Analyze the performance in using capital

CHAPTER 2: SITUATION OF BUSINESS PERFORMANCE AT HOANG

2.3 Analysis of business performance at Hoang Long Mechanics Technology

2.3.5 Analyze the performance in using capital

The business performance of an enterprise is an economic category, reflecting the level of its use of human resources. This is a very complicated issue, involving many factors and many aspects of the business and production process of the enterprise, such as labor, labor materials, labor objects, etc. Therefore, when analyzing, it is necessary to combine many criteria, such as capital use performance, profitability of capital.

Based on the company's financial statements over the past 3 years of 2016, 2017, 2018, we have the following business results:

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Table 9: Analyze the business performance of the company over 03 years 2016 - 2018 Unit: VND

Targets 2016 2017 2018

2016 / 2017 2017 / 2018

Difference 2017/2016

Difference ratio

Difference 2018/2017

Difference ratio Total revenue 67.585.275.300 77.049.993.860 86.474.447.413 9.464.718.560 12,28 9.424.453.553 10,90 Total cost 61.378.396.670 69.802.117.405 78.153.740.855 8.423.720.735 12,07 8.351.623.450 10,69 Profit before coporate

income tax 6.213.366.998 7.254.505.456 8.329.522.214 1.041.138.458 14,35 1.075.016.758 12,91 Total production capital 19.666.233.326 33.750.107.392 36.388.264.698 14.083.874.066 41,73 2.638.157.306 7,25 Working capital 19.039.569.943 33.076.640.756 34.478.198.031 14.037.070.813 42,44 1.401.557.275 4,07 Aggregate business

performance 1,101 1,104 1,106 0,00271 0,25 0,00 0,24 Efficient use of production

capital 0,31594 0,21495 0,22891 - 0,10099 - 46,99 0,01 6,10

Efficient use of working

capital 0,32634 0,21932 0,24159 - 0,10702 - 48,79 0,02 9,22

Number of times of working capital turnover (times)

3,55 2,33 2,51 - 1,22 - 52,39 0,18 7,12 Working capital turnover

(day) 101,42 154,54 143,54 53,13 34,38 - 11,01 - 7,67

( Source: Financial reports of Hoang Long Mechanics Technology Joint Stock Company from 2016 to 2018)

The ratio of combined business performance over 3 years is greater than 1, indicating that the company's revenue situation is greater than the total expenditure, and this coefficient tends to increase gradually over 3 years. Specifically, in 2017 reached 1,104 times, an increase of 0,25% compared to 2016, in 2018 reached 1,106 times, an increase of 0,24% compared to 2017. However, compared to the current average value of business performance coefficient This sales is relatively low. Obviously, the issue of cost cutting is an urgent problem that needs to be overcome early by Hoang Long Mechanics Technology Joint Stock Company as well as almost all other businesses in the period of market opening and this fierce competition.

The performance of using capital for production is an indicator reflecting the results of the use of capital types in the company. Because the proportion of working capital accounts for most of manufacturing capital, the author will analyze these two ratios in general. Over 3 years, the performance of capital use in 2017 had the lowest results, it can be said that this is the general situation of small and medium enterprises at that time. The performance of working capital of the Company in 2017 reached 0,21495 times, down 46,99% compared to 2016. In 2018, with the support of policies from the State, the business environment and the With the company's efforts, the performance of working capital has increased by 0,222891 times, an increase of 6,10% compared to 2017.

However, as well as the overall business performance factor, the performance of use The company's capital is still very low. In order to improve this situation, Cong needs to have a plan to improve the situation in all factors involved in the production process such as production, business, human resources, costs, raw materials, science and technology.

Working capital turnover cycles show us the effect of using working capital in bringing in revenue. Through the data analysis table, we see that in 2017, the working capital turnover reached 2,33 times, down 52,38% compared to 2016. In 2016, the Company only spent 101,42 days to return working capital. but in 2017 this number increased to 154,56 days. The situation did not improve much in 2018, the number of working capital turnover reached 2,51 times, equivalent to an increase of only 7,12%

compared to 2017. It can be said that an enterprise has both production, trade and Services such as Hoang Long Mechanics Technology Joint Stock Company, such working capital turnover is relatively good. However, the Company needs to improve the use of costs for production and business activities. Only in this way can the Total Revenue and Profit after Tax increase.

Analyze the performance in using capital

Overview of business performance in the period 2016-2018

Analyze the performance of using labor