Finance analysis of vinamilk from 2012 to 2014

Finance analysis of Vinamilk from 2012 to 2014 1. Liquidity ratio analysis of Vinamilk from 2012 to 2014 2. Financial structure ratioes ananlysis of Vinamilk between 2012 to 2014 3. The operational effectiveness ratio analysis of Vinamilk from 2012 to 2014 4. The profitability ratio analysis of Vinamilk between 2012 to 2014 5. The conclusion about the financial situation of Vinamilk from 2012 to 2014

Finance analysis of Vinamilk from 2012 to 2014

( Form the annual reporting of Vinamilk from 2012 to 2014 :

https://www.vinamilk.com.vn/vi/bao-cao-thuong-nien )

Business activities of Vinamilk in 2012 to 2014 had certain positive effects when the economic situation is having a lot of difficulties

1 Liquidity ratioes analysis of Vinamilk from 2012 to 2014

 The table of general ratio analysis ( unit : billions of VND)

Current and

long-term

liabilities

General

liquidity ratio

 The graph of general liquidity ratio of Vinamilk

4,3

4,4

4,5

4,6

4,7

4,8

general liquidity ratio

From the table and graph, we can see that the general liquidity ratioes were on the decrease from 2012 to 2014 In particular, the ratio declined by 0,4% overall from 4,7 in 2012 to 4,3 in 2013,

2014 Althought total assests has increased over years from 19.689 billion in 2012 to 22.875 billion in 2013 and 25.770 billion in

2014, but at a rate lower than the growth rate of short-term debts The general liquidity ratioes of Vinamilk decreased but generally this indicator remains relatively high levels It indicates that the enterprise has sufficient liquidity

 The table of short-term liquidity ratio analysis : (unit : billions of VND)

Short-term

assets

Current

liabilities

Short- term

liquidity ratio

 The graph of short-term liquidity ratio of Vinamilk

2,55

2,6

2,65

2,7

2,75

2,8

2,85

2011,5 2012 2012,5 2013 2013,5 2014 2014,5

short-term liquidity ratio

The table analysis and gragh shows the short-term liquidity ratioes over the years are uneven From 2012 to 2013, the short-term liquidity ratio decreased by 0,1% from 2,7 in 2012 to 2,6 in 2013 This creates a

disadvantage for the company, current assets increased from 11.111 billion

in 2012 to 13.019 billion in 2013 Short-term asset values are great due to much inventory ratioes and current debts increase By 2014, short-term liquidity ratioes were much improved and it increased 0,2% from 2,6 in

2013 to 2,8 in 2014, because short-term liabilities increased more slowly than in 2013 This shows that Vinamilk has a high financial ability and it can make sure and respond short-term debts

 The table of quick liquidity ratio analysis ( unit : billions of VND)

Current

assets –

inventory

asstes

11.111- 3.472

=7.639

13.019-3.217

=9.802

15.522-3.620

=11.902

Short-term

liabilities

Quick

liquidity

ratio

 The graph of quick liquidity ratio of Vinamilk

0 0,5 1 1,5 2 2,5

2011,5 2012 2012,5 2013 2013,5 2014 2014,5

quick liquidity ratio

From the analysis of table and chart, wecan see that the quick liquidity ratio

of the company has steadily increased over the years This ratio increased to 0,2% 1,8 in 2012 to 2,0 in 2013 and from 2013 to 2,2 in 2014 This shows that the company has the ability to pay short-term liabilites at a high level when it don’t need sell inventory assets

 The table of liquidity ratioes of Vinamilk from 2012 to 2014

General liquidity ratio 4,7 4,3 4,3

Short-term liquidity

ratio

 The graph of liquidity ratioes of Vinamilk from 2012 to 2014

0 1 2 3 4 5

2012 2013 2014

general liquidity ratio short-term liquidity ratio quick liquidity ratio

 The liquidity ability of Vinamilk was always guaranteed at high level This shows the financial capacity of the company and this creates a large advantage in mobilizing capital for business

activities, as well as increased credibility with suppliers

2 Financial structure ratioes ananlysis of Vinamilk between 2012 to

2014

 The table of debts / total assets ratio analysis :

Debts/ total assets ratio

Throught the analysis, we can see that in 2012, total assets of the company with 21% financed by debts In 2013, 2014, this ratio

had risen at 23%, it means that total assets of the company had

23% from borrowing The increase of this ratio in 2013,2014 was not too high, it shows that the enterprise has gradually known to

exploit the financial leverlage, i.e, how to raise capital by

borrowers

 The table of debts/ total owners’equity ratio analysis :

Debts/owners’equity 27% 30% 30%

The debts/ owners’equity increased by 3% from 2012 to 2014 This shows the company depended on owners’ equity more than forms of debt, but the ratio is not too high, Vinamilk has known exploit benefits of debt and tax saving to business

`3 The operational effectiveness ratio analysis of Vinamilk from

2012 to 2014

 The table of the operational effectiveness ratio of Vinamilk

Inventory

turnover

Receiveable

turnover

Working capital

turnover

Asset turnover

ratio

- From the analysis of the table, we can see that the inventory turnover steadily increased over the years, particularly it

increased by 0,7% from 5,2 in 2012 to 5,9 in 2013 and from

2013 to 2014, it also increased by 0,7% The increase of the ratio shows fast sales of the company and inventories was not much It means the company is less risk than when inventory items in the financial statement decrease over the years, from 3.472 billion in 2012 to 3.217 billion in 2013 By 2014,

inventories increased at 3.620 billion but the growth rate was smaller than the growth rate of revenue, so the inventory

turnover still increased

- The receiveable turnover fluctuated over the years From 2012 to

2013, the receiveable turnover increased by 0,4% from 12,0 to 12,4 At the moment, the ratio increase demonstrates that the speed of rapid debt collection of Vinamilk and the high ability

to convert debts into cash This helps the company improves cash flow and creates the initiative in the funding of working capital financing in production By 2014, the ratio declined by 1,1 % to 11,3 The decline was not too big but it shows that the amount of money of the company was appropriated and it reduced the initiative in the funding of working capital

financing in production If the figure is falling, the company may have to borrow banks to finance the working capital

- Working capital turnover in 2012 and 2013 remained at 2,6 It shows that the company steadily maintained production

activities, business By 2014, working capital decreased at 2,5

It shows that the rotation speed reduction of working capital and the company used inefficient working capital

- In 2012 and 2013, the asset turnover does not change at 1,5 It means that with each a property , the company created 1,5 revenue By 2014, the ratio reduced to 1,4 shows the production and business efficiency was down, but not too much

4 The profitability ratio analysis of Vinamilk between 2012 to 2014

 The table of profitability ratioes of Vinamilk from 2012 to 2014

 The chart of profitability ratioes of Vinamilk from 2012 to 2014

0

10

20

30

40

50

ROA ROE

Thourgh the table and chart of profitability ratioes analysis, we can see that ROA, ROE was reducing gradually over the years

Specifically : ROA decreased from 33,0% in 2012 to 30,7% and 24,9% in 2013, 2014 respectively Besides, ROE also reduced from 41,6% in 2014 to 39,6 in 2013 and 32,6% in 2014 The

declining of ROA, ROE is due to the impact of the rise in total assets and owners’ equity ( mainly in the from of additional

issuance of stock to the market) of Vinamilk in recent years We compare with the average industry of ROA, ROE

(http://ivt.ssi.com.vn/CorporateSnapshot.aspx?Ticket=VNM ) are 27,23% and 20,47% respectively We can see that ROE in over

the years were greater than the average ratio so much This created

a great revenue for Vinamilk when it used the effective equity Besides, ROA of the years was much higher than the average industry , the figures shows a great profit of Vinamilk

5 The conclusion about the financial situation of Vinamilk from 2012 to 2014

 The financial situation of Vinamilk between 2012 to 2014 was quite stable and the company had a strong financial potential

- Vinamilk know how to exploit financial leverage by the higher debt ratio increase over the years That increased the business efficiency The company should use the tools of interest to reduce tax burdens

- All of liquidity ratioes were at high and >1, so the company can

be assured about its liquidity and it has a lot of creadibility with suppliers

- With financial activities, Vinamilk know how to control better inventories over the years by cost reductions, reducing damage

to the goods Cash flow to fund working capital reduced and it was more occupied by receiveable turnover was uneven and in

2014, it decreased Working capital turnover and asset turnover ratio decreased, so the company need use working capital and assets more effectively

- Profits of Vinamilk decreased form 2012 to 2014 but the

profitability ratioes remained much higher than the average industry This reflects the company has good financial

management policies, but Vinamilk need to adjust the

increase of assets and equity logically