LV Thạc sỹ_Enhancing working capital management in Lan Lan company

CONTENTS LIST OF TABLES .2 LIST OF FIGURES .3 ABBREVIATION .4 ACKNOWLEGEMENT ABSTRACT CHAPTER I INTRODUCTION 1.1 Rationale 1.2 Research objectives 10 1.3 Research methodology 10 1.4 Research scope .10 CHAPTER II: FUNDAMENTAL FRAMEWORK FOR WORKING CAPITAL MANAGEMENT .11 2.1 Overview of Operating capital in enterprises 11 2.1.1 Definition and characteristic of operating capital 11 2.1.2 Classification of operating capital in enterprises 12 2.1.2.1 Fixed capital 12 2.1.2.2 Financial investment capital 13 2.1.2.3 Working capital 13 2.2 Introduction of working capital in enterprises 14 2.2.1 Definition of working capital 14 2.2.2 The role of working capital in enterprises 15 2.2.3 Classification of working capital 16 2.2.3.1 Regarding the role of working capital in business process 16 2.2.3.2 Regarding to the form of presence: .17 2.2.3.3 Regarding to origin of working capital ( see the classification of operating capital) 17 2.2.4 Working capital demand and factors influence working capital needs 18 2.2.4.1 Factors influence the needs of working capital in business 18 2.2.4.2 Understanding working capital demand in business 20 2.3 Working capital management theory 20 2.3.1 Important of enhancing working capital in enterprises 20 2.3.2 Managing working capital21 2.3.2.1 Cash management .21 2.3.2.2 Inventory management 25 2.3.2.3 Receivables management 27 2.3.2.4 Payables management 29 2.3.2.5 Working capital management efficiency ratios 31 2.4 Financing of working capital 31 CHAPTER III: REAL SITUATION OF WORKING CAPITAL MANAGEMENT IN LAN LAN CO., LTD 34 3.1 Overview of Lan Lan company 34 3.1.1 Brief history and foundation of Lan Lan Co 34 3.1.2 Main function and duty of Lan Lan Co 35 3.1.3 Organization structure of Lan Lan Co., LTD 36 3.1.4 Human resource of Lan Lan company 38 3.1.5 General business activities of Lan Lan Co., LTD 38 3.1.6 Textile market characteristic and competitors in Thai Binh province 40 3.2 Business performance and Financial situation of Lan Lan Co., Ltd in the period 2009 – 2011 42 3.2.1 Business results 42 3.2.2 Financial analysis (ratios) 44 3.3 Working capital management in Lan Lan company 47 3.3.1 Working capital structure of the company 47 3.3.2 Assessing managing working capital efficiency of Lan Lan company 49 3.3.2.1 Managing cash 49 3.3.2.2 Managing receivables 50 3.3.2.3 Managing inventory 52 3.3.2.4 Managing payables .53 3.3.2.5 Measure of Working capital management efficiency ratios 55 3.3.3 Working capital financing in Lan Lan company 57 CHAPTER IV: RECOMMENDATIONS FOR IMPROVING WORKING CAPITAL MANAGEMENT IN LAN LAN CO 60 4.1 Evaluating working capital management of Lan Lan company 60 4.1.1 Achievements of Lan Lan company in working capital management60 4.1.2 Restrictions of Lan Lan company in working capital management and the reasons for those constraints 61 4.2 Recommendations for improving working capital in Lan Lan company 63 CONCLUSION 67 REFERENCE 69 APPENDIX .70 LIST OF TABLES Table 1: Component of Working Capital 15 Table 2: Cash in and Cash out in Cash budgeting 17 Table 3: Cash budget format 18 Table 4: Working capital management efficiency ratio 26 Table 5: Human Resource of Lan Lan company 33 Table 6: Business performance results of Lan Lan company over 2009-2011 37 Table 7: Financial ratios of Lan Lan company over 2009-2011 40 Table 8: Working capital structure of Lan Lan company 42 Table 9: Structure of receivables of Lan Lan company over the year 2011 46 Table 10: Structure of inventory of Lan Lan company over the year of 2011 47 Table 11: Structure of payables of Lan Lan company 48 Table 12: Measurement of Working Capital efficiency in Lan Lan company 50 Table 13: Structure of Assets, Liability and Equity of Lan Lan company 52 Table 14: Financing sources of Lan Lan company .53 LIST OF FIGURES Figure 1: Working Capital in manufacturing process 13 Figure 2: Organizational Structure of Lan Lan company 33 Figure 3: Manufacturing process of Lan Lan company .36 Figure 4: Profit growth of Lan Lan company .41 Figure 5: Current Assets’ components in Lan Lan company over three years now 45 ABBREVIATION WC Working Capital WCM Working Capital Management NWC Net Working Capital CA Current Asset CL Current Liability DSO Days Sales Outstanding DPO Days Payables Outstanding DIO Days Inventory Outstanding DWC Days Working Capital ACKNOWLEGEMENT No thesis can be completed without a great deal of help and encouragement I am exceedingly grateful to all people for giving me such huge support throughout three-month internship Firstly, I would like to give my heartfelt thanks to my instructor, Assoc Prof … – Director of International School of Management & Economics for his enthusiastic supervision from the beginning of forming thesis’s topic until the completion Despite of busy time schedule, he still spent a lot of time listening to my opinions whenever necessary, contributing his comments and ideas, and correcting internship draft I also express profound gratitude to my internship guide, Mrs …., LTD chief accountant She passionately oriented me to choose the internship topic, helped me to collect all essential data, explained me what I am confused, provided me useful advice to comprehend problems in the thesis In addition to direct instruction from my teacher and internship guide, I highly appreciated indirect support from Advanced Program Faculty staff, who gave me a straightway instruction, reminded me of the internship schedule, supported reference documents, and were always available anytime for help My last but not least thanks from the bottom of my heart are to all of my beloved family and friends for their care and love that inspired me all through my internship course Sincerely thanks again for all of your support and inspiration! ABSTRACT Thai Binh had been known for an agricultural and under- developed industry province for past years However, in accordance with the National Industrialization and Modernization policy of the whole country, Thai Binh has changed its economic structure from pure - agricultural model to agriculture-industry orientation since 1990s Industry in general, especially light industry has played the more and more important role in the local economy beside the continuous - main players, agriculture Textile that has been heavily invested recently is considered key direction in industry developing policy of local province Finding out the significantly decisive role of textile industry in the province’s economic growth at this time, I would like to take a close look at this market by, specifically, conducting the research on a textile company in Thai Binh- Lan Lan Co., Ltd My concentration is evaluation on how efficient the firm is operating and performing when taking three-month internship course, then having a deeper understand about textile market in the province For a manufacturing firm, one of the most vital aspects is managing inventory, cash flows and credit policy in order to well survive in the strict competition of the market In sum, working capital management is essentially decisional to stably stand and prestigious development Due to the limited time internship and the boundless knowledge and information, this thesis will just focus on the assessment and improvement of working capital management in Lan Lan Co., Ltd This thesis will go through fundamental concepts related to working capital , and some general information about the company will be revealed before directing to the real performance of the company, in which the main issues that will be discussed clearly include: the overall business results, the financial ratio criteria, and the facts of working capital management By and large, the thesis will be summed up with some realistic recommendations and solutions for efficiency of working capital, in specific, and of the firm’s performance in general The purpose is to figure out the current problem of the firm and somehow consult the firm to find ways to improve their management in working capital The thesis can not avoid short- comings; therefore; constructive comments and contributions will be highly appreciated CHAPTER I INTRODUCTION 1.1 Rationale Every running business needs capital vitally including fixed capital and working capital Even a business which is fully equipped with all types of fixed assets required is bound to collapse without an adequate supply of raw materials for processing; cash to pay for wages, power and other costs; creating a stock of finished goods to feed the market demand regularly; and, the ability to grant credit to its customers All these require working capital Working capital is thus like the lifeblood of a business The business will not be able to carry on day-to-day activities without the availability of adequate working capital Having such working capital is just a necessary condition to doing business, but how to use those working capital is much more significant term Therefore, managing working capital always gains the top of attention from corporate managers As a foreign corporation operating in Vietnam for years, Lan Lan co., Ltd always considers working capital management is key strategy to business proficiently The firm has deep understand the substance of working capital management in a manufacturing company where cash, inventory and account receivables are plays the main role in business cycle Comprehending such vital character of working capital in manufacturing firm, this thesis has valued the reality of working capital management in Lan Lan Co., Ltd as the outstanding and essential issue Throughout three-month-internship course at the Finance-Accounting Department of the firm, the thesis’s topic would appropriately be: “Enhancing working capital management in Lan Lan company ” that concentrates on two main research question: What is the real situation of working capital management in Lan Lan Co., Ltd? How to improve working capital management quality in Lan Lan Co., Ltd? In order to make these question clearly, some fundamental concepts of working capital and overall features and business performance of Lan Lan company are also revealed 1.2 Research objectives To assess the facts of working capital management in Lan Lan company To identify problems existing in the firm and to give some fundamental recommendations and solutions for solving such matters effectively 1.3 Research methodology The thesis approaches both primary data and secondary data Primary data is mostly the analysis results and calculated financial and business ratio from the balance sheet and Income statement of the firm Secondary data is reference documents from previous thesis and from reports, papers, websites that will be mentioned in the appendix part at the end of the thesis Some of the qualitative and quantitative date is sessile for the firm, so thesis just approaches them by interviewing people who are related to such information 1.4 Research scope Due to limited time and the availability of the data supplied, the thesis will be focus on three fiscal year of Lan Lan company from 2009 to 2011, then go to analyze some of the most outstanding problems and financial ratios Some aspects of working capital related to fundamental concepts chapter will not given in the real situation of the company because of the limited resource of information The thesis will mention Lan Lan company’s situation majorly in the picture of textile market in Thai Binh province to have a better look at how the firm is doing business 10 Cash turnover* reduce from 12.9 to 11.21, that shows at the end of 2011, the firm generated about one dollar for every one dollar cash less than the year beginning Cash turnover** at the beginning of 2011 reduced from 50.23 to 45.18 at the end of 2011 This reveals that the firm used entire cash five times less than at the beginning In sum, the cash efficiency management of firm is not good over one year now The firm should utilize redundant cash to generate profit avoid capital stuck  Receivables management ratios Receivables turnover soars from 8.2 to 13 (times) and DSO decreases from 45 to 28 (days).Commonly, the higher receivables turnover and the lower DSO is, the better the firm performs These numbers point out the good performance of the firm in receivables management  Inventory management ratios The inventory is obviously managed better when inventory turnover increases ( 12.47 to 13.02) and Days Inventory Outstanding diminishes ( 29.28 to 28.04)  Payables management ratios Both payables turnover in the beginning and at the end of 2011 are high This proves that the firm almost pays to suppliers in time Despite of reducing of the ratio from 170 to 129 X, this level is still high DPO does not change much over years and are kept at low level almost days This is an evidence for fast settlement to suppliers This is a good sign for managing payables of the firm  Days Working Capital (DWC) or Cash Conversion Cycle (CCC) The form and amount of working capital components vary over the operating cycle It would be hard to get the amounts of the components used in operations for an operating cycle Hence the working capital management efficiency is measured in terms of the “days of working capital” (DWC) DWC value is based on the dollar amount in each of equally weighted receivable, inventory and payable accounts The DWC represents the time period between purchases of materials on account from suppliers until the sale of finished product to the customer, the collection of the receivables, and payment receipts Thus it reflects the company’s ability to finance its core operations with vendor credit 57 Commonly, the lower DWC, the better it is DWC of the firm reduce from 69.14 to 52.22 is a good sign of performance 3.3.3 Working capital financing in Lan Lan company Let’s take a look at the structure of assets with liabilities and equity of Lan Lan company over year 2010 to 2011 Table 13: Structure of Assets, Liability and Equity of Lan Lan company 2010 2011 Current Assets Current Liability Current Assets Current Liability 13,932,706,908 10,240,991,561 13,151,161,337 9,929,502,482 Long-term liability Fixed Assets 13,110,570,996 3,870,182,852 Equity Long-term liability Fixed Assets 12,649,468,158 12,932,103,491 1,678,396,482 Equity 14,192,730,531 From the table, we can see that most of current assets of the firm are financed by current liability, the small rest are long-term liability and equity This proves that the firm is employing the matching approaching in finance assets Looking at more details about specific terms in financing sources of the firm 58 Table 14: Financing sources of Lan Lan company Beginning Ending 2011 2011 Discrepancy % change Current Liabilities 10,240,991,561 9,929,502,482 (311,489,079) Short-term loans 2,700,000,000 - (2,700,000,000) - Payables to supplier 251,360,463 410,790,573 159,430,110 Unearned revenues 2,839,800 2,082,800,000 2,079,960,200 99.864 to 6,225,923 1,196,250,299 1,190,024,376 99.480 Tax and payables (3.137) 38.811 government Payables to labor 4,184,625,524 5,318,402,036 1,133,776,512 21.318 Operating expense payable 15,016,770 - (15,016,770) - Internal payables - - - Reward and welfare funds 44,726,940 324,084,752 279,357,812 86.199 Other payables 199,235,941 604,174,822 404,938,881 67.023 Long-term liabilities 3,870,182,852 Total Equity 3,491 1,678,396,482 (2,191,786,370) (130.588) 1,260, 12,932,10 14, 192,730,531 627,040 8.882 In short-term fund financing, all kinds of payables increases exceptionally while short-term loans are not employed This may be due to the firm faces difficulties in borrowing money from banks in the period of high lending interest rate through 2011 59 The firm relies much on the payables account which is short-term but easily to access as a main resource Unearned revenue staggeringly soars by 99.5% in 2011 that means short-term obligation of the firm increases as well However, the firm has more cash available for investing in manufacturing and other activities at the beginning but must bear the risk due to the price fluctuation during the time Long-term fund is long-term loans from banks In 2011, the firm borrow USD five-year-term loan from parent company , Yumine Sewing with 1.2% interest rate and USD two-year-term loan from Bank of Tokyo Misubishi, Japan with 1.69% interest rate Equity of firms take into account a small part in financing working capital, the huge rest are used for facilitating fixed assets for long-term operation of the company 60 CHAPTER IV: RECOMMENDATIONS FOR IMPROVING WORKING CAPITAL MANAGEMENT IN LAN LAN CO 4.1 Evaluating working capital management of Lan Lan company 4.1.1 Achievements of Lan Lan company in working capital management Cash management:  The firm holds a lot of cash in hand available This helps to guarantee demand for payment in daily operation and for provision in the case of liquidity shortage The huge amount of cash will strengthen the image of the firms within creditors’ eyes, then the firm will easily access capital and supply sources  In addition, the firm has a lot of methods to push up cash management such as increasing speed of collecting cash, decreasing the velocity of cash expenditure and investing cash in savings deposit at banks Due to this effort, the firm raises more available cash for operations and earning interest from temporarily redundant cash Inventory management:  “Just In Time” method helps firm to control closely the change in inventory every time, accommodate the demand for inventory whenever needed This method saves the firm a lot of inventory cost such as: holding cost, storing cost, ordering cost and other cost including waste of sources for other investment, price fluctuation over time, inventory stuck for a long time, inventory depreciations, etc  Besides, Inventory management ratios containing inventory turnover and days inventory outstanding are quite good That quantitative criteria proves the efficiency in controlling and using inventory of the firm Receivables management The firm has experienced superior receivables management In specific:  The firm has set up a clear and detailed credit policy for each kind of classified customers, which helps firm easily to keep on track with receivables with each customer 61  The process for deciding whether to offer credit to customers or not is quite tight and careful in order to avoid bad debts or unreliable counterparties  Over one year now, the amount of outstanding customer receivables reduces exceptionally while the sales revenue keeps on raising This fact shows that the firm collects receivables quite well, reduces the amount of capital stuck in customers’ stores and faster utilizes capital for next operational activities  Both Receivables Turnover and Days Sales Outstanding ratios are high quality that strongly affirms the effectiveness in receivable management of the firm  Thanks to proper credit policy and effort of staff, the firm has experienced no bad debts, all contracts are settled before due; further more; the firm has built a strong and long-term relationship with customers with higher credibility and reliability among counterparties Payables management  The firm has not rely much on supplier payables This reality is evidence for affluent capacity of payment and high respect for credibility to counterparties of the firm The result is strengthening reliability of suppliers and stabilizing supplying sources for the firm  The amount of payables including tax payables, labor payables, welfare payables, etc occupy the high proportion in the structure of current liability with the cost is almost zero This inexpensive source helps the firm to save a lot of administrative expenses as well 4.1.2 Restrictions of Lan Lan company in working capital management and the reasons for those constraints Cash management :  The amount of cash holding is huge and equivalent with other current assets that may cause surplus in capital that has not utilized effectively The velocity of cash turn over has trend to decrease a little bit in 2011 This points out that the firm somehow faces a difficulty in collecting cash recently in comparison with the previous year 62  The form of investing redundant cash is mostly deposit at bank, which is quite safe but low interest rate, then reducing the profitability of firm The reason is that Vietnamese financial market has not developed yet, especially in unstable economy currently, it is not easy to find safe investment channel for manufacturing firm Receivables management: The firm evaluates credit policy basing on longstanding customers relationship This strategy is quite good in reducing risk, bad debts and administrative receivables expenses However, a lot of potential and new customers are missed out Inventory management: The firm has not invested much in market fluctuation research to keep track on price change or other variation related to inventory In addition, most of raw materials are imported, the change is much more complex Hence, the firm has not intentionally control raw material cost Annual cost of goods sold is still high in comparison with total sales revenue, so the net sales is not considerable Payables management  The proportion of supplier payables is small part of total payables and current liability This fact proves that the purchasing policy of the firm is not good Payables to supplier are quite cheap, easily accessible The firm should have been utilized such source by extending the credit term with suppliers, but in an acceptable degree in order to not affect the firm’s credibility  The bank loan is diminishing over year due to the banks tighten credit in high- inflation circumstance in 2011 The small enterprises are more difficult to access this kind of capital because of high interest rate and complex lending procedure  The firm seems to over-use payables including tax payables, labor payables, etc to finance current assets In the case of not good management, the firm will face a lot of difficulties such as the government intervention and losing the reliability of employees  The firm relies much on equity to finance assets and operational activities, which consolidate the independence of the owners Nevertheless, this financing cannot bring much profit for owners 63 The form of financing source is limited partly due to the financial market in Vietnam lack of development and transparency, financial instruments for corporations is illiquidity such as corporate bonds, commercial bills, etc That restricts firm to access to idle capital in market Other restrictions and disadvantages  The firm has been influenced by the common difficulties of textile-garment industry Most of raw materials for manufacture are imported Vietnam has not supply enough raw materials and the price is still expensive In addition, most of firms get process in the order contract So, the net sales after deducting cost of goods sold are low  The world and national economy faced a lot of disadvantage recent years, the export garment market narrowed down In addition, the competition in export market is much more strict with many garment export giants such as China, India, Bangladesh, Indonesia, etc  In 2011, Japan economy has stood loss and damages from interminably natural disasters As a sub-company of Yumine corporation, Lan Lan company has affected much due to the dependence of operation 4.2 Recommendations for improving working capital in Lan Lan company Cash management  Utilizing idle cash to invest more variously, but it is essential to make a equivalent cash reserve which is available anytime to guarantee liquidity for the firm  Due to most of raw materials are exported abroad and the settlement influenced by exchange rate, the risk of exchange rate is quite high The firm should have proper foreign currency management policy by employing hedging instruments such as SWAP, options, Acbits, etc In order to perform this policy well, the firm must have staffs who comprehend financial issues  Complying the compulsory principle in business: separating the functions and obligations of cashiers and accountants Frequent and sudden examining the matching 64 between real cash, cash in vault and cash in book to make sure everything is working properly Receivables management Receivables take into account for a huge proportion in current assets of the firm The firm has experienced good receivables management recently The following, in my opinion, are some recommendations to help this management more effective:  Firstly, the firm should slightly extend the credit term The current average term is 21 days, yet the Days Sales Outstanding in 2011 is almost 27 days That means there are some customers who did not pay in due Increasing credit term a little bit will attract customers to the firm’s policy and strengthen relationship among counterparties  In addition, penalty for late payment is necessary For example, it is possible to impose interest rate for overdue loans with increasing speed This procedure compensates loss for the firm when capital is stuck in customers’ hands and push up customers to faster finish settlement  The huge amount of receivables that the firm has possessed will restrict it to utilize capital for a period of time, then reduce the efficiency in operational activities A method for collecting cash from such receivables before waiting customers’ settlement is factoring, which means selling receivables with some discount for interested creditors such as banks This method reduces risk of bad debts but attracts a lot of capital for firms use at hand  The classification of customers and credit policy for each type are slightly general when the firm wants to keep on track closely these account receivables The firm should have more details for precise assessment of each customer because of not much quantity of customers In order to perform like that, the firm should organize a team specializing in managing receivables from following each customer’s receivables, customers’ performance to inform, force payment and collecting bad debts  The Planning & Business Department staff should always access the market, exploring market information, grasp the market demand to purposely broaden the market shares 65 Inventory management:  The firm had better invest in research market to estimate demand for inventory to make right and in-time decisions  Intentionally finding out the suppliers, establishing reliable and long-standing relationship with them to be offered the advantage such as credit term, discount in price, standard of raw materials then saving a lot of cost of goods sold  Preserving inventory in good condition to avoid unexpected damage, and frequently evaluating value of inventory in order to price inventory value again especially in the case of market fluctuation due to this has effects on whether to complement inventory or whether to change cost of goods sold and products price  Utilizing economically raw materials to save as much expense as possible This plan should be controlled closely by the factory management and managers Payables management  Diversifying current liabilities, using more leverage such as bank loans, other institutions’ loans, etc with deliberation to enhance higher return  Finding more available financing sources such as co-operating with other firms and institutions basing on mutual benefit principal  Utilizing payables to suppliers by using payment method such as promissory notes, Letter of credit through banking system to extend more credit due, reduce the speed of cash expense Other recommendations  Due to quality of management department determines directly working capital management efficiency So, human resource should be paid attention to by strengthening recruitment and professional training activity for employees especially in financial management, spontaneously, completing award and punishment policy transparently in using capital, especially raw materials exercising 66  Regularly tracking on working capital using and measuring working capital demand to avoid waste and making right decision in daily operations For long-term orientation, the firm should put up a market-research team that is in charge of collecting and progressing information, making estimations and right decision  Opening books that follow each debt with specific information about customers, credit term, etc according to debt classification: before due, overdue, bad debts to put up timely solutions However, these solutions must ensure to be effective but not worsen relationship between the firm and customers  Making provision for loan loss to compensate damage in time to avoid the bad influence on daily operation of the firm  Broadening the scale of manufacturing In spite of passively waiting for export contracts, the firm had better purposely look for inside Vietnam contracts, building retail market for its products to increase revenues  For efficiency of working capital management in firms, the role of the government and provincial authorities are very vital The government should continue stabilizing and clarifying regulations in business law and corporate law to create a healthy business environment for firms Along with inflation restriction policy currently, the government should consider the policy encouraging business activities for firms such as tax reduction, business procedure simplifying, step-by-step completion in financial market and instruments to help firms have more investment and financing opportunities 67 CONCLUSION Every firm needs working capital for daily operational activities Most of firms realize that working capital management is considered vital for their survival However, working capital management is not an easy task to comprehend Due to the complexity of this topic, the thesis will focus on some outstanding aspects which are brought in three main parts including: Chapter Presenting some fundamental concepts related to working capital management The target is providing readers foundation to comprehensive more clearly about the next core contents Chapter The thesis gives out the information introducing about Lan Lan company, which is the object of the research Along with overview about the establishment, development, functions, organizational structure, business activities and business environment of the firm, the report also analysis its financial and business outcomes over three years now In general, the company has experienced good performance with positive profit growth, financial criteria such as liquidity ratios, assets management ratios and profitability ratios have improved significantly However, the firm seems not be really good at expenses management, which has increasing trend in recent years The main content of the whole thesis, which evaluates the real situation of Lan Lan company in working capital management, is informed in chapter as well Working capital management of the firm has been analyzed in some aspects including working capital structure of the firm; policy in working capital management specifying cash management, inventory management, receivables management and payables management; assessing working capital management efficiency ratios basing on calculations; sources of financing working capital in the firms In conclusion, working capital management of Lan Lan company has a lot of improvement especially the 68 receivables management However, the efficiency has not been explored as expected in the firm The more details are presented in the analysis of this part  Chapter The thesis summarizes the main achievements that Lan Lan has experienced in working capital management, and also points out the restrictions that the firm has been stuck in Form such disadvantages, the thesis raises out some personally recommendations to help the firm improve the current situation in managing working capital more effectively and efficiently These contributions may have constraints in reality, however, it is essential for the firm to consider for references After three months internship in Lan Lan company, the writer has had opportunities to approach the realistic situation which is out of books Such experiences will be the most valuable lessons at university At the end of the thesis, I would like to give my most sincere thanks to my teacher, my internship guide, the Advanced Program staff, my friends and my family for support and love to complete my internship course 69 REFERENCE Vietnamese Financial statements of Lan Lan company 2009, 2010, 2011 PGS.TS Luu Thi Huong ( 2000), Giáo trình Tài doanh nghiệp, NXB Đại học Kinh tế quốc dân Đặng Thúy Phượng (2000), Giáo trình Tài doanh nghiệp, NXB Bộ Tài chính, NXB Tài chính, Hà Nội English Eungene F.brighham, Phillip R.Daves (Tenth Edition), Intermediate Financial Management South-Western Cengage Learning Paul Kimmel, Jerry Weygandt, Donald Kieso Finacial Acounting 5th edition John Wiley & Sons Inc Documents Shyoraj Singh MBA-IIIrd Sem, A summer training project report on Working Capital Management (A report submitted to D.P Technical University for the partial fulfillment of MBA degree 2009-2011) Nguyen Quang Huy, Working capital management, Case study: Hoa Phat still pipe company- Bachelor’s thesis in finance Advanced Finance K49, National Economics University Nguyễn Thị Mai Tâm Nâng cao hiệu sử dụng vốn lưu động tập đồn Hịa Phát Bachelor’s thesis in finance Corporate Finance K47, National Economics University Websites http://socongthuong.thaibinh.gov.vn http://www.moit.gov.vn http://www.saga.vn/ http://vi.wikipedia.org 70 APPENDIX Appendix 1: Income statement of Lan Lan company Appendix 2: Balance sheet of Lan Lan company Appendix 3: Working capital structure of Lan Lan company 71 ... IMPROVING WORKING CAPITAL MANAGEMENT IN LAN LAN CO 60 4.1 Evaluating working capital management of Lan Lan company 60 4.1.1 Achievements of Lan Lan company in working capital management6 0... 4.1.2 Restrictions of Lan Lan company in working capital management and the reasons for those constraints 61 4.2 Recommendations for improving working capital in Lan Lan company 63 CONCLUSION... appropriately be: “Enhancing working capital management in Lan Lan company ” that concentrates on two main research question: What is the real situation of working capital management in Lan Lan Co., Ltd?