Phân tích tình hình tài chính công ty cổ phần sữa việt nam vinamilk e

PHÂN TÍCH TÌNH HÌNH TÀI CHÍNH CƠNG TY CỔ PHẦN SỮA VIỆT NAM VINAMILK CONTENT INTRODUCTION OVERVIEW OF THE CORPORATION 1.1 The process of foundation and development: 1.2 Main business fields of the corporation: 1.3 Production technology of several products .8 1.4 Management Structure: 10 ANALYSE FINANCIAL SITUATION OF THE CORPORATE: 13 2.2 Analyse financial effieciency: 15 2.2.1 Profitability indexes: 15 2.2.2 Indicators of asset management capacities: 17 2.3 Solvency indicators: .18 2.3.1 Solvency indicators: 19 2.3.2 Indicators of loan management: .19 2.4 Combined analysis of effects and risks: 20 2.4.1 First Dupont equation: Return on asset (ROA) 20 2.4.2 Second Dupont equation: Return on equity (ROE) 20 2.4.3 Dupont Map .21 2.4.4 Leverages: 22 INTRODUCTION In recent years, world economy in general and Vietnam’s in particular have been facing up with many instable factors The non-stop increase of materials and fuels prices continues to lead to high inflation The domestic economy has experienced a difficult period in 2012 Thousands of businesses go bankrupt, the banking system is in crisis, banking interests change constantly The weakening of the whole economy affects to businesses and workers Besides, Vietnamese enterprises are facing with increasingly fierce competition coming from foreign firms who have advantages of capitals, management techniques and scientific technologies In this context, businesses which have improper strategies, weak operational capacity and weak financial capacity will be left behind or go bankruptcy Corporate financial analysis is always necessary when it indicates the health of the business and help to regulate resources properly Not only owners’ business but also investors need financial analysis so that they can avoid unexpected risks Vinamilk is a leading corporation in producing milk and dairy products Up to now, Vinamilk accounts for about 39% national market share The company now has over 240 distributors and a nationwide system with more than 140,000 points of sale Vinamilk products are sold in all supermarket system all over the nation Our group selects Vinamilk corporation to analyse 1 OVERVIEW OF THE CORPORATION 1.1 The process of foundation and development: International transaction name: Vietnam Diary Products Joint Stock Company Headquarters: 10, Tan Trao Street, Tan Phu Ward, No District, Ho Chi Minh city Structure: office and 17 subsidiaries Personnel: 4.500 people Main function: Producing milk and Diary products VINAMILK is the biggest milk producer and provider in Vietnam According to Euromonitor, VINAMILK accounts for 39% market of soft drinks, milk, yoghurt, fresh milk, condensed milk, soy milk and fruit juice The company has built an extensive network in Vietnam and had a strong brand In 2011, Vinamilk is one of the most powerful brands in Vietnam recognized by the Ministry of Industry and Trade From 2005 to the present, the products of company are always on the list of "high-quality Vietnamese goods" voted by consumers From 1976 to 2005 : In 1976: The company is found under the name of Southern Coffee-Dairy company, a subsidiary of the General Food Directorate In 1982: The management of the company is transferred to the Ministry of Food Industry and the company is renamed United Enterprises of Milk Coffee Cookies and Candies I In 3/1992, The United Enterprises of Milk Coffee Cookies and Candies I is formally renamed Vietnam Diary Company and comes under the direct management of the Ministry of Light Industry The company starts focusing on the manufacturing and processing milk and dairy products In 1994, Vietnam Diary Company (VINAMILK) builds one more dairy factory in Hanoi to cater the market in the northern region, increasing the number of factories to 4: Thong Nhat Diary Factory Truong Tho Diary Factory Dielac Diary Factory Hanoi Dairy Factory In 11/2003, the company is converted into joint stock company named Vietnam Diary Products Joint Stock Company (VINAMILK) From 2005 to Present: Converting into a joint-stock company has led to excellent results in doing business Ordinance targets of the State exceed in comparison with previous year before equitization process contributes significantly to the sublimation of the economy: total revenue increases by 188%; net profit after tax goes up 5.2 times; Profit after tax / equity ratio increases by 75%; payments to the State budget increases 4.6 times; billions are invested to modernize machines and technology; exports reach 444.7 million USD; annual average production reaches over 560 thousand tons; fresh milk collection has increased annually from 10 - 17% on volume and value; total equity increases annually and reaches over 11 trillion in 2012; average income of workers increases by 68% The factories always adhere to the production principle which bases on the needs of market to adjust plans properly VINAMILK also tries to implement strict management, improve product quality, diversify product categories, give priorities to products which have competitive advantages, high values and market stabilities Besides, the company practices saving on all stages of production process, especially on fuels and materials On doing business: the company implement a strategy to dominate 75% national market share; expanding markets in which domestic market takes central role; Locating outlets in all over the country with the network of 183 distributors, 94,000 points of sales in 64/64 provinces and cities Marketing innovation and effective marketing activities are researched carefully The company actively searches for foreign relations, looking for new exporting markets and maintaining traditional markets at the same time The company has formed domestic raw material areas by building dairy farms: Tuyen Quang dairy farms (2007); Nghe An dairy Farm (2009); Thanh Hoa dairy farms (2010) ; Binh Dinh dairy farm (2010); Lam Dong dairy farm (2011); with 5900 cows in total Support and encourage farmers by purchasing milk products with high price (higher than the world price), accepting lower profits from processing stage (15 - 25 billion every year) to offset high purchasing prices of milk Moreover, VINAMILK provides technical supports of preliminary processing, storage and preservation of raw milk to farmers in 2005, the company purchases 92,500 tonnes of milk; years later (2010), the volume of milk purchased goes up to 127,000 tonnes (increases by 38%) 550,000 tons of milk which are worth over 2,000 billion are bought by company in years, an average annual increase of 10-20 % on volume and value, creating favourable for the increase of national dairy herd from 104,000 (2005) to over 130,000 (2010) The company strictly implement regulations on fire prevention, safety of production facilities and assets Effective implementation ISO and HACCP certification, building wastewater treatment system at all processing bases; coordinate with local authorities to improve the natural environment In 2008-2009 dairy factories: Thong Nhat, Truong Tho, Saigon are awarded as “Green Business” by the Ministry of Natural Resources and Environment for achievements in environmental protection The company has opened the gateway towards large potential markets of North America, the Middle East, Asia, America, Australia, Canada, France, Russia, Germany, Poland, Czech Republic, China , the Middle East, Asia, Laos and Cambodia By making use of equity and other capitals, the company can afford essential needs, especially on doing business programs effectively In years, the company has invested about 4,500 billion VND on modernizing machines and equipments, production technologies and building new processing factories and subsidiaries: Lam Son Diary Factory (12/2005); Vietnam Beverage Factory (2010), Can Tho subsidiary (1998); Hanoi Logistics Company (2010) At the same time, VINAMILK is promoting the construction of modern fully-automated Megacenter in the North (Tien Son) and in the South (Binh Duong), factories: Dielac Powdered Milk in Binh Duong and Da Nang Diary Factory these factories are expected to go into operation in late 2012 Many modern refined lines originating from advanced industrial countries like the U.S., Denmark, Italy, Germany, the Netherlands have been installed by leading experts 300 kinds of high quality products are launched afterwards Giving autonomy in production for membered factories to make full use of capacities is proving efficiency in new era Regarding human resources, the company has recruited more than 50 children of internal officials through the examination of dairy technology to build up future legacy forces More than 100 scientists, engineers are sent to acquire domestic short-term technologies; 12 people attend the Director training courses ; Over the years, the company participates actively and regularly in social activities as Thankfulness activities ; Taking care of 20 Vietnamese heroic Mothers in provinces of Quang Nam and Ben Tre; Poverty alleviation; Searching and supporting people in floodaffected areas, Contributing to the funds: For dear Truong Sa; Stone contribution to build Truong Sa; Poor Patient Support ,Victims of Agent Orange; Young talent, Rising Vietnam, Funds against children malnutrition ; Scholarship for children in flooded areas Grants 1.2 Main business fields of the corporation: Production and sales of cookies, soy milk, canned milk, powdered milk; providing technological foods, accessories, chemicals which support agricultural activities However, diary products are mainly manufactured 1.3 Production Technology of several products For the target of accelerating growth, the company applies new technologies, installs modern processing equipment, increases processing capacity and expands production facilities, develops local raw materials areas…In 5-years (from 2005 to 2010), total investment reaches 4.469 billion VND The investment has created high labor productivity and expanded production scale, which contribute to the increase of revenues and profits Work arrangement, innovation and development to improve business performance in Central Resolution 3, Course IX has been made clear and effective by the company: contributing trillions Dong to the State budget; dividends are guaranteed according to the Resolution of the annual General Meeting of shareholders, businessés are diversified Continue to implement centralized accounting model to improve conditions for modernizing of machinery and technology Establish health nutritional counseling centers across the country, visit and provide free milk for thousands of children, primary school children and malnourished Scientific and technological activities have always been regarded as key breakthrough In years of research, the company has launched over 30 new products, approved many initiatives to benefit the State hundreds of billions Dong, typical products as Dielac Alpha 1,2,3; 100% fresh dairy products… Modern facilities and and techniques are important factors contributing to the ensured quality of products Equipments and production technology imported from advanced countries such as Sweden, the U.S, Denmark, the Netherlands, France, Germany, Switzerland, help to ensure the quality and food safety 1.4 Management Structure: ORGANIZATIONAL STRUCTURE OF VIETNAM DIARY PRODUCTS JOINT STOCK COMPANY (VINAMILK) (Issued under Decision No 66/QD-CTS.NS/12 on 24/05/2012) Functions and duties of Department of Finance:  Functions: - Advisors for Board of Directors on executive management of financial economic and accounting activities in accordance with accounting law and regulations - Advisors for Board of Directors on the control of finance and accounting at subsidiaries - Promote financial mobilization and manage the use of financial resources mobilized  Duties - Account accurately, timely and completely transactions relating to assets and capitals of the Company in accordance with accounting law and regulations - Monitor and supervise the implementation of financial regulations other cost regulations which are applied in the Company - Setup, promote and balance financial plans properly in every period - Manage receivables and expenditures, purchases and sales of goods and services, make full and timely deductions for payments to the budget, tax liabilities and other obligations to the State under the law - Setup periodically financial statements and other reports relating to accounting activity and submit to General Manager - Disseminate and provide financial regulations of the Company to relevant departments as needed - Preserve and store accounting and financial documents, vouchers - Secure data and accounting records of the Company - Perform other duties assigned by General Director and Board of Directors  Rights: - Be involved in setting plans of revenues, expenses, production and personnel management - Propose General Manager to balance funds and assets of the company to get effective production, business and management - Control finance and accounting of subsidiaries - Rights to refuse unlawful payments under regulations of the company and the law - Be included in arranging, promoting and disciplining staff of management department and other related departments 2 ANALYSE FINANCIAL SITUATION OF THE CORPORATION: 2.1 Analyse financial situation through financial statements Analyse the balance sheet: BALANCE SHEET Unit: VND 2010 No ITEMS Beginning A SHORT-TERM ASSETS I Cash and cash equivalents II III IV V B II 2011 Short-term financial investments Receivables Inventories Other short-term assets LONG-TERM ASSETS Fixed assets Ending Beginning Ending 5.050.274.123.753 5.804.397.813.378 5.804.397.813.378 9.279.160.021.716 415.417.916.497 234.843.207.079 234.843.207.079 3.101.435.901.849 2.314.253.566.692 2.092.259.762.292 2.092.259.762.292 736.033.188.192 753.498.136.776 1.119.075.135.003 1.119.075.135.003 2.126.947.803.251 1.280.773.657.392 2.272.650.005.063 2.272.650.005.063 3.186.792.095.368 286.330.846.396 85.569.703.941 85.569.703.941 127.951.033.056 3.379.906.340.869 4.958.795.833.847 4.958.795.833.847 6.285.158.103.799 2.322.962.709.746 3.058.038.713.598 3.058.038.713.598 4.571.226.735.584 IV Long-term financial investment 801.180.628.831 1.668.519.454.895 1.668.519.454.895 1.550.368.535.378 V Other assets 255.763.002.292 232.237.665.354 232.237.665.354 163.562.832.837 TOTAL ASSETS 8.430.180.464.622 10.763.193.647.225 10.763.193.647.225 15.564.318.125.515 A LIABILITIES 1.967.829.451.949 2.806.246.599.680 2.806.246.599.680 3.152.169.943.075 I Short-term liabilities 1.711.593.056.787 2.646.542.781.874 2.646.542.781.874 2.993.592.789.307 II Long-term liabilities 256.236.395.162 159.703.817.806 159.703.817.806 158.577.153.768 B EQUITY TOTAL LIABILITIES AND EQUITY 6.462.351.012.673 7.956.947.094.545 7.956.947.094.545 12.412.148.182.440 8.430.180.464.622 10.763.193.694.225 10.763.193.694.225 15.564.318.125.515 Based on above balance sheet, we have figure of Asset/Capital Structure: From the balance sheet and the figure, it can be seen that main assets of company are short-term assets, accounting for about 60% total assets (2009: 5.050 trillion) and being in the range of 50-60% in both 2010 and 2011 (at the end of 2011: 9.279 billion) The structure reflects the characteristic of a food company which provides products of short-time limits (dairy products, etc.), the amount of current assets must change constantly In contrast to Asset structure, capital of company is mainly equity In 2009, equity is 6.462 billion, accounting for 76.65% total capital; then equity goes up to 7.956 billion, accounting for 73.9% in 2010 and to 12.412 billion in 2011, accounting for 79.74% of capital structure That capital structure allows the company to minimize financial risks and not be affected by interest However, it also indicates that the company does not use leverages well The business results between 2010 and 2012 illustrates that inefficiency; The increase of capital from 10.763 billion in 2010 to 15.564 billion in 2011 (an increase of 45%) only make profit increase by 570 billion (about 16% compared to 2010) 2010 Beginning Ending No 2011 Beginning Ending A Profitability indexes ROS 21,05% 20,75% 20,75% 18,22% BEP ROA ROE 28,47% 24,81% 33,03% 44,09% 37,47% 49,88% 32,15% 27,32% 35,31% 37,47% 31,65% 40,91% 2.2 Analyse financial effieciency: 2.2.1 Profitability indexes: a, ROS (Return of Sales): ROS shows net profit as a percentage of sales revenue ROS is 20,75% at the end of 2010, it means that 100 unit of revenue creates 20,75 unit of net profit In the end of 2012, ROS decreases to 18,22% It can be seen that revenue of 2011 increases 1.32 times more than that of 2010 but ROS still goes down, which results from bad management of costs of the company b, BEP (Basic Earning Power): BEP calculates how much profit the entire society gain when 100 Dong is invested to the company In 2010, BEP is 44.09% and in 2011 is 37.47% So, the performance of company in 2011 is less effective than in 2010 c, ROA (Return of Asset): ROA shows recovery rate of profit on total assets; It calculates how much profit owners gain for each 100 Dong of assets In 2011, ROA was 31.65% (meaning that 100 Dong assets generates 31.65 Dong for the owner), lower than in 2010 (37.47%) While Net Income rises only 1.15%, Total assets increases by 1.44%; especially short-term assets increases by 1.6% This is not good It shows that the company has used assets less efficiently than in 2010 In particular, the flow of cash is outstanding, debt collection is not good, less effective sales policies lead to more inventories d, ROE (return on equity): ROE shows how much profit owners gain for each 100 dong equity invested In 2010, ROE is 49.88%, but is only 40.91% in 2011 The data again shows that the cost management is becoming worse While total revenue increases only 1.32 times, the cost goes up by 1.37 times Thus, interest of shareholders is reduced 2.2.2 Indicators of asset management capacities: 2010 Beginning Ending No 2011 Beginning Ending B Indexes Total asset turnover 1,18 1,81 1,32 1,74 Inventory turnover 5,99 8,92 5,80 7,99 Debt collection period 29,80 19,45 33,72 25,56 Fixed asset turnover 2,71 4,16 3,08 4,07 Current asset turnover 2,08 3,19 2,30 3,03 The above table shows that the asset management of the company in 2011 is not effective, all indicators are lower compared to 2010 a, Inventory turnover: Inventory turnover in 2011 is 7.99 compared to 8.92 in 2010 The data shows that materials management policy of company is not proper, purchased materials and inventories are too large in comparison to the demand (on 31/12/2011, the amount of materials is 1.554 billion ; inventory of finished goods is 570 billion) Goods cannot be sold easily and be emulated by many substitutes The index also shows that market research activities of company need to be improved much more b, Debt collection period: In 2011, Debt collection period is 25.56 days and 19.45 days in 2010 The indicator shows that the company is facing very strong competition from other companies in 2011, sales becoming more difficult and the company is forced to apply wider sold-on-credit policy to retain customers and expand market c, Fixed asset turnover: The indicator in 2011 is 4.07 compared to 4.16 in 2010, showing that company has used fixed assets uneffectively It is because the company must reduce outputs to decrease inventories Additionally, newly investing on line production, equipments, factories (fixed assets in 2011 increases 1.5 times: the value of investment on construction, architecture: 189 billion; on new equipment: 848 billion) makes the operation be temporarily inefficient d, Current asset turnover: Current asset turnover of the company is 3.03 and 3.19 in 2011 and 2010 respectively The decrease of current asset turnover shows that the company has used current asset uneffectively It can be seen from the balance sheet that the current asset increases by 1.6 times while the revenue rises only by 1.32 times The amount of current asset is large because the company is maintaining very large sums of cash (3.101 billion) to prepare for the payment of short-term debts (2.993 billion) Moreover, inventories and receivables of company are too much compared to the same period last year (1.922billion) The data again emphasized the necessity to improve the management of materials, goods and sales policies of the company e, Total asset turnover: Total asset turnover is 1.74 in 2011 and is 1.81 in 2010 Total asset turnover shows that the asset management of company is uneffective in 2011 The amount of newly-invested fixed assets is large but still inefficient, the company faces up with many difficulties due to his own sales policies and production management 2.3 Solvency indexes: 2010 Beginning Ending STT 2011 Beginning Ending I Solvency Total Solvency ration 4,28 3,84 3,84 4,94 Current ration 2,95 2,19 2,19 3,10 Quick ratio 2,20 1,33 1,33 2,04 Immediate solvency ratio 0,24 0,09 0,09 1,04 All solvency indicators of 2011 are better than that of 2010 for the same period So, this is a good basis for company to continue to use loans for producing and doing business 2.3.1 Solvency indicators: a, Quick ration: Quick ratio increases from 1.33 in 2010 to 2.04 in 2011, meeting the requirement The ratio reflects the solvency of company, regardless of inventories (inventories can be sold easily for paying debts) However, quick ratio also depends on the recovery of receivables (2.126 billion) So, if the debt collection is not improved, it is very hard for company to gain trust of bankers b, Current ration: Increasing from 2.19 to 3.1, becoming better in 2011 c, Immediate solvency ratio: Increasing from 0.09 to 1,04, being good indicator The company is maintaining huge amounts of cash (3.101b/15.564b, 20% total assets) to prepare for the payment of short-term loans (2.993 billion) 2.3.2 Indicators of loan management: a, Debt ratio: On 31/12/2011, debt ratio is 20% compared with 26% in 2010 The reason is that company has increased the rate of equity in capital structure by 1.56 times compared to the beginning of the year (12.412 billion) The increase of equity is based on issuing additional 2.013 billion shares and the listed price of these shares is higher than the real value (Shareholders’ equity surplus: 1,276 billion); Besides, undistributed profits of company also increases to 2217 billion Dong b, Loan solvency This indicator shows how much Earnings before interest and tax EBIT is used to vouched for unit of loan In 2011, this indicator is 355, just a half for the same period in 2010 However, the indicator is high enough to continue to get loans from banks and credit institutions 2.4 Combined analysis of effects and risks: 2.4.1 First Dupont equation: Return on asset (ROA) Unit:billion VND ROA = Net Income / Average total asset = (Net Income/Revenue) x (Revenue/Average total asset) = ROS x Total asset turnover + Revenue = 21821,4 + Net Income = 4.166,6 + Average total asset = (Total asset at the beginning + Total asset at the ending)/2 = (15.564,3+10.754,3)/2 = 13.159,3 => ROA = 4.166,6 / 13.159,3 Or ROA = (4.166,6 /21821,4 ) x (21821,4 /13.159,3 ) = 19,09 x 1,655 = 31,6 (%) This indicator indicates how much profit owners gain when every 100 unit of capital is invested in the company In this case, every 100 unit invested in VINAMILK creates 31.6 unit of profit to owners If the efficiency of capital mobilization and investment is relatively good, ROA will be higher than the Industry Average There are ways to make ROA increase: Firstly, increases net income through reducing costs in order to increase ROS Secondly, increases Total asset turnover by saving assets and increasing sales 2.4.2 Second Dupont equation: Return on equity (ROE) ROE = Net Income / Average owner’s equity = (Net Income/Revenue) x (Revenue/Average total Asset) x (Average total asset/Average owner’s equity) = ROS x Total asset turnover x (Average total asset/Average equity) + Net Income = 4.166,6 + Average Equity = (Equity at the beginning + Equity at the ending)/2 = ( 12.412,1+7.950,9)/2 = 10.181,5 => ROE = 4.166,6 / 10.181,5 = 40,9% Or ROE = (4.166,6 /21821,4 ) x (21821,4 /13.159,3 ) x (13.159,3/10.181,5) = 19,09 x 1,655 x 1,294 = 40,9 ( %) This indicator reflects the profitability of Equity ROE of company is higher than that of Industry Average, showing that profitabilitiy of Equity is high and the efficiency of investment is relatively good The increase of ROE relies on ROA, ROS, Total asset and Equity 2.4.3 Dupont Map DUPONT MAP Return on Equity ROE: 40,9 % Return on asset, ROA: 31,6% Multiply Total asset/ Equity : 1,294 with Marginal profit: 19,09 % Multiply with Net Income: 4166,6 Revenue 21821,4 Divide Revenue 21821,4 Minus Other Depre costs -ciation 1246,3 + 361,3 Revenue 21821,4 Total cost 17654,8 Fixed asset 5617,5 Loans 15281,3 + Turn of total asset: 1,655 Tax 765,9 + Divide Plus Total asset 13.159,3 Current asset 7541,8 Cash&other Receivables Inventories assets 1623 2730 1668& + + 1520,8 Unit: Billion VND 2.4.4 Leverages: Unit: Billion VND a) Degree of operating leverage (DOL) DOL = (S-VC)/ (S-VC-F) ( S: Revenue, F: Fixed cost, VC: Variable cost) Revenue = 21821,4 ; Fixed cost = 361,3 ; Variable cost = 17293,5 => DOL = (21821,4 - 17293,5 ) / (21821,4 - 17293,5 - 361,3 ) = 1,09 b) Degree of financial leverage (DFL) DFL = EBIT / (EBIT – I) , ( I: interest EBIT: Earnings before interest and tax) - Interest = 332 - EBIT = (Net income + Interest + Tax) = 4166,6 + 332 + 765,9 = 5264,5 Thay số: DFL = 5264,5 /(5264,5 – 332) = 1,07 c) Degree of total leverage (DTL) DTL = (S-VC)/ (S-VC-F-I) => DTL = (21821,4 - 17293,5 ) / (21821,4 - 17293,5 - 361,3 -332) = 4527,9/ 3834,6 = 1,18 GENERAL ASSESSMENT AND DIRECTION TO IMPROVE THE FINANCIAL 3.1 Reviews, public comment on the financial situation of enterprises Vinamilk is a business with strong brands and sustainable development Financial situation of management focus, select how transparent reporting Done businesses still rely on many loans and not exploit all of its loans especially in the time of the current interest rate 20% / year Corporate profits accrue mainly to the business that the company healthy activities, focusing on competitive advantage in a focused way Ability to manage operations of Vinamilk be transparent, clear and is reflected in the financial statements, notes to financial statements each year Control Board is always active and under the control of the Board Asset management indicators such as inventory management, debt collection period, fixed asset turnover and mobility are very positive change in the direction that the company is on track and improve their ability to management The profitability indicators have a high threshold and give confidence to investors and shareholders 3.2 Direction to improve the financial situation of enterprises Identify target investment and development in the near future (3 years) to determine the needs of capital and optimal capital structure Need to reduce borrowing costs, reduces the proportion of loans to low to ensure the safety of the enterprises in the context of the market is very volatile and unstable Continue to improve asset management, reduce public debt recovery, increase inventory turnover to improve business performance, increase profitability indicators ROA, ROE Revaluation of fixed asset items Management of market risks The company evaluated the risks from the use of derivative instruments operating chinh Manager have to set goals and basic principles of financial management for the company Establish detailed policies as identified and risk assessment, risk limits and make risk prevention strategies Prepare regular reports to the board and executive review Try to cut costs, limit the customer to take advantage of capital Regulate the appropriate amount of cash departments to build their own financial KPI REFERENCES Financial management curriculum Facility, Dr Nghiem Sy Commerce - Hanoi University of Technology Financial statements of the company stock S in Vi et Nam audited by the audit Deloiltte company certified in 2009, 2010, 2011  ... 2010 respectively The decrease of current asset turnover shows that the company has used current asset uneffectively It can be seen from the balance sheet that the current asset increases by... (Revenue/Average total Asset) x (Average total asset/Average owner’s equity) = ROS x Total asset turnover x (Average total asset/Average equity) + Net Income = 4.166,6 + Average Equity = (Equity... increases Total asset turnover by saving assets and increasing sales 2.4.2 Second Dupont equation: Return on equity (ROE) ROE = Net Income / Average owner’s equity = (Net Income/Revenue) x (Revenue/Average