to do business efficiently and maximize profits Each organization must have a suitable business plan due to a constantly changing business environment In order to succeed in business, one must be able to think quickly and strategically Operational efficiency is a metric of effectiveness that reflects the real condition of production, business management organization, but it's also a crucial concern for a firm in a market economy From the above-mentioned perspectives, we can derive a general definition for the concept of business performance as:

"Business effectiveness is a general economic metric that measures how effectively businesses use their financial, human, and other resources to achieve their objectives Because of that, it has become a standard for evaluating, examining performance with businesses and considering the impact on the development of the economy."

1.2.2 Roles

Business performance reflects both the process as well as the production and business activities of people and society Because of that, we can clearly see the role of business performance that affects the following factors:

1.2.2.1 For business organizations

In order to be able to evaluate, manage and review the process of performing their business functions, companies are required to evaluate business performance Reviewing and calculating company performance not only reveals the amount of output and revenue but also enables managers to identify impact variables and take necessary action to improve production and revenue and reduce expenses to increase efficiency

Improving business efficiency is the basic basis to ensure the survival and development of businesses The continuing existence of a business is determined by its position in the market, but business efficiency is a direct factor to ensure this existence, and the goal of the business is to always survive and develop steadily

15

Therefore, increasing business efficiency is an essential requirement for all businesses engaged in the present market system Each business must continually expand its income source in order to fulfill its needs for continued existence and growth However, since the capital, technical, and other elements in the manufacturing process change only when specific conditions are met, businesses must boost their operational effectiveness in order to boost earnings

Improving business efficiency is a factor that promotes competition and progress in business It is the promotion of competition that requires businesses to explore and invest to create progress in business Accepting a market mechanism is to accept competition While the market is expanding, corporate competition is increasing in fierceness Nowadays, there is competition not just for products but also for quality, price, and other standards To achieve the goal of survival and expansion, businesses must win competition in the market Therefore, businesses need to offer high-quality goods and services at reasonable costs The final, overarching and long-term goal of every business enterprise in a market economy is to maximize profits, which is also the most important goal of the enterprise Therefore, it is enough not only to create and maintain competitiveness to survive and develop, but businesses also desire to be as profitable as possible and increasingly high in possible conditions

The more a business saves, the more resources it uses, the more chances it will have to make a profit The higher the business efficiency, the more it reflects that the enterprise has economically used resources In short, in order to meet the requirements

of the market, enterprises must improve their qualifications, innovate business activities, renovate organizations, management apparatus, improve business operations, manage and make good use of all resources in enterprises From there, it shows that the requirement to promote and improve business efficiency is always a problem for each business Thereby achieving the goals of the enterprise and contributing to the overall development of the country's economy

1.2.2.2 For workers

If the production and business efficiency of a company is improved, the first those who benefit are the employees for that company The first is that the income level will be increased and improved greatly, when the business has a large source of

profit, surely the people who perform the work will receive a salary that fits their hard work Additionally, it involves the growth of abilities, networks, and skills The business is expanding and developing is also a very suitable time for workers to hone their capacity and skills From there, you can develop your potential and become high-quality workers and the future can develop, the salary can increase a lot From there, creating a motivation to motivate employees to feel secure, focus on contributing to enterprises, promote the spirit of employees, thereby improving productivity to positively impact on improving production and business efficiency of enterprises In addition, the health of employees will also be significantly improved when there are insurance and security policies to ensure the quality of life

1.2.2.3 For the social - economic context

Business performance will be a measure of the economy as a whole The government must use the measurements of profit earned to assess the output and efficiency of the operation of businesses, therefore demonstrating the rate of economic growth If a company operates good business and grows business effectively, the first thing that business brings to the economy is to reflect the level of utilization of resources to achieve economic goals of a certain period The higher the economic goals, the better: Economic growth rate; Gross domestic product; National income and average national income Production and business efficiency increases, enterprises have conditions to improve the quality of goods, lower product costs, leading to lower selling prices, creating strong consumption for people That not only benefits businesses but also benefits the economy, contributing to economic stability and growth Moreover, revenues from the state budget are mainly from enterprises From there, economic indicators will be increased and improved markedly

Effective enterprises will create sources to promote social investment: enhance products, create jobs, build structures, improve social and cultural welfare, ensure environmental sanitation, promote economic development For example, the increased amount of tax paid by businesses helps the government build larger buildings, educate human resources, expand international relations along with social culture, the intellectual level is promoted, promote economic development, improve living standards for people, etc Improve mental stability and corporate trust to increase

17

worker productivity In addition to benefiting businesses, this also addresses the issue

of surplus labor and resolves challenges with the development and integration process

1.2.3 Data used to analyze business performance

1.2.3.1 Balance sheet analysis

The balance sheet is a consolidated financial statement, which generally reflects all existing assets and sources of asset formation of the enterprise at a specified time Analysis of asset and capital fluctuations allows to obtain the most necessary and general information about the asset situation, asset structure, mobilization and allocation situation of the enterprise as well as the ability to meet the needs of business operations

Assets and capital are two aspects of the same amount of existing assets of the business but are considered from two different angles Therefore, the analysis begins with an analysis of the increase or decrease in the assets of the company, in order to see the Changes in the size of assets The scale of the business is reflected in the total assets of the company, and its assets reflect its scale However, we must take into account the average revenue aim of the firm for the time period in order to assess the outcomes in the management and use of capital If the assets of the enterprise increase, sales revenue increases, the increase rate of revenue is greater than the increase rate of assets, it proves that the management and use of capital is good If the assets of the enterprise increase but the revenue does not increase or decrease, it proves that the management and use in the period is not good or inefficient

In addition, we need to consider the structure of assets in the total assets of the enterprise In the market mechanism, acquiring as many assets as possible, but what is more important is that enterprises allocate those assets to reasonable stages and effectively use these assets In other words, if the business has capital alone is not enough, it is important how to use the capital to meet business requirements and improve business efficiency

Next, analyze the increase or decrease of capital sources to assess the ability of enterprises to mobilize capital from different sources, financial self-assurance, independence as well as initiative in business of enterprises Liabilities are a part of capital for enterprises to conduct production and business, including credit capital

(short-term debts, long-term debts, other debts) and misappropriation items (accounts payable, expenses payable, other payables .) Fair use will bring high economic efficiency to enterprises In addition, equity capital is capital under the management and use of the enterprise Equity represents the strength and autonomy of the enterprise When evaluating capital sources, we usually use the following proportions:

Equity Ratio = Total Equity

Total Assets

Dept ratio = Total Dept

Total Assets The equity ratio is a financial metric that measures the amount of leverage used

by a company It uses investments in assets and the amount of equity to determine how well a company manages its debts and funds its asset requirements If it is greater than 0.5 and increases, the company have financially self-sustaining high, whereas if it is less than 0.5 and decreases, the company have financially self-sustaining is low

1.2.3.2 Income Statement analysis

The income statement focuses on the revenue, expenses, gains, and losses of a company during a particular period The data printed on the report provides general information about business methods, capital potential utilization, technical labor, management experience and whether those business activities are profitable or not

Through the data on the business results report, businesses can assess development trends over different periods When analyzing the income statement, it is necessary to consider the fluctuation of each indicator on the profit and loss in this mid-period with the previous period, comparing both absolute and relative numbers on each indicator Calculating and analyzing indicators reflecting the level of use of expenses and business results of the enterprise

1.2.4 Financial Statement analysis

When conducting business analysis, we must use the most common mathematical techniques, formulae, and indicators in order to accurately assess the business performance of organizations From the results received, we will get the most overview through groups of evaluation indicators

1.2.4.1 Capital Efficiency

19

The efficiency of the company's whole production and business processes is reflected in this collection of metrics It is designed to show how efficiently a company makes use of its available capital by looking at the net profit generated in relation to every dollar of capital utilized by the company

Efficiency of use of equity: Return on Capital Employed is a helpful indicator

of financial efficiency from the point of view of operations since it quantifies profitability after taking into account the capital required to achieve that level of profitability, independent of the capital structure of the business Due to the fact that it employed earnings before interest and taxes, or the earnings from operations, it does not take into account the debt vs equity source of capital

Return on Capital Employed = Earrings Before Interest And tax

Capital Employed

1.2.4.2 Asset Efficiency

The efficiency of asset use has a direct impact on production and business efficiency, good management of assets will contribute to cost savings and increase the competitiveness of enterprises in the market To do this, businesses need to determine the exact need for assets needed for business operations, then plan to seek funding, procurement or reserve assets

Assets turnover ratio = Net Sale

Average Total Assets Total asset turnover is used to evaluate the efficiency of using assets of the business It allows us to calculate the amount of revenue that is produced for every dollar of assets The more this value is larger, the more effectively assets are used in business and industrial processes To determine if a business's use of its assets is indeed effective or not, this coefficient must be compared to the industry's average asset turnover

Long-term asset efficiency:

Fixed asset turnover ratio = Net Sale

Average Fixed Assets Fixed asset turnover helps to evaluate the efficiency of using fixed assets, and also indicates the characteristics of business lines and investment characteristics The

indicator indicates how many rounds of net revenue the enterprise rotates during the operating period of the enterprise, or in other words, how much net revenue the enterprise earns as a co-invested in fixed assets

Return on long-term assets = Profit after tax

Average Long−term Assets This indicator shows how much revenue a dollar of long-term assets generated

in the period The larger this indicator, the higher the efficiency of long-term asset use However, it is necessary to improve the scale of outputs, rational use and savings in asset structure in order to improve the efficiency of long-term asset use of enterprises

Short-term asset efficiency:

For any business, the number one priority is to make a profit, while also paying attention to a vital factor is the ability to pay debt, especially short-term debt Although the enterprise is profitable, but can not have ability to pay short-term debts Over a long period of time or the ability to pay short-term debts is low, it is easy to lead to bankruptcy

Short-term asset turnover ratio = Net Sales

Average Short−term Assets The turnover of the current asset indicates how many rounds the current asset of the enterprise turned The longer the payback period for businesses with extensive business and manufacturing cycles Short-term asset turnover is quicker because businesses are constantly seeking for solutions to shorten their business cycles Increased consumption of goods results from a rise in short-term asset turnover, which raises firm profitability Utilizing short-term assets more effectively boosts output and organizational effectiveness for businesses

Return on Short-term assets = Profit After Tax

Average Short−term Assets This statistic shows how profitable short-term investments are It shows how much profit each dollar of short-term investments produced throughout the time period The enterprise's after-tax profit increases as the aim is raised The better the aim, in addition, the more it demonstrates that enterprises have exhausted the value of their short-term assets

21

Liquidity Analysis Ratios

Short-term liabilities are those that companies are responsible for paying within one year or a production and business cycle, including: short-term loans and debts, payable to sellers, payable to employees, taxes and accounts payable to the govement It is difficult to ignore the ability to pay off short-term debt when doing a solvency analysis since doing so ensures that the company's financial status is sound, supporting stability and promoting business and production activity

Current ratio = Current Assets

Current Liabilities This number shows if the company's overall holdings of short-term assets are needed to pay down its current liabilities The firm can pay off short-term obligations, and its financial situation is normal, if this ratio has a value of 1 or above This number

is more than 1, demonstrating the enterprise's plentiful solvency and helping to stabilize the economy as well as production and company operations, and vice versa If this number is excessively high, the company has invested excessively in liquid assets relative to demand, and this surplus will not result in increased earnings Businesses must deploy cash more wisely as a result, or the investment will be less effective

Quick ratio = Current Assets− Inventory

Current Liabilities This value shows if the remaining value of current assets after reducing the value of inventories (which are the assets with the lowest liquidity in current assets and the shortest period) will be enough to pay short-term duties A company that has a fast ratio greater than 1 demonstrates that its finances are sound and that debts may be paid off whenever necessary

Cash ratio = (Cash + Short−term Marketable Securities)

Current Liabilities

The liquidity of cash and cash equivalents in the context of short-term debt is shown by this ratio If this indicator has a high value, the enterprise shows signs of low capital efficiency because of the condensation of very liquid assets But if this target is too low and prolonged, enterprises are facing the risk of defaulting on debts and bankruptcy

Operational performance indicators

Inventory Turnover = Cost Of Goods Sold

Average Value Of Inventory

Inventory turnover shows how many days inventory turns into revenue The shorter the inventory turnover time, the more efficient the consumption of the enterprise's products and vice versa Inventory is a business line, so not every low inventory is good, high is bad A low inventory turnover ratio might indicate slow sales or overstocking (also known as surplus inventory) It may be a sign of poor marketing or an issue with a retail chain's merchandising plan

Days’ sales in inventory = 365

Inventory Turnover

This indication shows how many days it takes to turn around inventory This indication is as low as it can go, showing how quickly the company's items are being consumed and the opposite of that

Accounts Receivables Turnover = Net credit sales

Average Accounts ReceivableThis number shows how many times receivables turn in a given period If the large turnover proves that the business has earned money as soon as it consumes, do not let the sale occur to customers In other words, the company prevented the loss of capital However, if this target is too high, it proves that the business has been rigid in payment methods Long-term, this will have a negative impact on the company's capacity for consumption The average receivables are calculated using the following formula:

Accounts Receivables = sum of starting and ending accounts receivable over a time period

2

Revenue from sales and provision of services is determined by the total sales revenue in the period minus (-) the amount immediately collected (including cash and bank deposits) when consumed during the period

Accounts Receivables TurnoverThis number shows how many days it will take for receivables to be collected from the moment they become due during the reporting period The firm is far less

23

likely to experience capital theft the faster the turnover of receivables is, and the opposite is true

1.2.4.3 Profitability Ratios

Return on Assets (ROA)

Profitability is determined in relation to expenses and costs It is compared to assets to determine how successfully a business uses assets to create sales and profits The value of sales revenue remaining after all costs, expenditures, and taxes is referred

to as net profit or net income when the term "return" is used in the ROA metric Net income divided by total assets is known as ROA

The bigger the sales and potential profits a firm may produce, the more assets it has accumulated With economies of scale assisting in cost reduction and margin improvement, returns may rise faster than assets, therefore raising ROA

Return on Assets = Net Income

Total Assets × 100

This is an important indicator to evaluate the profitability of an enterprise's invested capital, showing whether the enterprise is managing assets, distributing and doing business effectively The higher the ROA, the better the efficiency of using assets, the high profitability of assets, is a factor that helps managers invest in breadth such as building factories, buying machinery and equipment for production and business

Return on Equity (ROE)

Return after tax on equity (ROE) is a measure of a company's annual profit divided by the value of equity, expressed as a ratio, reflecting how much profit is earned for one hundred dong of equity invested, is determined by the formula:

Average shareholders’ Equity × 100

The ROE ratio represents a business's ability to generate a net return on capital, measuring the amount of profit generated from a shareholder's capital A sustainable and growing ROE over time means that the company creates good shareholder value

because it knows how to reinvest effective retained profits to increase productivity and net profit Conversely, a declining ROE indicates how management makes poor decisions about reinvesting capital in inefficient assets With net income in the digital element, ROE looks at the company's bottom line to assess overall profitability for company owners and investors Shareholders are the final element in the order of the company's capital structure, and the income returned to them is a measure of residual profit after fulfilling mandatory obligations and reinvesting the business A high ROE means that the company is successful in generating internal profits However, a company can rely heavily on debt to generate greater net profits and drive higher ROE

In addition, ROE can exclude intangible assets from equity Intangible assets are monetary items such as goodwill, trademarks, copyrights, and patents This can create miscalculations and difficulties when compared to other companies that already include intangible assets Some industries tend to achieve higher ROE than others, so ROE is only effective when comparing peers Cyclical industries (such as industries, materials, information technology, etc.) have a higher ROE than defensive sectors (such as consumer goods, community utilities, pharmaceuticals, etc.) due to various risk factors A riskier company needs a higher cost of capital and equity

non-Return On Sales (ROS)

The rate of return on sales is used to describe a company's ability to make a profit and consider possible future scenarios This ratio is widely used in building financial models and valuing the company, showing in the hundred dong of revenue that the enterprise makes in the period how much profit there is

Return on Sales = Operating Profit

Net Sale Revenue

If the ROS is positive, then the business company is profitable, the larger the ROS, the greater the profit

If the ROS is negative, it is a sign that costs are getting out of control (rising input material prices, increased selling costs or business management costs ), or the company is having to offer discounts to sell products or services

A decline in income but careful cost management might enhance the company's profitability An increase in revenue can be regarded as a loss if it also raises costs, and

25

the other way around A high ROS suggests that the business is effectively managing expenses or charging significantly more for its goods or services than it is spending Therefore, a high index shows competent management, the minimum expenses, and a fair pricing strategy A low ROS, on the other hand, suggests that the business has bad pricing strategies and uses expenses inefficiently Since ROS ratios varies between sectors, this statistic can only be used to compare businesses in the same sector Additionally, this ratio may be deceptive in terms of cash flow and return on sales Similar to how a firm with a high ROS does not inevitably have a lot of cash flow, one with a low ROE is not always the result of bad company performance The firm with greater financial debt may have a lower ROS as a result of higher interest costs and lower after-tax earnings if it has a larger leverage ratio Additionally, managers can enhance short-term earnings by lowering long-term costs, which raises the company's ROS

1.2.5 The cash flow statement (CFS)

The cash flow statement (CFS), is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company The CFS measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses

As one of the three main financial statements, the CFS complements the balance sheet and the income statement In this article, we’ll show you how the CFS is structured and how you can use it when analyzing a company

The cash flow statement paints a picture as to how a company’s operations are running, where its money comes from, and how money is being spent Also known as the statement of cash flows, the CFS helps its creditors determine how much cash is available (referred to as liquidity) for the company to fund its operating expenses and pay down its debts The CFS is equally important to investors because it tells them whether a company is on solid financial ground As such, they can use the statement to make better, more informed decisions about their investments

1.3 Methods for analyzing business performance

1.3.1 Comparison method

This is the main method in analyzing business activities to identify trends, volatility levels of analytical indicators In order to carry out, it is necessary to determine data for comparison, determine comparative conditions, comparative goals

Identify metrics for comparison:

+ When studying the fluctuation rate, the growth rate of the indicator, the data for comparison are the indicators of previous periods

+ When studying the pace of business tasks in each period of the year, often compared with the same period last year

+ When researching the ability to meet the needs of the market, it can be compared in advance with the contract level

Conditions for comparison with economic indicators:

+ Must agree on the economic content of the indicator

+ Ensure consistency in methods of calculating indicators

+ Ensure consistency in units of calculation, criteria in both quantity, time and value

Comparative objectives in business analytics

+ Determine the absolute volatility level and relative volatility level and fluctuation trend of analytical indicators

+ Absolute volatility: determined on the basis of comparing the value of the indicator between two periods: the analytical period and the original period

+ Relative volatility: is the result of comparing the actual number with the original number adjusted according to a coefficient of the relevant indicator in the direction of the scale of the analytical indicator

The thesis will combine many comparison methods to clarify outstanding financial indicators as well as shortcomings of the business

Superlative comparison

Absolute number is the degree of expression of the scale and volume of value about a certain economic indicator in a specific time and place Units of calculation are

Compare average figures

The average number is a number that expresses the degree of quantity of units

in the following way: by any difference in values between those units, in order to generally reflect the characteristics of each nest, part or whole of phenomena of the same nature Through the average comparison, we can assess the general situation, fluctuations in quantity and quality in the production and business process, assess the development trend of enterprises

1.3.2 Elimination method

Numerous things can have an impact on a sign of the economy For example: The volume of sales and the cost of items have at least direct impact on a company's sales aim The exclude method helps businesses determine the degree of influence of factors on analytical criteria by placing factors in hypothetical conditions and when determining the influence of which factors, the influence of other factors is excluded

To study the influence of one good cause we must exclude the influence of other factors To do so, it can only rely directly on the volatility of each factor or rely on continuous substitution

The continuous substitution method determines the influence of factors through successive and successive substitutions of factors to determine the index of indicators when that factor changes Characteristics and conditions of continuous replacement:

- Sorting influencing factors and determining their influence on analytical criteria must be in order from quantitative to qualitative factors

- Substituting the value of each influencing factor How many factors are replaced The value of the substitution factor remains the same for the analysis period until the final replacement

- Summarize the influence of factors and compare with absolute fluctuations of indicators (study period vs original period)

The general model of continuous substitution can be generalized as follows:

If f(x,y,z) = xyz so f(x0,y0,z0 ) = x0y0z0

And f(x) = f(x1,y0,z0) -f(x0,y0,z0 ) = x1y0z0 -x0y0z0

f(y) = f(x1,y1,z0) -f(x1,y0,z0) = x1y1z0 -x1y0z0

f(z) = f(x1,y1,z1) -f(x1,y1,z0) = x1y1z0 -x1y1z0

The conditions applicable to this method are: The factors are related to each other in the form of products The arrangement and determination of the influence of factors should follow the law of quantum

- The application of information technology allows the accumulation of data and accelerates the process of calculating a series of ratios

- This method helps analysts effectively exploit data and systematically analyze ratios in continuous time series or in stages

The method of ratio analysis is based on the normative meaning of ratios of financial quantities in financial relations In principle, this method requires the determination of thresholds and norms to comment and evaluate the financial position

of the enterprise on the basis of comparing the enterprise ratios with the reference ratio value

1.3.4 The DuPont analysis

The DuPont analysis is a framework for analyzing fundamental performance popularized by the DuPont Corporation DuPont analysis is a useful technique used to

29

decompose the different drivers of return on equity (ROE) The decomposition of ROE allows investors to focus on the key metrics of financial performance individually to identify strengths and weaknesses There are two versions of the tool—one which accounts for decomposition in three steps while the other does so in five steps

The Dupont analysis does not stop at analyzing financial phenomena but also approaches and indicates the causes of such phenomena through the analysis of a primary ratio of secondary ratios The secondary ratio then becomes the primary ratio for a subsequent analysis Just like that we will have a sequence of causal ratios together that the change of the latter is what causes the change of the former Through this, we can determine which factors are the cause of fluctuations of the indicator reflected in the primary rate

The Dupont model is a simple but extremely effective tool that allows businesses to see an overview of the basic issues of the business to make the right decisions This method helps analysts identify the relationship between cost performance indicators and capital efficiency indicators, thereby assessing the impact

of factors on profitability and equity

The essence of ROA is to measure the ability to make an after-tax profit on a dollar of assets It demonstrates the effectiveness of the process of organizing and managing business activities of the enterprise The higher the target, the more it demonstrates business efficiency and increased profitability Use the Dupont model to see the impact of factors on this indicator

ROA = Profit After Tax

Total assets = Profit after tax

Net Income × Asset Turnover

Total Assets = Profit magin × Assets turnover ratio

Thus, to increase ROA, it is necessary to increase the above 2 factors, namely:

- Promote asset turnover through increasing income from business activities, rational use of savings in asset structure

-Increase income from business activities, sales services while improving service quality to increase profits

ROE is analyzed similarly to ROA The Dupont model can represent ROE in 2 forms, including the basic form and the extended form Depending on the purpose of analysis, businesses will use the appropriate form for themselves

= ROA × Financial Leverage

From Dupont-based analysis, ROE can be increased through increasing ROA and financial leverage However, financial leverage does not always increase ROE This positive effect only occurs when the cost of debt is less than ROA

The essence of ROE is constituted by 3 factors Therefore, to increase production and business efficiency, enterprises have 3 options: increase 1 of the above

When applying the Dupont model, businesses should compare ROE over the years Then consider the growth or decline of this index stemming from the cause into the above 3 causes to make judgments and predict the trend of ROE in the following years

➢ Extended form:

ROE = Net Profit Margin × Impact from other profits × Effects of taxation × Asset turnover × Finance Leverage

31

The extended form is similar to the basic form, but businesses must look more deeply at the structure of net profit margins by looking at the impact of profits other than those coming from the main business of the enterprise and the effect from taxes

Looking at this indicator, businesses will assess where the increase in profit margin comes from If it mainly comes from other profits such as liquidating assets or businesses receiving temporary tax exemptions, businesses should pay attention to reassessing the real performance of the business

The Dupont analysis has a great advantage over the ratio analysis method and the comparative method in that the Dupont method does not stop at analyzing financial phenomena but also approaches and indicates the causes of those phenomena through the analysis of a primary ratio of secondary ratios The secondary ratio then becomes the primary ratio for a follow-up analysis Just like that we will have a sequence of causal ratios together that the change of the latter is what causes the change of the former Through this, we can determine which factors are the cause of fluctuations of the indicator reflected in the primary rate

in demand for goods leads to a decrease in profits, a decrease in interest rates As a result, low interest costs lower product costs, high inflation leads to high raw material costs while insignificant increases in selling prices, causing businesses to reduce profits The exchange rate decreases, the cost of buying imported materials decreases, production costs decrease, selling prices decrease, demand increases, making profits increase

1.4.1.2 Politics and law

Politics and law are the foundation for economic development as well as the legal basis for enterprises to conduct production and business activities in the market Stable politics will bring health in society, economic stability, and create a smooth corridor for businesses to develop Therefore, politics has a great impact on the business performance of enterprises The legal environment includes laws, sub-legal documents, legal norms creating a legal corridor for businesses All activities

of the enterprise must comply with the provisions of law Therefore, the law can inhibit or encourage the growth of businesses, so it affects the business performance of enterprises Politics and law are the foundation for economic development as well as the legal basis for enterprises to conduct production and business activities in the market Stable politics will bring health in society, economic stability, and create a smooth corridor for businesses to develop Therefore, politics has a great impact on the business performance of enterprises The legal environment includes laws, sub-legal documents, legal norms creating a legal corridor for businesses All activities

of the enterprise must comply with the provisions of law Therefore, the law can inhibit or encourage the growth of businesses, so it affects the business performance of enterprises

33

1.4.1.3 Cultural and social environment

These factors affect the business environment slowly, but once they do, they leave a bold mark Customs, lifestyles, cultural levels indirectly impact business performance through customers and teaching quality In the conditions of opening up and integrating the economy, conflicts of interests, culture, religion and belief will occur If the business does not care, it may fail in business operations

1.4.1.4 Related industries

Related industries, directly affecting production and business activities of enterprises such as raw materials, transportation, banking – finance, have a reciprocal impact on the business activities of the enterprise The development of these industries will contribute to creating favorable conditions to support production and business activities of enterprises

1.4.2 Subjective factors

1.4.2.1 Business strategy

The strategy has a specific impact on the performance of the business A correct strategy will produce products in accordance with market needs, in accordance with the capacity of enterprises, goods produced are well consumed, and profits are high If it is not right or suitable, the products produced will not be bought by anyone, the goods will not be consumed, they will not be able to pay wages for labor, employees will quit their jobs, businesses will not have money to pay the bank

1.4.2.2 Organization of the enterprise apparatus

Enterprises organize and arrange the operating apparatus effectively, do not overlap between departments, departments coordinate smoothly will increase the operational efficiency of the enterprise Arranging and dividing labor in accordance with the capacity and preferences of each employee will stimulate creativity and stimulate them to work better

1.4.2.3 Marketing activities

Marketing activities will help target customers know about the business, remember and register for its classes The effectiveness of good marketing activities