Capital financing model of ANSV company at 31/12/2- 123docz.net

988.603.209.538

Non-current assets

49.245.741.526

Current liabilities 791.559.61.796

Equity 245.689.718.191

Non-current liabilities 599.621.077

Permanent working capital resourse 197.043.597.742 (2017)

Non-current assets

41.711714.777

Current liabilities

Non-current liabilities 254.835.445

Permanent working capital resourse 178.558.624.548 (2018)

Equity 220.015.503.880 Current assets

844.523.768.886

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Table 2.8. Working capital resourse of ANSV in 2016, 2017, 2018

Items

31/12/2016 31/12/2017 31/12/2018 Difference 2018-2017 Difference 2017-2016

Amount (VND) Propor

tion (%)

Amount (VND) Propor

tion (%) Amount (VND) Propor

tion (%) Amount (VND) Rate (%) Amount (VND) Rate (%) I, Permanent working capital

resources (1-2) 169,290,431,298 13.04% 197,043,597,742 19.93% 178,558,624,548 21.14% (18,484,973,194) -9.38% 27,753,166,444 16.39%

1, Long-term capital resourses 201,609,941,803 246,289,339,268 220,270,339,325 (26,018,999,943) -10.56% 44,679,397,465 22.16%

a, Non-current liabilities 254,835,445 0.13% 599,621,077 0.24% 254,835,445 0.12% (344,785,632) -57.50% 344,785,632 135.30%

b, Equity 201,355,106,358 99.87% 245,689,718,191 99.76% 220,015,503,880 99.88% (25,674,214,311) -10.45% 44,334,611,833 22.02%

2, Non-current assets 32,319,510,505 49,245,741,526 41,711,714,777 (7,534,026,749) -15.30% 16,926,231,021 52.37%

II, Temporary working capital

resources 1,129,358,852,680 86.96% 791,559,611,796 80.07% 665,965,144,338 78.86% (125,594,467,458) -15.87% (337,799,240,884) -29.91%

1, Short-term trades payables 954,531,453,237 84.52% 495,420,047,791 62.59% 545,896,851,299 81.97% 50,476,803,508 10.19% (459,111,405,446) -48.10%

2, Short-term advances from

customers 7,876,328,612 0.70% 48,683,801,544 6.15% 23,889,940 0.00% (48,659,911,604) -99.95% 40,807,472,932 518.10%

3, Taxes and payable to the state

budget 42,363,715,089 3.75% 16,769,092,830 2.12% 6,078,195,411 0.91% (10,690,897,419) -63.75% (25,594,622,259) -60.42%

4, Payables to suppliers 10,775,952,466 0.95% 22,805,084,916 2.88% 18,127,314,008 2.72% (4,677,770,908) -20.51% 12,029,132,450 111.63%

5, Short-term acurred expenses 42,786,244,494 3.79% 6,754,742,055 0.85% 3,055,512,127 0.46% (3,699,229,928) -54.76% (36,031,502,439) -84.21%

6, Other short-term payables 52,760,337,613 4.67% 3,282,891,151 0.41% 644,190,585 0.10% (2,638,700,566) -80.38% (49,477,446,462) -93.78%

7. Short-term loans and

obligations under finance leases 14,231,992,099 1.26% 180,351,131,088 22.78% 56,377,295,869 8.47% (123,973,835,219) -68.74% 166,119,138,989 1167.22%

8.Bonus and welfare funds 4,032,829,070 0.36% 17,492,820,421 2.21% 35,761,895,099 5.37% 18,269,074,678 104.44% 13,459,991,351 333.76%

Total working capital resourse 1,298,649,283,978 100% 988,603,209,538 100,00% 844,523,768,886 100,00% (144,079,440,652) -14.57% (310,046,074,440) -23.87%

Resourse: Financial statement in 2016, 2017 and 2018 of ANSV company

To assess the organization and ensure working capital and assess the reasonableness of the working capital financing model in the Company, we divide the working capital according to the time of mobilizing and using capital.

Considering the capital financing model of the Company in 3 years 2016, 2017 and 2018, it shows that the Company uses a rather risky financing model, when using working capital to temporarily finance the company's activities. Through easy diagrams, in those 3 years, the entire fixed assets and part of the fixed assets are regularly secured by the temporary capital, while a part of the regular labor force and all temporary assets are secured by regular capital. This can bring a high rate of return on every dollar spent, but it brings great risks to the company such as supplier credit policy or customer repayment policy as well as credit policy. The use of banks changes the company's production and business operations and risks.

Considering Table 2.8 shows that the source of regular power resources increased in 2017 but the year 2018 decreased mainly because the company's net profit after tax in 2018 was much lower than in 2017. In general, the permanent working capital resources decreased in value, but the Company still ensures that production and business activities do not suffer from overdue debts from suppliers such as bank overdue debts. In terms of proportion, this source of capital increased steadily over the years 2016, 2017 and 2018 at 13.04%; 19.93%

and 21.14%. The owner sees financial risks thus increasing the retained earnings to reinvest in the Company.

On the contrary, temporary working capital resources accounts for a large proportion of the total working capital financed through 2016, 2017 and 2018 respectively, 86.96%; 80.07% and 78.86%. This reduction indicates that the company is aiming for financial safety because the current model is using too much financial leverage and capital appropriation. Going into details, we see that the short-term trade payables decreased gradually over the years, this content is very positive because the Company rarely uses risk tools in balancing the Company's financial resources.

2.2.4. Cash management.

2.2.4.1. The situation of cash management

Summary of expert interviews (including General Director, Chief Financial Officer, Cashier) is as follows: “The company has calculated to optimize cash fund reserves, planning cash flow spending by week to ensure ensuring the source of timely payment of debts, not letting overdue debts. The company is studying more measures to strengthen the cash flow ready to seize business opportunities”

ANSV uses a method of determining reasonable cash reserves by taking an average daily amount of money multiplied by the number of days reserved.

In addition, the company plans cash flow by predicting and managing cash-in and cash-out revenues in the short term: weekly, monthly and quarterly, from general to detailed by time. Due to being a telecommunications product company, derived from the company's sales policy, the company signed contracts and then delivered goods, installed and commissioned telecommunications equipment, with The time limit for customers depends on each project and depending on the customer, the work of predicting the cash flow from the company's business is quite difficult. Besides, the company also foresees borrowings, other capital gains, to be more proactive in predicting cash flow. For out-of-pocket payments, the company relies on revenue plans, payroll, budget tax payments, based on contracts and repayment of suppliers from which the company makes prediction of cash flows.

Spend. On the basis of comparing the source of income and cash outlay, the company implements revenue and expenditure balance measures. In addition, the company also has measures to manage and use cash strictly to avoid losses and be abused as follows:

Firstly: All cash revenues and expenditures of the company are made through funds, not collected outside the fund, self-collected and self-financed.

Second: The Company strictly manages all advances, advance levels, and payment terms so that it can recover the advance payment promptly.

- Thirdly: The company uses SMS banking and internetbanking tools of banks through various levels of management such as bank accounting, debt recovery

accounting, supplier accounting accounting, bank accounting accounting. , chief accountant, General Director to manage cash flow in and out.

2.2.4.2. The situation of cash

In order to better understand the situation of managing cash of the Company, we analyze table 2.9 on the situation of cash of ANSV Company:

Table 2.9. The situation of fluctuations by cash of ANSV Company in 2016, 2017 and 2018

Items

31/12/2016 31/12/2017 31/12/2018 Difference 2018-2017 Difference 2017-2016

Amount (VND)

Propor tion (%)

Amount (VND) Propor

tion (%) Amount (VND) Propor

tion (%) Amount (VND) Rate

(%) Amount (VND) Rate (%) I, Cash 139,250,175,264 100.00% 83,911,159,444 64.54% 31,056,784,342 67.43% (52,854,375,102) -62.99% (55,339,015,820) -39.74%

1, Cash on

hand 2,548,167,583 1.83% 1,333,241,874 1.59% 494,734,984 1.59% (838,506,890) -62.89% (1,214,925,709) -47.68%

2, Bank demand deposit

136,702,007,681 98.17% 82,577,917,570 98.41% 30,562,049,358 98.41% (52,015,868,212) -62.99% (54,124,090,111) -39.59%

II, Cash

equivalent - 0.00% 46,100,000,000 35.46% 15,000,000,000 32.57% (31,100,000,000) -67.46% 46,100,000,000 Total cash 139,250,175,264 100.00% 130,011,159,444 100% 46,056,784,342 100% (83,954,375,102) -64.57% (9,239,015,820) -6.63%

Resourse: Notes to the financial statements in 2016, 2017 and 2018

The above analysis shows that in the beginning of 2017, cash equivalent has increased by 46.100.000.000 VND, from 0% to 35.46% and to the end of the year 2018, this figure fell down 15.000.000.000 which is equal to 32.57%. Those are bank deposits with maturities of less than three months. We can see that in the beginning of the year 2017, the Company had a high proportion deposits to earn interest. To the beginning of 2018, those deposits decreased because the Company drawn them to pay for supplier payables and borrowings.

In the total capital of the Company, cash in bank always occupies higher proportion than that of cash in hand. Through the year of 2016, 2017, 2018, those figures respectively are 98.17%, 98.41%, 98.41%. The amount of cash in hand and cash in bank fell down through years. This figure decreased 9,239,015,820 VND in 2017 compared to 2016 and 83,954,375,102 VND in 2018 compared to 2017, indicating that in the year, the Company used a large amount of money to pay for suppliers and borrowings. In 2018, the figure of cash in bank is much higher than the figure of cash in hand showing that using cash in bank is convenient for big receiving and spending. In addition, it is saver for the Company to transact by bank than by cash. Also, the Company reduce cash storage cost and take interest from non-term deposits

In conclusion, through years, the Company has found out the more optimal method in using money as well as minimizes costs relating to borrowings. The Company should consider to implementing this method, however, it is important to notice to term of supplier payables and borrowings to avoid risks relating to payments.

2.2.4.3 Analyzing criteria for assessing cash management

Cash and cash equivalents accounted a small proportion in the structure of working capital but tended to decrease. This asset is low profitability. It is a low profitability asset, even negative. In recent years, with own policies, the state has successfully controlled inflation. Reducing cash reserves also helps the company to avoid the devaluation of currency. But cash is the most flexible asset helping the company can take advantage of business opportunities and avoid the risk of payment. However, to assess the amount of cash reserves of the company is whether reasonable or not, it is necessary to consider the rotaion of cash and analyze in depth the solvency of the company.

Table 2.10. Liquidity ratios in 2016, 2017 and 2018 of ANSV company

Items 31/12/2016 31/12/2017 31/12/2018

Difference 2018-2017 Difference 2017-2016 Amount (VND) Rate (%) Amount (VND) Rate

(%) 1.Current assets 1,298,649,283,978 988,603,209,538 844,523,768,886 (144,079,440,652) -14.57% (310,046,074,440) -23.87%

2.Inventories 239,453,231,088 297,741,604,450 286,164,059,162 (11,577,545,288) -3.89% 58,288,373,362 24.34%

3.Cash and cash

equivalent 139,250,175,264 130,011,159,444 46,056,784,342 (83,954,375,102) -64.57% (9,239,015,820) -6.63%

4.Current liabilities 1,129,358,852,680 791,559,611,796 665,965,144,338 (125,594,467,458) -15.87% (337,799,240,884) -29.91%

I. Current ratio

(1/4) 1.15 1.25 1.27 0.02 1.54% 0.10 8.61%

II. Quick ratio (1-

2)/4 0.94 0.87 0.84 (0.03) -3.94% (0.07) -6.94%

III. Cash ratio (3/4) 0.12 0.16 0.07 (0.10) -57.89% 0.04 33.21%

Resourse: Notes to the financial statements in 2016, 2017 and 2018

Capital financing model of ANSV company at 31/12/2018

Improving the efficiency of inventory management

Improving the efficiency of receivables management