Academy of Finance Graduation thesis DECLARATION I hereby declare that this thesis is my own work and effort It has not been submitted anywhere for an award Where other sources of information have been used, they have been acknowledged Graduation thesis author Phạm Thị Hồng Ngân Pham Thi Hong Ngan CQ49/51.03 i Academy of Finance Graduation thesis ACKNOWLEDGEMENT I would like to express my deep gratitude to all those who have given me the possibility to complete this graduation thesis In preparing this graduation thesis, I have had generous help and advice from my teachers, my colleagues, my family and my friends I would like to express my great thanks to all of them First of all, I would like to express my deepest gratitude to my supervisor, Tran Thi Thu Nga, lecturer of Academy of Finance, who has given immeasurable help, constant guidance with many careful instructions, comments and valuable advice to me whenever I need Without her support, I am not able to have a complete thesis And I really appreciate her patience in reading and correcting my thesis Second, I wish to show my sincere thanks to all my teachers at Academy of Finance, who have provide me with worthy lessons throughout years of study Moreover, I have furthermore to thank the staffs of Son Ha International Corporation for their valuable supports during the internship period Without their helps, it would be impossible for me to finish this work Last but not least, I would like to send my loving thanks to my family whose great love and care in both spirit and health to encourage me to complete the thesis Pham Thi Hong Ngan CQ49/51.03 ii Academy of Finance Graduation thesis ABSTRACT This study investigated the factual state of working capital management efficiency at Son Ha International Corporation from the viewpoint of a fourth year student of Faculty of Foreign Language, Academy of Finance The paper aims at finding out the drawbacks in the company‟s working capital management and the reasons, and more importantly suggesting main methods to improve the efficiency of working capital management in the company In achieving these aims, the graduation paper surveys the current situation of working capital management and assess that whether it is effective or not From received results, the study argues the most practical implications at Son Ha International Corporation to improve the efficiency of working capital of the company in the year to come Pham Thi Hong Ngan CQ49/51.03 iii Academy of Finance Graduation thesis LIST OF ABBREVIATIONS VND: Viet Nam dong Son Ha International Corporation: SHI Pham Thi Hong Ngan CQ49/51.03 iv Academy of Finance Graduation thesis LIST OF TABLES List Page Chart 2.1: Business result of SHI form 2012 to 2014 (million VN dongs) 25 Chart 2.2: Density of working capital from 2012 to 2014 27 Chart 2.3: Comparing Working Capital with Fixed Capital and Total Capital (million VN dongs) 27 Chart 2.4: Cash and cash equivalent from 2012 to 2014 34 Figure 1.1: Classification of working capital Figure 2: Board of Son Ha International Corporation 23 Table 2.1: Working Capital Sources 29 Table 2.2: Working capital structure at SHI in 2014 and 2013 (million VND) 31 Table 2.3: Efficiency of cash management at SHI in 2014 36 Table 2.4: The fluctuation of Receivables at Son Ha International Corporation in 2014 39 Table 2.5: The efficiency of account receivables management at Son Ha International Corporation in 2014 42 Table 2.6: Inventory structure at Son Ha International Corporation in 2014 44 Table 2.7: Efficiency of inventory management at Son Ha International Corporation 46 Pham Thi Hong Ngan CQ49/51.03 v Academy of Finance Graduation thesis TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENT i ABSTRACT .iii LIST OF ABBREVIATIONS .iv LIST OF TABLES ………………………………………………………… …v INTRODUCTION 1.1 Rationale of the study 1.2 Aims of the study 1.3 Methods of study 1.4 The scope of the study 1.5 Organization of the study .3 CHAPTER 1: THEORETICAL BACKGROUND OF WORKING CAPITAL AND WORKING CAPITAL MANAGEMENT 1.1 OVERVIEW OF WORKING CAPITAL 1.1.1 Definition of working capital 1.1.2 Chracteristics of working capital 1.1.3 Classification of working capital 1.1.3.1 On the basic of concept 1.1.3.2 On the basic of time 1.2 WORKING CAPITAL MANAGEMENT IN BUSINESS 1.2.1 Definition of working capital management 1.2.2 Objectives of working capital management 10 1.2.3 Assessment criteria 11 1.2.3.1 Cash management 11 1.2.3.2 Inventory management 12 1.2.3.3 Accounts receivables management 13 Pham Thi Hong Ngan CQ49/51.03 vi Academy of Finance Graduation thesis 1.2.3.4 Some ratios assess the efficiency of working capital management .15 1.2.4 Efficiency of working capital management 17 1.3 FACTORS AFFECTING WORKING CAPITAL MANAGEMENT EFFICIENCY 17 1.3.1 External factors 18 1.3.2 Internal factors 19 CHAPTER 2: CURRENT SITUATION OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION 21 2.1 OVERVIEW OF SON HA INTERNATIONAL CORPORATION .21 2.1.1 General information of Son Ha International Corporation .21 2.1.2 Foundation and development of the company 21 2.1.3 Logo‟s meaning 22 2.1.4 Organization of management of Son Ha International Corporation 23 2.1.5 The company main business activities 23 2.2 CURRENT SITUATION OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION (SHI) FROM 2011 TO 2013 24 2.2.1 Business result at Son Ha International Corporation 24 2.2.2 Structure and sources of working capital at Son Ha International Corporation (SHI) 26 2.2.2.1 Working capital structure at Son Ha International Corporation 26 2.2.2.2 Sources of working capital at Son Ha International Corporation (SHI) 29 2.2.3 The practical of working capital management at Son Ha International Corporation 31 2.2.3.1 General Working capital Management at Son Ha International Corporation 31 Pham Thi Hong Ngan CQ49/51.03 vii Academy of Finance Graduation thesis 2.2.3.2 The current situation of cash management of Son Ha International Corporation 34 2.2.3.2.1 Overview of cash and cash equivalents in total working capital from 2012 to 2014 34 2.2.3.2.2: Analyzing financial ratios for cash management at Son Ha International Corporation 36 2.2.3.3 The current situation of account receivable management of Son Ha International Corporation 38 2.2.3.3.1 Overview of account receivable management from 2012 to 2014 .38 2.2.3.3.2 Analyzing financial ratios for account receivables management 42 2.2.3.4 The current situation of inventory management of Son Ha International Corporation 44 2.2.3.4.1 Overview of inventory management from 2012 to 2014 44 2.2.3.3.2 Analyzing financial ratios inventory management 46 2.3 ASSESSMENT OF CURRENT WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION 47 2.3.1 Company‟s achievements in managing working capital 47 2.3.2 The shortcomings in managing working capital and the reasons .48 CHAPTER 3: SOME SOLUTIONS TO IMPROVE EFFICIENCY OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION 52 3.1 ORIENTATIONS AND OBJECTIVES FOR FUTURE DEVELOPMENT OF SON HA INTERNATIONAL CORPORATION 52 3.1.1 Prediction of Economic-Social context in 2015 52 3.1.2 Orientations and objectives for the future development at Son Ha International Corporation 54 Pham Thi Hong Ngan CQ49/51.03 viii Academy of Finance Graduation thesis 3.2 SOME SOLUTIONS TO IMPROVE EFFICIENCY OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION 56 3.2.1 Precisely determining the working capital requirement of the company 56 3.2.2 Accurately finding the reasonable sources to finance working capital and balance the working capital structure 58 3.2.3 Managing the payment process more effectively 61 3.2.4 Improving the management of inventories 63 3.3 Recommendations to improve the efficiency of working capital management at Son Ha International Corporation 66 3.3.1 Some proposals to State Level 66 3.3.2 Some proposals to Son Ha International Corporation 67 CONCLUSION 69 REFERENCES Pham Thi Hong Ngan CQ49/51.03 ix Academy of Finance Graduation thesis INTRODUCTION 1.1 Rationale of the study In the market economy, working capital plays an essential role to maintain smooth running of a business No business can run successfully without an adequate amount of working capital because it is considered as the flesh and blood of an enterprise Enterprises that have paid a lot of attention in managing capital and using them efficiently gain a lot of opportunities to generate much more working capital internally, thereby lowering costs, improving their performance and boosting their competitive position However, in fact, because of remnants of the global financial crisis, geopolitical challenges and negative effects of the Ebola epidemic in West Africa, domestic enterprises have to face a lot of difficulties as well as the shortage of capital for many years The challenge of efficiently managing and using working capital becomes an urgent problem of all businesses More and more enterprises make losses because the ways they manage their working capital is inefficient This not only affects the survival and development of enterprises but also adversely affects the whole national economy stability The waste of capital, using capital inefficiency and overlapped capital has limited competitiveness and development among businesses Therefore, to get rid of this bad situation, businesses should ask themselves “How to improve the efficiency of working capital management?.” This is not a simple question, but a hard question that enterprises can not deal with immediately They should have an appropriate, proper and reasonable strategy that can draw different ways to improve the efficiency of working capital management, simultaneously focus on Pham Thi Hong Ngan CQ49/51.03 Academy of Finance Graduation thesis technology, Son Ha International Corporation is confident for the international competition in pipe/tube industry with regards to the quality and service in the coming time 3.2 SOME SOLUTIONS TO IMPROVE EFFICIENCY OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION Working capital is regarded as the “blood” of the company, lack of working capital the company can not run in a smooth manner as well as carry on its business So, if the company has troubles with managing working capital they should immediately find ways to improve the efficiency of working capital management According to the analysis about working capital management at Son Ha International Corporation, we can see that, besides the praiseworthy achievements the company gained, there are several material drawbacks remaining in managing working capital which hinder the development of the corporation With the high appreciation of the importance of working capital, I personally give some following solutions 3.2.1 Precisely determining the working capital requirement of the company One of the best solutions to deal with weaknesses in working capital management is to determine the appropriate requirement of working capital To carry on the business, every company needs capital especially working capital to meet the daily requirements However, it does not mean that the company has to have a lot of working capital If the company has too much working capital, it will lead to working capital stagnant and ineffective working capital using, less profit and high interest rate expense of debt Vice versa, if the enterprises not Pham Thi Hong Ngan CQ49/51.03 56 Academy of Finance Graduation thesis determine sufficient working capital requirement, it will lead to interruption of production process, business slowing down and decreasing business opportunity So precisely determining the working capital requirement for operation helps the company avoid capital congestion, unnecessary expenses, ensure the sufficient capital for day-to-day business activities and financial security for the company And Son Ha is not an exception Son needs to define accurately a proper amount of working capital So the question is: “What is the proper amount of working capital?” It is not an absolute amount It depends upon the needs and circumstances available in the company To answer for above-mentioned question, we have broadly three methods of estimating the requirement of working capital of a company: percentage of revenue or sales method, components method, and operating cycle method Estimating working capital means calculating future working capital and Son Ha could use one of them to determine the right one Percentage of Sales Method: It is the easiest of the methods for calculating the working capital requirement of a company This method is based on the principle of „history repeats itself‟ For estimating, relationship of sales and working capital is worked out for say last years If it is constantly coming near say 40% Advantage of this method is that it is very simple to understand and calculate also Disadvantage includes its assumption which is difficult to be true for many organizations Components method: Here we take up one of the planning models of working capital to estimate working capital The method adopted here attempts at estimation of working capital and its components by taking into account, the period for which the various items remain as stock or as Pham Thi Hong Ngan CQ49/51.03 57 Academy of Finance Graduation thesis outstanding, the cost structure of production and annual production It assumes even production and even sales, throughout and what is produced is completely sold Operating Cycle Method: This is probably the best of the methods because it takes into account the actual business or industry situation into consideration while giving an estimate of working capital A general rule can be stated in this method Longer the working capital operating cycle, higher would be the requirement of working capital and vice versa However, defining working capital requirement is not really as simple as above because it depends on the rationality of planned criteria during the operating period During my internship at Son Ha International Corporation, I think that the company should proactively identify the proper amount of working capital needed to set mobilization plans and use that capital effectively, avoid wasting and capital stagnant Hence, the best method for the company now is Operating Cycle Method to predict short-term working capital needs because it is very simple and suitable for the company having stable sales and increasing revenue If the short-term working capital need cannot be met, the company should rearrange the structure of working capital, improve inventory turnover or even withdraw working capital in inventory 3.2.2 Accurately finding the reasonable sources to finance working capital and balance the working capital structure As I analyzed in chapter II, the structure of working capital sources was unsafe and risky, in which the temporary working capital sources held the larger part than the regular one The company used short-term resources to finance Pham Thi Hong Ngan CQ49/51.03 58 Academy of Finance Graduation thesis long-term assets, which causes financial imbalance because almost all temporary working capital sources came from short-term loans and trade payables items Therefore, to manage working capital well the company should proactively find the reasonable sources to finance working capital to reduce risks, minimize the capital using expenses and balance the financial situation The followings are some sources that are suitable for the company‟s business activities: Bank Loans: Working capital, or the money a company needs to run its normal operating cycle, can be obtained by borrowing from banks Borrowers can turn to commercial lenders, credit unions, local banks… for these types of loans The repayment terms can a short as one-year and as long as seven years Bank credit capital is the additional capital, not the frequent capital which joins and forms the company With the appropriate interest rate, bank loans can help the company deal with the temporary difficulties However, when borrowing from banks the company should consider the solvency of the company as well as build a proper business plan to make sure that the business is always profitable Trade Credit: Businesses can also make trade credit agreements with their long-time suppliers The suppliers agree to provide the service or goods with delayed payment terms Trade credit terms are wholly determined between supplier and business owner, but most credit extended is typically due no more than 90 days after service or supply date The company should have a particularly good relationship established with trade creditors This can not be considered as a major capital fund but when using this capital, the company does not have to pay expenses Pham Thi Hong Ngan CQ49/51.03 59 Academy of Finance Graduation thesis However, the company can not abuse this fund because its can only be accounted for temporary period Factoring: Factoring entails the sale of accounts receivable to another firm then collects payment from the customer Through factoring, the company can shift the costs of collection and the risk of nonpayment to a third party In a factoring arrangement, the company and the factor work out a credit limit and average collection period for each customer As the company makes new sales to a customer, it provides an invoice to the factor The customer pays the factor directly, and the factor then pays the company based on the agreed upon average collection period, less a slight discount that covers the factor‟s collection costs and credit risk It is a fast and convenient way for the big manufacturing company as Son Ha to provide the company with immediate cash flow from sales and avoid capital stagnant Raise capital from employees in the company: This solution will reduce pressure on long-term capital as well as potential risks in the business It makes employees motivate in working with high responsibility, which contributes for the improvement of the company competitiveness However, to build a suitable working capital structure with suitable sources, the company should develop capital-mobilizing strategies in accordance with market conditions and business environment in each period They should also to estimate the risks and their solvency when borrowing from banks and ensure the safety of funds but still promote business activities Besides, the company needs to create trust for capital suppliers by enhancing the prestige of the company: Stabilize and rationalize financial norms, payoff loans on time… Pham Thi Hong Ngan CQ49/51.03 60 Academy of Finance Graduation thesis 3.2.3 Managing the payment process more effectively As mentioned in chapter II, the amount of account receivables at Son Ha International Corporation still remained high and provisions for bad debts increased that reflects the difficulty of capital recovery and capital stagnant as well as increases in capital using expenses to meet the needs of operation Account receivables increase revenue for the company, but if they remain too high and take a long time to collect payments from customers, it will cause a lot of difficulties for the company Therefore, effective receivables management is essential to avoid overdue debts or bad debts The company can apply following solutions to make the accounts receivable management much more effectively: Firstly, payment accountant needs monitoring by opening book in detail of accounts receivable, identifying overdue receivables and calculating interest for this overdue receivables Especially, with the order of high value, the company should require customers to give advanced payment in order to ensure the ability to recover the debt The company should apply the trade discount policy for investors to encourage them to pay the debt as soon as possible It can increase the amount of money in the company and close the gap between the cash flow from business operations and net revenues Secondly, during the process of signing the construction contract, the company must prepare terms of the contract in detail, especially about the advanced payment and the payment process The company should give specific binding of payment if the investor violates any terms of this contract The terms of selling on credit for customers and delaying payment for investors must be Pham Thi Hong Ngan CQ49/51.03 61 Academy of Finance Graduation thesis declared in the contracts about the time of credit, payment discount, late payment penalty… Evaluating the liquidation and credit capacity of the customers is identifying the payment capacity of the customers, whether they pay the debts on time The company needs to analyze such indicators as: customers‟ solvency, law compliance, business attitude…Besides, the company needs to evaluate the credit capacity They should only provide products for customers who are punctual, compliant and have good reputation The company also needs to strictly regulate the time of payment, types of payment and late payment penalty, ensure the capacity of debt collection Thirdly, the company should focus on handling bad debts and strengthening accounts receivable supervision To deal with bad debts the company should have some strategies as bellows: Enhance payment discounts to customers: the increase of payment discounts rate will encourage customer early payment and attract more new customers The other short-term receivables should be recovered in time to avoid capital stagnation affecting capital efficiency of the company The company should apply overdue interest rate of 150% for overdue debts the same as Bank Provision for doubtful debts need to be done The deduction amounts depend on the actual situation of the company receivables and in accordance with law Making provision for receivables helps the company more active in case customers not have the ability to pay debt Pham Thi Hong Ngan CQ49/51.03 62 Academy of Finance Graduation thesis The company needs to control the account receivables by organizing them in time period and collecting receivables before due day 3.2.4 Improving the management of inventories Son Ha „s current inventory management is not really effective because the levels of inventories increased dramatically and the inventory turnover decreased moderately reflected the risks of capital backlog which does not make any benefit for the company This is not a good perspective for the company because the company had to wait longer to sell products and generate profits Decreasing inventory turnover often means sales are decreasing below expected levels That would increase the expenses to hold these inventories and result in capital backlog As we can see, the company did not have a good direction of inventory in management Therefore to reduce inventories holding costs and boost sales, the company should consider the following steps to improve the efficiency of inventory management: Step 1: Conduct market research about prices of raw materials, plan reserve materials if it‟s price is expected to increase in the future (this requires accurate information and the ability to accurately predict based on real situation, should be carried out by a team of highly qualified staff) At the same time, the company should keep a close relationship with the providers and select vendors which have the most preferential prices as well as choose suitable means of transport to minimize transport costs Step 2: Set plan to buy, reserve materials in a reasonable quantity, forecast demand to ensure that amount of materials in the warehouse can meet the demand of manufacturing and trading Having too much inventory results in paying additional storage costs, and having too little inventory can result in Pham Thi Hong Ngan CQ49/51.03 63 Academy of Finance Graduation thesis paying additional fees for rushing orders and expedited shipping Son Ha International Corporation needs to forecast the demand in order to avoid under or over stocking products, forecast the demand so that the correct level of inventory is maintained Step 3: Carry out the classification management for each type of material, monitor the number of materials used in day, the inputs, the number of corrupted materials, and original daily report to management Son Ha should frequently supervise the reserve level for each product line and the research on the customers‟ preference and interest to determine the product lines that should be imported more, avoiding the shortage of one item and the excess of the other Step 4: Use technology for many advantages There‟s a wide selection of inventory management software on the market today The right technology can more than pay for itself by helping the company‟s streamline and improve inventory management and reduce costs Step 5: Train the employees well Any employee responsible for ordering anything that comes through the doors of the company, whether it‟s floor merchandise, raw materials, or just pens and paper towels, should receive inventory management training This will help the company manage the inventories proactively and effectively Step 6: Enhance preservation of raw materials, improve management efficiency by building the warehouse for storage of materials to avoid losses due to weather, climate or the theft Step 7: The last step is to reduce the lead time The longer the lead time, the more inventories the company has in its warehouse The manager should work with suppliers and the warehouse on ways to get items scanned into Pham Thi Hong Ngan CQ49/51.03 64 Academy of Finance Graduation thesis inventory sooner The faster products can get into inventories after an order is made on a consistent basis, the less inventories needs to be held into stock During my internship at Son Ha International Corporation, the company use just-in-time inventory management practices In manufacturing processes, just-in-time inventory management means having the right material, at the right time, in the right place, and in the right amount needed to make a product Unlike traditional inventory management, just-in-time inventory management makes sure raw materials are ordered just when they are needed rather than weeks (or months) in advance, thus reducing in-process inventory and the associated carrying costs And this method is suitable for a manufacturing company as Son Ha International Corporation However, managing inventory is not as really simple as we are talking about It requires a deep understanding about the company‟s business, the competitive market, the opponents and the management methods What company should now is to reduce the levels of inventories, try to boost sales and only hold more inventories that are interested by many customers This will help the company to reduce the inventories costs Reducing the costs of inventory does not always mean having to switch to a cheaper supplier or sacrificing quality By making systems more efficient, reliable and streamlined, a business can reduce its direct and indirect inventory costs as well as communicate closely with the suppliers, warehouse and fulfillment center to discuss methods for reducing costs and ask for advice on what can be done Pham Thi Hong Ngan CQ49/51.03 65 Academy of Finance Graduation thesis 3.3 Recommendations to improve the efficiency of working capital management at Son Ha International Corporation 3.3.1 Some proposals to State Level As a domestic enterprise, Son Ha International Corporation and many other businesses could be affected by the Vietnam legal system However, the legal system now is not really comprehensive and effective The current business environment is not truly equal and transparent The rule of law is not complied with in the organization and operation of the state apparatus It is necessary now to further improve market economy‟s institutions and reform the legal system in order to determine the extent of legal regulation in the relation between the need for state management and the need to create as much as possible favorable conditions for development Ministry of Finance should refund taxation promptly and pay charter capital for account receivable of enterprises They should also have timely tax reimbursement policies Although Value Added Tax doesn‟t account high proportion in the company's accounts receivable; if it doesn‟t refund promptly, it will result in the waste because the company has to borrow from the outside with the high interest rate The Government should ensure comprehensiveness of the market economy‟s institutions and implementing agencies as well as ensure the harmonization between Vietnam‟s specific institutions and widely recognized “rules of play” of the international community Besides, the Government should ensure transparency and easy accessibility of the legal system and promote the development of financial Pham Thi Hong Ngan CQ49/51.03 66 Academy of Finance Graduation thesis market, especially the monetary market so that the enterprise can diversify investment and select methods of raising capital 3.3.2 Some proposals to Son Ha International Corporation There are some proposals that can improve the efficiency of working capital management Company can consider about using them to gain the best result of business operation as well as achieve the goal they had set up They are: Boosting product sales and product diversification in order to increase sales and profits for the company: Currently, to increase the company's competitiveness in the market, the company needs to promote the implementation of innovative products and technology to boost consumption Boosting consumption is a prerequisite for companies to increase sales and profits The company may conduct product promotion in newspapers, magazines and the company's website,…as well as expand links with agents in Hanoi and surrounding provinces to increase sales and expand the market Building optimal capital structure and using financial leverage reasonable: The use of debt will increase business value but also increases the financial risk to the business Therefore, when using the loan, the company need to prudent to ensure the safety of funds but still promote business activities The use of financial leverage amplifies profits of business but also brings a lot of risk Managers need to determine the ratio of debt in total capital resources to ensure balance between risk and profit as well as have some methods to prevent risks that may occur Enhancing relationships with customers on the perspective of equality and cooperation for development: check product quality before delivery to the Pham Thi Hong Ngan CQ49/51.03 67 Academy of Finance Graduation thesis customer, perform well customer care policy, comply with contracts signed with customers in terms of quality, quantity, inform customers about the changes related to the contract and take measures to negotiate, … Pay attention to the development of human resources: organize staff training courses, create conditions for staff participate in conferences and seminars on subjects of scientific and technical, recruitment more professional and skilled workers to meet the development requirements of the company Increasing the quality of workforce will help the company manage the manufacturing activities well and that will motivate employees to increase productivity and promote efficiency of working capital management Invest in joint ventures, associate with other companies in the same industry to create competitive advantages as well as diversify products and product distribution channels The company can save money from joint ventures as well as use the technology of the other companies This will reduce the expenses when carrying out business Increasing the circulating cycle speed of working capital through approaching the new technology Investing in modern machinery and technology is very necessary to increase the productivity and shorten the production It will speed up the working capital circulation in order to improve working capital management efficiency Pham Thi Hong Ngan CQ49/51.03 68 Academy of Finance Graduation thesis CONCLUSION Well-managed working capital is crucial to the running of a healthy and successful business No business can run successfully without an adequate amount of working capital because it is regarded as the blood of the enterprise Being in the manufacturing sector, Son Ha International Corporation has always understood the importance of working capital efficiency in its development process In recent years the company always pays attention on improving the efficiency of working capital management The prestige of the company has been insisting on the market Revenue, profits grow steadily over the years, the remuneration of officers and staff is constantly improved and enhanced However, besides achievements, the company still has some limitations in the working capital management Deriving from the actual situation in the company and the knowledge learning from university, I made the research on the working capital management efficiency of the company Thereby, I boldly proposed some solutions to improve the efficiency of working capital at Son Ha International Corporation However, improvement of working capital management efficiency is a complex problem It needs investigating deeply and approaching realistically So during internship and writing this essay, mistakes are unavoidable I look forward to receiving valuable contribution from the lecturers and other readers Pham Thi Hong Ngan CQ49/51.03 69 Academy of Finance Graduation thesis REFERENCES ICWAI Working Capital (Part 1) - Financial Management & International Finance study material, Copyright © 2009 Institute of Cost and Works Accountants of India Corporate Finance Syllabus, copyright © 2014 Academy of Finance, Chief author PhD Vu Van Ninh Working Capital Management Basics, MBA Notes, various authors Copyright © 2013 FFL, AOF lecturers (2010), Lecture on Finance and Accounting, Volume Corporate Finance http://www.sonha.com.vn Pham Thi Hong Ngan CQ49/51.03 70 ... SITUATION OF WORKING CAPITAL MANAGEMENT AT SON HA INTERNATIONAL CORPORATION 21 2.1 OVERVIEW OF SON HA INTERNATIONAL CORPORATION .21 2.1.1 General information of Son Ha International Corporation. .. sources of working capital at Son Ha International Corporation (SHI) 26 2.2.2.1 Working capital structure at Son Ha International Corporation 26 2.2.2.2 Sources of working capital at Son. .. overview of working capital and the necessary of improving the efficiency of working capital management Chapter 2: The main part of the thesis It gives the overview of the development of Son Ha International