Financial analysis a case of hoang anh gia lai group in vietnam

MASTER IN FINANCIAL MANAGEMENT Financial Analysis: A case of Hoang Anh Gia Lai Group in Vietnam Graduate student: Nguyen, Anh Tuan Supervisor: Dr Nguyen, Thi Kim Oanh HANOI, 2019 ABSTRACT Thesis Title: Financial Analysis: A case of Hoang Anh Gia Lai Group in Vietnam Pages：69 University: Vietnam National University Graduate School: International School Date: Octorber, 2019 Graduate Student: Nguyen Anh Tuan Degree: Master Supervisor: Dr Nguyen, Thi Kim Oanh Keywords: financial analysis, financial management, Hoang Anh Gia Lai Group This paper analyzes the corporate financial management of Hoang Anh Gia Lai Group and research the solutions to solve their problems in financial management, which focuses on analyzing the corporate financial management in specifically based on income statement, balance sheet, cash flow statement from 2014 to 2018 About analyzing the financial structure, the thesis will analyze the asset and capital of Hoang Anh Gia Lai Group About analyzing the capital and the manufacturing business, the thesis will use some formulas to calculate the temporary capital sources coefficient, regular capital sources coefficient, the coefficient between regular capital sources and long-term assets, etc About the situation of receivable and payables, the thesis will use some formulas to calculate the coefficient of overall solvency, the coefficient of quick solvency and the coefficient of instant solvency About analyzing the performance of Hoang Anh Gia Lai Group’s operation, the thesis will focus on analyzing the performance of using the assets (short-term assets and long-term assets) and analyzing the performance of using the capital (owner’s equity, loans, costs) In conclusion, the thesis will show the oriented development of Hoang Anh Gia Lai Group, the necessity of improving financial management at Hoang Anh Gia Lai Group and give solutions to improve financial management at Hoang Anh Gia Lai Group ACKNOWLEDGEMENT By extending my most sincere appreciation to International School, Vietnam National University, Hoang Anh Gia Lai Group, and my supervisor Dr Nguyen Thi Kim Oanh, I would like to express my thanks and gratitude for their input in helping me complete this master thesis Thank you! Author Nguyen Anh Tuan TABLE OF CONTENTS ABSTRACT ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS CHAPTER 1: INTRODUCTION 10 1.1 The reasons for choosing the research topic 10 1.2 Research objectives 10 1.3 Scope of research 10 1.4 Research methods 11 1.5 The signification of the thesis 11 CHAPTER 2: LITERATURE REVIEW 12 2.1 The definition, characteristics and classification of analysis the corporate financial management 12 2.1.1 The definition of analysis the corporate financial management 12 2.1.2 The characteristics and classification of analysis the corporate financial management 13 2.2 The database for analyzing the corporate financial management 15 2.2.1 Income statement 16 2.2.2 Balance sheet 16 2.2.3 Cash-flow statement 18 2.2.4 Presentation of financial statement (Financial statement disclosure) 19 2.3 Methods of analysis the corporate financial management 20 2.3.1 Comparative method 20 2.3.2 Descriptive statistics method 21 2.3.3 Exclusion method 21 2.3.4 Analysis and synthesis method 21 2.3.5 Other methods 22 2.4 Content of analysis the corporate financial management 23 2.4.1 Analyzing the corporate financial structure 23 2.4.2 Analyzing the capital sources and the manufacturing business 24 2.4.3 Analyzing the situation of receivables, payables and solvency of corporate 25 a Analyze the situation of receivables, payables 25 b Analyze the solvency of corporate 27 2.4.4 Analyzing the performance of corporate’s business 29 2.5 Process of analyzing the corporate financial management 30 2.5.1 Prepare for analyzing the corporate financial management 30 2.5.2 Perform analysis 31 2.5.3 Complete the analysis 31 CHAPTER 3: ANALYZING THE FINANCIAL MANAGEMENT OF HOANG ANH GIA LAI GROUP 32 3.1 Introduction of Hoang Anh Gia Lai Group 32 3.1.1 History of Hoang Anh Gia Lai Group 32 3.1.2 Characteristics of business operations 34 3.1.3 Characteristics of organization operation 35 3.1.4 Accounting and financial operation 37 3.1.4.1 Accounting book form 37 3.1.4.2 Consolidate financial statements 38 3.2 Analyzing the financial management of Hoang Anh Gia Lai Group 39 3.2.1 Analyzing the corporate financial structure of Hoang Anh Gia Lai Group 39 a Analyze the structure of assets of HAGL Group 41 b Analyze the structure of capital of HAGL Group 44 3.2.2 Analyzing the capital and the manufacturing business of Hoang Anh Gia Lai Group 45 3.2.3 Analyzing the situation of receivables, payables and solvency of corporate of Hoang Anh Gia Lai Group 47 a Analyzing the situation of receivables and payables of Hoang Anh Gia Lai Group 47 b Analyzing the solvency of corporate of Hoang Anh Gia Lai Group 48 3.2.4 Analyzing the performance of corporate’s business of Hoang Anh Gia Lai Group 51 a The performance of corporate’s business of HAGL Group 51 b The performance of using the assets of HAGL Group 55 c The performance of using the capital of HAGL Group 59 CHAPTER 4: SOLUTIONS TO IMPROVE FINANCIAL MANAGEMENT AT HOANG ANH GIA LAI GROUP 64 4.1 Oriented development of HAGL Group in the future 64 4.2 The necessity of improving financial management at HAGL Group 65 4.3 Solutions to improve financial management at Hoang Anh Gia Lai Group 65 CHAPTER 5: CONCLUSION AND RECOMMENDATION 68 REFERENCES 69 LIST OF TABLES TABLE 3.1 THE CONSOLIDATED BALANCE SHEET OF HOANG ANH GIA LAI GROUP FROM 2014 TO 2018 TABLE 3.2 THE STRUCTURE OF ASSETS OF HAGL GROUP FROM 2014 TO 2018 41 TABLE 3.3 THE STRUCTURE OF CAPITAL OF HAGL GROUP FROM 2014 TO 2018 44 TABLE 3.4 THE CAPITAL AND THE MANUFACTURING BUSINESS OF HAGL FROM 2014 TO 2018 46 TABLE 3.5 THE SITUATION OF RECEIVABLE AND PAYABLES OF HAGL GROUP FROM 2014 TO 2018 TABLE 3.6 ANALYZING THE INDICATORS TO EVALUATE THE ABILITY FOR PAYING SHORT-TERM DEBTS OF HAGL GROUP FROM 2014 TO 2018 TABLE 3.7 ANALYZING THE INDICATORS TO EVALUATE THE ABILITY FOR PAYING LONG-TERM DEBTS OF HAGL GROUP FROM 2014 TO 2018 TABLE 3.8 THE PROFITABILITY OF BUSINESS OPERATION OF HAGL GROUP FROM 2014 TO 2018 51 TABLE 3.9 THE CONSOLIDATED INCOME STATEMENT OF HAGL GROUP FROM 2014 TO 2018 52 TABLE 3.10 THE INDICATORS TO EVALUATE THE PERFORMANCE OF HAGL GROUP’S OPERATION FROM 2014 TO 2018 53 TABLE 3.11 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE GENERAL ASSETS OF HAGL GROUP FROM 2014 TO 2018 55 TABLE 3.12 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE SHORT-TERM ASSETS OF HAGL GROUP FROM 2014 TO 2018 56 TABLE 3.13 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE LONG-TERM ASSETS OF HAGL GROUP FROM 2014 TO 2018 TABLE 3.14 THE INDICATOR TO EVALUATE THE PERFORMANCE OF USING THE OWNER’S EQUITY OF HAGL GROUP FROM 2014 TO 2018 TABLE 3.15 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE LOANS OF HAGL GROUP FROM 2014 TO 2018 60 TABLE 3.16 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE COSTS OF HAGL GROUP FROM 2014 TO 2018 61 LIST OF FIGURES FIGURE 3.1 CHARACTERISTICS OF ORGANIZATION OPERATION OF HAGL GROUP 36 FIGURE 3.2 THE ACCOUNTING BOOK FORM OF HAGL GROUP FIGURE 3.3 THE STRUCTURE OF SHORT-TERM ASSETS OF HAGL GROUP FROM 2014 TO 2018 43 FIGURE 3.4 THE STRUCTURE OF CAPITAL OF HOANG ANH GIA LAI GROUP FROM 2014 TO 2018 45 FIGURE 3.5 THE ABILITY TO PAY THE SHORT-TERM DEBTS FROM 2014 TO 2018 FIGURE 3.6 THE ABILITY TO PAY THE LONG-TERM DEBTS FROM 2014 TO 2018 50 FIGURE 3.7 THE PERFORMANCE OF HOANG ANH GIA LAI GROUP’S OPERATION FROM 2014 TO 2018 54 LIST OF ABBREVIATIONS Balance sheet BS Board of Directors BOD Board of Managers BOM Business operation BO Earnings before interest and taxes EBIT Financial statement FS Fixed assets FA Hoang Anh Gia Lai Group HAGL Group Income statement IS Long-term assets LTA Net sales NS Profit after taxes PAT Short-term assets STA Return on Assets ROA Return on Equity ROE Return on Investment ROI Return on Sales ROS CHAPTER 1: INTRODUCTION 1.1 The reasons for choosing the research topic More than 10 years after the world economic crisis, Vietnam’s economy has changed significantly with domestic corporations and multinational corporations in many fields as real estate, finance, agriculture, etc In recent years, the Government’s economic sector is still playing a leading role, the private corporations sector has also growth in scale and quality, it contributes to the development of the country With the market mechanism, domestic corporations and foreign corporations compete fairly with each other, at that time, corporations want to develop in this market, they must promote their financial potential, information technology and human resources Hoang Anh Gia Lai Group is a corporation with joint stock company form with huge capital sources and large of scale Therefore, corporate financial management is an important thing to promote the development and improve the competitiveness of the corporations and expand the market shares Thus, the thesis “Financial Analysis: A case of Hoang Anh Gia Lai Group in Vietnam” is chosen for researching the solutions to improve the quality of Hoang Anh Gia Lai Group’s financial management 1.2 Research objectives This thesis focuses on analyzing the theoretical basis on analyzing the corporate financial management at Hoang Anh Gia Lai Group to evaluate the results of financial management and propose solutions to improve the company’s financial performance of financial potential of the corporation 1.3 Scope of research Due to the prolonged development history of Hoang Anh Gia Lai Group, at the same time, financial management faced difficult from 2014, so the scope of the research lasts years from 2014 to 2018 is reasonable for this thesis After this 10 - Through these indicators, we can see that HAGL Group was made a bad business by using the assets, owner’s equity and sales ineffectively Especially, in 2016, HAGL Group has all negative value of ROA, ROE, ROS b The performance of using the assets of HAGL Group  Analyze the performance of using the general assets of HAGL Group from 2014 to 2018 through following indicators: TABLE 3.11 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE GENERAL ASSETS OF HAGL GROUP FROM 2014 TO 2018 I II Return on assets The Asset Turnover Ratio 31 Dec 2014 31 Dec 2015 31 Dec 2016 31 Dec 2017 31 Dec 2018 0.0470 0.0140 -0.0430 0.0070 0.0012 0.092 0.147 0.133 0.092 0.106 10.87 6.803 7.519 10.87 9.434 21.266 70.677 -23.123 141.531 8,101.663 The depreciation rate of III total assets compared to net sales The depreciation rate of IV total assets compared to Profit after taxes With the data of table 3.11, we can evaluate that: - The return on assets of HAGL Group is decreased strongly from 0.0470 in 2014 to 0.0012 in 2018, it proves that HAGL Group spend one unit of total assets will make only 0.0012 unit of profit after taxes in 2018 Thus, we see that HAGL Group operate and using the total assets ineffectively to a business - The Asset Turnover Ratio is increased by twice times; it proves that the total asset turnover is moving slowly The reason is the increase of total assets value by 12 million VND but the net sales is only increased by 2.2 million VND from 2014 to 2018 - The depreciation rate of total assets compared to net sales is decreased slightly from 10.87 in 2014 to 9.434 in 2018, it shows that HAGL Group wants to make one unit of net sales, they have to spend 9.434 unit of total assets in 2018 55 This rate is decreased from 2014 to 2018 so HAGL Group is doing a business at acceptable level by using the total assets - The depreciation rate of total assets compared to profit after taxes is increased strongly from 21.266 in 2014 to 8,101.663 in 2018, it shows that HAGL Group wants to make one unit of profit after taxes, they have to spend 8,101.663 unit of total assets in 2018 The reason for the very high depreciation rate in 2018 is when the total assets is increased strongly but the profit after taxes is decreased to 6,244 million VND because of the increase of all costs (ECM, COGS, COS, etc…) and interest loans - In general, we can evaluate that the performance of using the assets of HAGL Group is not effective The depreciate rate of total assets is at high level but the profit after taxes is very low because of the increase of scale of total assets and value of the total assets when invests in projects as real estate, agriculture, etc  Analyze the performance of using the short-term assets of HAGL Group from 2014 to 2018 through following indicators: TABLE 3.12 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE SHORT-TERM ASSETS OF HAGL GROUP FROM 2014 TO 2018 31 Dec 2014 31 Dec 2015 31 Dec 2016 31 Dec 2017 31 Dec 2018 0.157 0.052 -0.195 0.041 0.00081 0.307 0.536 0.6 0.538 0.7 The profitability of I short-term assets (Return on short-term assets) II Short-term Asset turnovers ratio III Inventory turnovers 1.557 1.534 2.271 2.276 2.395 IV Day Inventory 234 238 161 160 152 1.427 1.857 1.667 1.865 3.25 6.37 19.23 -5.13 24.39 1,234.56 The depreciation rate of V short-term assets compared to net sales The depreciation rate of VI short-term assets compared to Profit after taxes 56 With data of table 3.12, we can evaluate that: - The profitability of short-term assets in 2018 of HAGL Group was 0.00081, it proves that HAGL Group spent one unit of investment short-term assets can only make 0.00081 unit of profit after tax It is decreased strongly compared to 0.157 in 2014 - The short-term assets turnovers was 0.7 rounds in 2018 which increased twice times compared to 0.307 rounds in 2014 and inventory turnovers was 2.395 rounds in 2018 compared to 1.557 rounds in 2014 It proves that the short-term assets investment and inventory of HAGL Group is moving quickly, time of one inventory turnovers is low, so that HAGL Group is operating in selling their real estate projects and make the liquidity  Analyze the performance of using the long-term assets of HAGL Group from 2014 to 2018 through following indicators: TABLE 3.13 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE LONG-TERM ASSETS OF HAGL GROUP FROM 2014 TO 2018 31 Dec 2014 31 Dec 2015 31 Dec 2016 31 Dec 2017 31 Dec 2018 0.067 0.0195 -0.056 0.0085 0.00013 0.132 0.202 0.171 0.111 0.126 0.509 0.096 -0.325 0.077 0.001 0.225 0.413 0.420 0.287 0.311 0.542 0.451 0.371 0.402 0.405 7.576 4.950 5.848 9.009 7.936 14.925 51.282 -17.857 117.647 7,692.307 The profitability of I long-term assets (Return on long-term assets) II III IV V The long-term assets turnovers ratio The profitability of net sales (Return on sales) Equity turnovers ratio The self-financing of long-term assets ratio The depreciation rate of VI long-term assets compared to net sales The depreciation rate of VII long-term assets compared to Profit after taxes 57 With data of table 3.13, we can evaluate that: - The profitability of long-term assets in 2018 of HAGL Group was 0.00013, it proves that HAGL Group spent one unit of investment long-term assets can only make 0.00013 unit of profit after tax It is decreased strongly compared to 0.067 in 2014 - The depreciation rate of long-term assets compared to net sales is 7.936 in 2018, it shows that HAGL Group wants to make one unit of net sales, they have to spend 7.936 unit of long-term assets investment It is increased compare to 7.576 in 2014 - The depreciation rate of long-term assets compared to profit after taxes is 7,692.307 in 2018, it shows that HAGL Group wants to make one unit of profit after taxes, they have to spend 7,692.307 unit of long-term assets investment It is increased strongly compare to 14.925 in 2014 The depreciate rate of long-term assets is at high level but the profit after taxes is very low because of the increase of scale of long-term assets and value of the long-term assets when invests in projects as real estate, agriculture, etc - Through the depreciation rate of long-term assets compared to profit after taxes and compared to net sales from 2014 to 2018, we can see the performance of using the long-term assets of HAGL Group is inefficient It also proves that HAGL Group invest in some fields which has not made profit for them yet - To analyze the effect of each indicator to the return on long-term assets, we will calculate: + The self-financing of long-term assets ratio is decreased from 0.542 in 2014 to 0.405 in 2018 which make the return on long-term assets decreased by 0.016 + The Equity turnovers is increased from 0.225 in 2014 to 0.311 in 2018 which make the return on long-term assets increased by 0.024 + The return on sales is decreased from 0.509 in 2014 to 0.001 in 2018 which make the return on long-term assets decreased by 0.062 58 - Although the Equity turnovers is increased but the self-financing of longterm assets ratio and the return on sales are decreased so the long-term assets is still decreased from 2014 to 2018 c The performance of using the capital of HAGL Group  Analyzing the performance of using the owner’s equity of HAGL Group from 2014 to 2018 through following indicators: TABLE 3.14 THE INDICATOR TO EVALUATE THE PERFORMANCE OF USING THE OWNER’S EQUITY OF HAGL GROUP FROM 2014 TO 2018 31 Dec 2014 31 Dec 2015 31 Dec 2016 31 Dec 2017 31 Dec 2018 I Return on Equity 0.115 0.04 -0.136 0.022 0.0004 II Equity turnovers 0.225 0.412 0.419 0.287 0.311 2.554 3.040 3.269 2.983 2.861 The total assets III compared to Equity Ratio IV Total assets turnovers 0.092 0.147 0.133 0.092 0.106 V Return on sales 0.509 0.096 -0.325 0.077 0.001 With the data of table 3.14, we can evaluate that: - The return on equity of HAGL Group is decreased strongly from 0.115 in 2014 to 0.0004 in 2018, it shows that HAGL Group spend one unit of owner’s equity on business operation will make 0.0004 unit of profit after taxes in 2018 - The Equity turnovers of HAGL Group is increased from 0.225 in 2014 to 0.311 in 2018, it shows that the Equity turnovers is moving quickly and promoting the performance of business operations - We will analyze the effect of indicators to return on equity by calculating: + The total assets compared to Equity ratio is increased by 0.308 from 2014 to 2018 which makes the return on Equity is increased by 0.0145 + The Total assets turnovers is increased by 0.014 from 2014 to 2018 which makes the return on Equity is increased by 0.0185 + The Return on Sales is decreased by 0.508 which makes the return on Equity is decreased by 0.12 59 In general, we can evaluate that HAGL Group is using the owner’s equity inefficient because of the increase of the owner’s equity but the ROS is decreased  Analyzing the performance of using the loans of HAGL Group from 2014 to 2018 through following indicators: TABLE 3.15 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE LOANS OF HAGL GROUP FROM 2014 TO 2018 I II Interest Cover Ratio Return on Investment 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 2014 2015 2016 2017 2018 4.137 1.747 -0.216 1.271 1.031 0.035 0.044 -0.007 0.037 0.031 With the data of table 3.15, we can evaluate that: - The Interest Cover Ratio of HAGL Group is decreased strongly from 4.137 in 2014 to 1.031 in 2018, it proves that HAGL Group is loss of control to pay the interest loans by profit from business operations It also affects the high risk of creditors when lend the capital - The return on investment is decreased slightly from 0.035 in 2014 to 0.031 in 2018, it shows that HAGL Group spend one unit of investment capital will make 0.031 unit of earnings before interests and taxes It demonstrates that HAGL Group uses the loans inefficient because of the decrease of ROI  Analyzing the performance of using the costs of HAGL Group from 2014 to 2018 through following indicators: 60 TABLE 3.16 THE INDICATORS TO EVALUATE THE PERFORMANCE OF USING THE COSTS OF HAGL GROUP FROM 2014 TO 2018 I II Return on cost of goods sold Return on cost of sales 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 2014 2015 2016 2017 2018 0.957 0.282 -0.119 0.267 0.312 21.272 11.156 -4.175 5.764 4.889 7.288 3.542 -1.386 1.173 0.951 0.637 0.133 -0.236 0.076 0.008 Return on III Enterprise Cost Management IV Return on Total Cost With the data of table 3.16, we can evaluate that: - The return on COGS of HAGL Group is 0.312 in 2018, it proves that HAGL Group spent one unit of COGS, it can make 0.312 unit of profit after taxes and it is decreased strongly compare to 0.957 in 2014 - The return on Cost of sales of HAGL Group is 4.889 in 2018, it proves that HAGL Group spent one unit of Cost of sales, it can make 4.889 unit of profit after taxes and it is decreased strongly compare to 21.272 in 2014 - The return on Enterprise Cost Management of HAGL Group is 0.951 in 2018, it proves that HAGL Group spent one unit of Enterprise Cost Management, it can make 0.951 unit of profit after taxes and it is decreased strongly compare to 7.288 in 2014 - The return on Total Cost of HAGL Group is 0.008 in 2018, it proves that HAGL Group spent one unit of Total Cost, it can make 0.008 unit of profit after taxes and it is decreased strongly compare to 0.637 in 2014 By analyzing the efficiency of using costs of HAGL Group, we can see that HAGL Group has a trouble in using costs to operate the business From 2014 to 2018, all these indicators reflect HAGL Group using more cost but their profit is 61 decreasing regularly year by year The reason for this trouble is HAGL Group manages costs unreasonable, it makes them have to pay more costs, it leads to reduce the profit of them All things considered, analyze the corporate financial management is necessary things to help the corporation can operate a good business which makes profit By analyzing the HAGL Group’s financial management through analyzing the corporate financial statement from 2014 to 2018, especially analyzing the corporate financial structure, the capital sources and the manufacturing business, the situation of receivables, payables and solvency of corporate and the performance of corporate’s business, we can evaluate the financial situation of HAGL Group that: - HAGL Group increases the scale of business operation with the increase of the total assets from 36,368,864 million VND in 2014 to 48,411,442 million VND in 2018, it proves that HAGL Group develops continuously and strongly However, there are some problems which affect the development of HAGL Group and it shows the weakness in financial management of HAGL Group - About the corporate financial structure, the total value of assets and capital of the HAGL Group increased steadily by 12,000 million VND, equivalent to twice times from 2014 to 2018 The increasing of values is coming from the long-term assets but the long-term debts is also increased strongly, it leads to HAGL Group may has trouble in paying the interest loans, debts, etc In particular, owner’s equity in 2018 increased by more than 2580 million VND, the rate of increasing owner’s equity is increased steady so it proves HAGL Group's business operation is successful in raising capital to expand market shares, increasing assets, profits, more and more developing in the future - About the capital sources and the manufacturing business, from 2014 to 2018, the Regular Working Capital Ratio is about 0.72 or 72 percent, it proves that the long-term assets of HAGL Group is formed primarily by the Regular Working Capital However, HAGL Group is borrowing money from outside with huge loans 62 from other corporations when the profit is decreased so the capital sources of HAGL Group is loss of control and it can make them have to spend a part of profits for paying the interest loans and it leads to the profit of HAGL Group is decreased 63 CHAPTER 4: SOLUTIONS TO IMPROVE FINANCIAL MANAGEMENT AT HOANG ANH GIA LAI GROUP After the analysis of Hoang Anh Gia Lai’s financial performance in Chapter 3, we can see that Hoang Anh Gia Lai has some problems and it is shown by the SWOT: Strengths: Hoang Anh Gia Lai Group has established since a long time ago, so they have many the relative in business Hoang Anh Gia Lai Group also known as one of ten biggest companies with high capital Weaknesses: Hoang Anh Gia Lai has many real estate and it cannot be sell so this is the main reason that the capital of Hoang Anh Gia Lai Group is misappropriation This is the results of the bad financial management Opportunities: Because of good relatives, Hoang Anh Gia Lai Group has borrowed a loan from THACO Group, this is an opportunity to restructure the company, improve the capital sources as a premise to develop the company in the future Threats: Although Hoang Anh Gia Lai Group has a high capital sources from equity, borrowing but if they not improve the financial management, they still may loss the liquidity and worse, they can go bankrupt From SWOT above, we will give the oriented development, the necessity of improving the financial management and the solutions for Hoang Anh Gia Lai Group 4.1 Oriented development of HAGL Group in the future Through the transitional period of the legal policies of the Government, HAGL group has continuously developed business operations and has become to be one of the leading corporations in Vietnam In the short-term, HAGL group operates in multi-sectoral fields in which rubber, hydropower, minerals and real 64 estate are the key sectors to create sustainable development HAGL group must focus on real estate business which sells million areas of apartments and offices for lease, production and distribution of coal-friendly furniture serve real estate projects These fields bring very high profit margin, so HAGL should care about domestic consumptions and export to other countries which needed to maximize the market shares and the profit that these markets bring back In the long-term, when the real estate becomes saturated, HAGL group should focus on other fields as rubber, iron On rubber, HAGL group must exploit and process rubber and iron with thousand hectares of rubber and millions tons of iron ore of HAGL group in Vietnam and other countries nearby The market is increasingly competitive, the policies change day by day, it makes business become more and more difficult but if HAGL group follow business plans was set, focus on financial management, investments and carry out projects, HAGL group may overcome these difficulties and become a big group with sustainable development 4.2 The necessity of improving financial management at HAGL Group Financial management analysis is very important and necessary, it will give some solutions for corporation to avoid the business risks and maximize the profit A good financial management will bring a good financial capacity therefore corporation can make a business without any external supporting and borrowing It also determines that the corporation is working good or bad through the ability of capital, capital mobilization, using capital and other indicators So financial management analysis will find out which indicators have negative effective to the business operation of the corporation 4.3 Solutions to improve financial management at Hoang Anh Gia Lai Group - Expand the market: The real estate investment is the main and bring largest revenue for HAGL Group but the quantity of real estate projects of HAGL Group 65 is still in inventory There are real estate projects which are building so the capital sources of HAGL Group is shortage Therefore, HAGL Group should promote the construction about quality and progress which can sell these projects on time and HAGL Group also should expand the market in resort and hotel for lease to increase the sales to maximize the profit of the corporation To ensure the real estate selling, HAGL Group should link to big banks which can give them the reasonable interest on loans and lend the customers who want to buy the real estate HAGL Group may discount for the customers who buy a large quantity of real estate or quick payment The real estate of HAGL Group is mainly located in Vietnam so HAGL Group should expand the market to other countries in Asia which has similarity GDP as Vietnam - Research solutions to collect the receivables: With the data which we analyze above, HAGL Group has a huge receivables and the capital sources is occupied so HAGL Group should build a reasonable policy for customers They should a business with partners which the financial situation is strength and stable, discount for customers to encourage them paying on time, collect the debts immediately after selling to avoid the debts which are difficult to collect Collecting the receivables must carry out regularly in month or quarter and avoid the end of the year when the customers need a lot of capital - Improve the performance of using the assets: Although HAGL Group has a huge total asset but the return on total assets is low level The reason for this problem is the assets are using not effective, mainly focus on long-term assets (real estate investment, rubber, etc.) To improve the performance of using the assets, HAGL Group should find the partner has similar fields with them to invest in them instead of buying assets to invest, it will decrease the expense so the profit after taxes will be promoted - Manage costs reasonable: Costs is important thing can affect to financial management and the profit of the corporation To control the cost in reasonable way, HAGL Group should focus on reducing the staffing costs, control the quality 66 instead of the quantity of investment and avoid scattered investment (Susan Ward, 2019) + Reducing the staffing costs: HAGL Group has a huge staff over the country, it makes their expense for paying wage and salary increased To reduce the staffing costs, HAGL Group must encourage and train employees get the high skills so in the future, with a half of staff quantity, HAGL Group can operate with now Therefore, HAGL Group can cut off the expense for paying wage and salary to maximize the profit + Control the quality instead of the quantity of investment avoid scattered investment: Recently, HAGL Group is investing in many fields as rubber, fruit, real estate, hydropower, mineral but this is a reason so that HAGL Group is lack of capital source Therefore, the quality of HAGL Group’s investment is not effective because each investment is at acceptable level and less competitive with other competitors To control the quality of investment, HAGL Group should focus on invest in real estate and rubber which bring mainly sales and profit for them They also transmit the residual field to other partners or link with them to increase the cash flow on capital sources - Change the corporate financial structure: the financial structure of HAGL Group tends to shift to long-term assets and long-term debts because of the real estate investment So HAGL Group should sell all of real estate for lease which cannot bring profit significantly to make the solvency Therefore, the value of long-term assets is decreased and short-term assets is increased, so they can solve the lack of liquidity 67 CHAPTER 5: CONCLUSION AND RECOMMENDATION The world economy is become in crisis with American – China trade war, it affects Vietnam’s economy significantly Our economy is open trade economy; it is a competitive market not only with domestic corporations but also foreign corporations invest strongly in Vietnam Therefore, domestic corporations want to survive and develop, it is important to improve the corporate financial management By analyzing the corporate financial management, administrators can give a right decision to improve the financial situation and the performance of business operations Hoang Anh Gia Lai Group is one of the biggest companies in Vietnam, the value of HAGL Group is proved by 17 years’ development and the high value of shares on stock market To develop the corporation stable and strong, Board of Directors, Board of Management, other departments are make effort best by analyzing the financial situation of HAGL Group to improve the corporate financial management My thesis “Financial Analysis: A case of Hoang Anh Gia Lai Group in Vietnam” is necessary topic for improving the corporate financial management On the basis of theoretical research on financial analysis, the thesis has applied to analyze the corporate financial management situation at Hoang Anh Gia Lai Group This thesis will give some solutions to improve the corporate financial management of HAGL Group and it will help HAGL Group can solve their problems recently 68 REFERENCES Anonymous, n.d, “Descriptive Statistics”, viewed 25 June 2019, Adam Hayes, 2019, “Balance Sheet”, viewed 25 June 2019, Chris B Murphy, 2019, “Understanding the Cash Flow Statement”, viewed 25 June 2019, Mai Ka, 2019, “THACO đầu tư vào HAGL gần tỉ USD”, viewed 28 July 2019, Morse, J.M., 2016, Mixed method design: Principles and procedures Routledge Rkdskool, 2018, “Analytic And Synthetic Methods: Methods Of Teaching Mathematics”, viewed 30 June 2019, Steven Bragg, 2019, “The income statement”, viewed 30 June 2019, Susan Ward, 2019, “How to Cut Your Business Costs”, viewed 20 August 2019, Will Kenton, 2019, “Corporation”, viewed 20 June 2019, Will Kenton, 2019, “Financial Analysis”, viewed 20 June 2019, 69 ... development of Hoang Anh Gia Lai Group, the necessity of improving financial management at Hoang Anh Gia Lai Group and give solutions to improve financial management at Hoang Anh Gia Lai Group ACKNOWLEDGEMENT... financial management of Hoang Anh Gia Lai Group 3.2.1 Analyzing the corporate financial structure of Hoang Anh Gia Lai Group Base on indicators in consolidated financial statements of HAGL Group. .. GROUP 3.1 Introduction of Hoang Anh Gia Lai Group 3.1.1 History of Hoang Anh Gia Lai Group Hoang Anh Gia Lai Group (HAGL Group) is also known by its name as Hoang Anh Gia Lai Joint Stock company with