DA NANG UNIVERSITY VIETNAM – KOREA UNIVERSITY OF INFORMATION AND COMMUNICATION TECHNOLOGY FACULTY OF DIGITAL ECONOMY & E – TRADE FINAL REPORT ANALYSIS OF THE FINANCIAL SITUATION AT BIBICA JOINT STO[.]
BIBICA COMPANY OVERVIEW
History of formation and development
On January 16, 1999, Bien Hoa Confectionery Joint Stock Company, known as Bibica, was founded through the equitization of three workshops: Cake, Candy, and Malt from Bien Hoa Sugar Company, with an initial charter capital of 25 billion VND The company has since expanded its operations, increasing the capacity of its soft candy production line to 11 tons per day.
In 2000, the company implemented a new distribution model by establishing branches in major cities including Hanoi, Da Nang, Ho Chi Minh City, and Can Tho Additionally, it invested in a production line for Indonesian-origin snacks with a capacity of 2 tons per day Notably, the company became the first in Vietnam's confectionery industry to receive the ISO 9001 certification from the British organization BVQI.
In 2001, the company increased its charter capital from VND 25 billion to VND 35 billion, utilizing accumulated capital after two years of operation as a joint stock entity In July, the charter capital was further raised to VND 56 billion By September, the company invested VND 5 billion in a new production line for mooncakes and cookies, capable of producing 2 tons per day In November, the State Securities Commission granted the company a license to list on the stock market, marking its official trading debut on the Ho Chi Minh City exchange.
In December 2001, the Stock Exchange Center marked a significant milestone with the installation of a high-class Hura cream sponge cake production line, boasting a European origin This state-of-the-art facility has an impressive capacity of 1,500 tons per year and represents a total investment of VND 19.7 billion.
In April 2002, Bien Hoa II Confectionery Factory was established in Sai Dong B Industrial Park, Long Bien, Hanoi By October, the factory launched its chocolate production line utilizing advanced British technology, leading to the rapid popularity of Bibica's Chocobella products among domestic consumers By the end of 2002, the company initiated a project to expand its Snack line, boosting production capacity to 4 tons per day.
In 2004, the company invested in an enterprise resource planning (ERP) system to enhance overall management Additionally, it collaborated with the Vietnam Nutrition Institute to research and produce nutritional products, catering to consumers' growing demand for healthy options.
In 2005, the Company, guided by the Vietnam Institute of Nutrition, introduced a range of nutritional products specifically designed for children, pregnant and lactating women, dieters, and individuals with diabetes.
In 2006, a new factory was established on a 4-hectare site in the My Phuoc I industrial zone, Binh Duong province The first phase of investment focused on a production line for high-quality Hura cream cakes, inspired by European standards, with a daily capacity of 10 tons.
In 2007, Bien Hoa Confectionery Joint Stock Company officially rebranded as Bibica Joint Stock Company on January 17 During the Extraordinary General Meeting of Shareholders on September 22, the company revised its plan to issue 9.63 million shares as part of a total of 11.4 million additional shares for the year A significant milestone occurred on October 4, 2007, when Bibica signed a strategic cooperation contract with Lotte, transferring 30% of its total shares, approximately 4.6 million shares, to the partner.
2008: Bibica invested in building 443 Ly Thuong Kiet, HCMC This location became the official headquarters of the Company from the beginning of 2008 In
In March 2008, Bibica held its Annual General Meeting of Shareholders, marking the first participation of major shareholders from Lotte The meeting resulted in the approval of a new Board of Directors, with Mr Dong Jin Park representing Lotte's capital as the chairman Additionally, Mr Truong Phu Chien has served as the Vice Chairman and General Director of Bibica Joint Stock Company since March 1, 2008.
In March 2009, Bibica held its Annual General Meeting of Shareholders, where a new management board was approved, with Mr Jung Woo, Lee representing Lotte's capital, appointed as the Chairman of the Board of Directors.
In April 2009, the Company began constructing a high-class Chocopie production line in Eastern Bibica, a project developed in collaboration with its strategic partner, Lotte Group from Korea By October 2009, the Company invested approximately 5 billion VND to build a dormitory for employees at Bibica Mien Dong in My Phuoc 1 Industrial Park, Ben Cat, Binh Duong, which became operational by March 2010 Additionally, in November 2009, the Company implemented the M-Office electronic office system to enhance management efficiency and reduce administrative costs and stationery usage.
2010: Chocopie line officially came into operation at the end of February 2010;
2011: comprehensively reformed the sales system, opened more distributors, and increased the number of sales personnel Sales in 2011 reached over 1,000 billion for the first time.
In 2012, a significant investment was made in a DMS sales management system, alongside the completion of an evaluation system for the sales force and distributors Additionally, the overall ERP business management system was upgraded to the ERP R12 version, with a total cost of 4 billion VND, officially commencing operations in December 2012.
In 2014, we invested in sales support tools utilizing PDA devices to enhance employee motivation and ensure timely order transfers to distributors Additionally, we implemented an information technology safety system in September 2014 to safeguard our IT infrastructure against potential risks such as power failures, fires, or explosions.
In 2015, the successful implementation of Material Flow Cost Accounting (MFCA) significantly enhanced waste control in production processes By 2016, the company achieved a remarkable sales milestone, surpassing 1,250 billion VND, and was recognized by consumers as a provider of high-quality Vietnamese goods for an impressive 21 consecutive years.
Organizational structure
4 - K.HC: Administration and Human Resources Division
5 - K.KT: Accounting and Finance Division
7 - CÔNG TY BBC BIÊN HÒA: Bibica Bien Hoa One Member Co., Ltd
8 - CÔNG TY BBC MIỀN ĐÔNG: Bibica Mien Dong Co., Ltd
9 - CÔNG TY BBC HÀ NỘI: Bibica Hanoi One Member Co., Ltd
10 - CÔNG TY BBC MIỀN TÂY: Bibica Mien Tay Co., Ltd
Core values, vision and mission
- Providing customers with products with nutritional value, ensuring food safety and hygiene, beautiful and attractive appearance, all for the health and preferences of customers.
- Continuously improve the management to improve the quality of products and services to get the best products and services at the best prices.
- Maintain mutually beneficial relationships with agents, distributors, suppliers and other business partners.
- Comply with state regulations, ensure food hygiene and safety conditions for products manufactured at the company.
- Be socially responsible, make positive contributions to society, protect the environment for the quality of life of the community.
Vision: Vietnam's leading confectionery company
- Consumer benefits: nutritional value and food safety and hygiene
Business sectors
Scope of business: Industrial production and trading of food products and import and export Real estate business buying and selling real estate.
Manufacturing and trading at home and abroad in the fields of cake - candy - dental processing industry, export of bakery - candy - dental products and other goods.
Import equipment, technology and raw materials for production of the Company. Invest in and develop production of new product groups: cereal powder, nutritional powder, beverage powder, candies and tablets.
Bibica currently has 117 distributors, agents and 250 supermarket chains in all provinces and cities nationwide and exports to all markets in Asia, Europe andAmerica.
ANALYSIS OF THE FINANCIAL SITUATION OF BIBICA COMPANY
Block analysis and index analysis
Analyzing financial figures over time is enhanced by presenting the balance sheet and income statement as percentages, offering valuable insights for analysts These percentages can be related to totals like total assets or total sales, or compared to a base year While financial parameters provide part of the financial picture, understanding trends is improved by analyzing omissions Additionally, these analytical methods are especially beneficial for comparing companies of varying sizes, as they standardize each item in the financial statements.
Block analysis involves representing balance sheet items as a percentage of total assets and income statement items as a percentage of sales This method allows analysts to identify structural trends by expressing financial statement items relative to their totals.
Block analysis for balance sheets will give you a very clear picture of changes in asset structure and capital structure.
Index analysis is a technique for evaluating financial statements by allowing managers to compare current items with historical values This method enables analysts to identify and assess trends over time for each item within a report.
Table 2 1: Block and index analysis with company balance sheet
Currency unit (Dong) Block analysis (%) Index analysis (%)
Currency unit (Dong) Block analysis (%) Index analysis (%)
Table 2 2: Block and index analysis with the company's income statement
Currency unit (Dong) Block analysis (%) Index analysis (%)
Net sales from goods and services sold
67 67,83 72,98 70,57 100 87,19 75,50Gross profit from 483.644.701 329.254.876 321.167.969.5 32,17 27,02 29,43 100 68,08 66,41 goods and services sold 907 537 67
Net profit from business activities 110.079.032.
Parameter analysis
The financial health of a business is effectively illustrated by its solvency indicators, which assess the ability to utilize quickly convertible cash assets to fulfill short-term obligations This involves comparing short-term debts with available resources to address them, while also examining the relationship between low-yield fixed assets that can be swiftly converted to cash and the low-cost liabilities that require regular payments This analysis encompasses six key indicators.
JOINT STOCK COMPANY BIBICA BRANCH
Credit revenue Average receivables ¿ customers ¿ 9.86 3.50 10.49 5.18 4.49 turnover
The current solvency parameter is a widely used metric for assessing a company's ability to fulfill its short-term debt obligations, highlighting the conversion of short-term assets into cash relative to short-term liabilities An analysis of Bibica Joint Stock Company's current solvency parameters over the past three years reveals instability, with the ratio increasing from 1.54 in 2019 to 1.67 in 2020, before declining to 1.11 in 2021 This fluctuation indicates varying levels of financial health and liquidity for the company during this period.
The company maintains a strong debt repayment capability, with 1.54 dong of short-term assets available for every 1 dong of short-term debt, increasing to 1.67 dong by 2020 This consistent ratio above 1 over three years indicates a robust financial position.
A higher current ratio often suggests a stronger capacity for repayment; however, it fails to consider the liquidity of individual assets within the Current Assets category To assess a company's solvency more accurately, we utilize the quick ratio, a more stringent financial metric.
This parameter emphasizes assets that can be quickly converted to cash, including cash, negotiable securities, and trade receivables As shown in Table 2.3, Bibica's quick solvency has varied over the years, rising from 1.32 in 2019 to 1.37 in 2020, before dropping to 0.95 in 2021 In 2019, each dong of the company's short-term debt was backed by 1.32 dongs of short-term assets, excluding inventory.
For every VND of short-term debt, there are VND 1.32 in highly convertible assets available for financing, which rose to an index of 1.37 the following year.
Bibica's accounts receivable turnover ratio has shown significant fluctuations over the past three years In 2019, the ratio was 9.86, indicating a strong ability to convert customer receivables into cash However, this figure decreased to 3.50 in the following years, highlighting a notable decline in cash conversion efficiency.
2020 and increased sharply to 10.49 in 2021
The average collection period indicates the number of days sales are held in receivables before being converted to cash Bibica's average collection period has experienced significant fluctuations over the past three years, rising from 36.51 days in 2019 to 102.86 days in 2020, before decreasing to 34.32 days in 2021.
To evaluate the effectiveness of Bibica's inventory management, we analyze the inventory turnover ratio, which varied from 2019 to 2021 In 2019, the turnover was 8.79 rounds, decreasing to 7.05 rounds in 2020, before rising to 9.00 rounds in 2021 This trend indicates a decline in the frequency of inventory conversion into receivables through sales over the years However, Bibica's receivable turnover remains above the industry average, suggesting that the company's inventory management improved in 2021 compared to previous years, demonstrating better inventory maintenance than its competitors.
The inventory conversion cycle indicates the number of days a company's inventory holdings fluctuate annually As shown in Table 2.3, there was a slight increase from 40.96 days in 2019 to 51.06 days in 2020, followed by a decrease to 40.00 days in 2021 This trend highlights an increasing duration of inventory holding times, which requires the company to store inventory for over 40 days Such prolonged inventory storage adversely impacts cash flow and diminishes the company's liquidity.
Table 2 4: Analysis table of debt parameters for the period of 2019-2021
JOINT STOCK COMPANY BIBICA INDUSTRY AVERAGE
Debt-to-equity ratio Total debt
Debt-to-asset ratio Totaldebt
Parameter Long- term debt/Long- term capital
Number of times to guarantee loan interest
This indicator measures the extent to which a company utilizes debt capital, revealing the amount of financing provided by creditors for every dollar contributed by shareholders It also indicates the level of capital that secures a loan.
The formula for calculating the debt-to-equity ratio:
Debt to Equity (RD/E) = Total Debt / Total Equity
Figure 2 1: Debt-to-equity parameters of Bibica 2019 – 2021
Bibica's debt-to-equity (RD/E) ratio, as illustrated in figure 2.1, has fluctuated over the years but consistently remains below 1 This indicates that the company's assets are primarily financed by equity rather than debt.
- In 2019, for every dong of equity, there were VND0,564 long-term loans In other words, creditors provide 0.58 dong of financing for every dollar of capital provided by shareholders.
- This RD/E parameter's ratio is 0.408 in 2020 In other words, 0.408 is insured for a loan for each and every dollar of equity.
- In 2021, for every dong of equity, there will be 0.671 dong borrowed.
- We can see that the company's RD/E parameter in 2020 is lower than in 2019, namely 0.156 lower And RD/E in 2020 is 0.263 lower than 2021.
The fluctuations in overall debt over time can be attributed to an increase in long-term debt, while short-term debt, including payables to sellers and prepayments by purchasers, decreases From 2019 to 2020, equity rises, indicating sufficient corporate capital and minimal external debt, suggesting the company is not under significant financial strain However, from 2020 to 2021, equity declines, and external debt increases, highlighting a shift in the company's financial health.
In 2020 and 2021, Bibica's debt-to-equity ratio was notably lower than the industry averages of 1.245 and 1.547, respectively This indicates that Bibica has maintained a debt-to-equity ratio below 1, suggesting more prudent loan usage compared to its competitors Consequently, this favorable ratio instills confidence in creditors, as it reflects that the company is not relying on excessive debt relative to industry standards.
The debt ratio indicates the extent to which a company's assets are financed through borrowed funds A higher debt ratio signifies greater financial dependence on external sources, which in turn reduces the company's ability to maintain financial independence.
The formula for calculating the debt-to-asset ratio
Debt to Assets Ratio (RD) = Total Debt / Total Assets
Figure 2 2: Bibica's debt-to-asset ratio 2019 – 2021
Based on the figure 2.2 presented above, we see that this parameter has increased and decreased over the years with the ratio of 0.361, 0.290 and 0.401 respectively. Does that mean :
- In 2019, for every 1 dong of public capital, there is 0.316 dong of debt.
- In 2020, for every 1 dong of the company's capital, there is 0.290 dong of debt. And similarly in 2021, for every VND 1 borrowed, there is VND 0.401 in debt.
CONCLUSION
Financial results
Based on reports and analysis of the company's financial data over the past 3 years from 2019 to 2021, it can be assessed that Bibica has a relatively good financial position.
Over the years, the asset structure has shown growth, particularly in long-term assets, which have consistently increased from 2019 onwards In 2020, there was a decrease in the proportion of short-term assets compared to 2019 However, in 2021, the impact of the Covid-19 pandemic led to a further decline in short-term assets, though this did not significantly affect the overall total assets of the enterprise.
In 2021, the company prioritized investments in long-term assets to enhance production efficiency and lower product costs, ultimately aiming for greater stability amid challenging epidemic conditions.
Over the years, equity has increasingly comprised a larger share of the company's total capital, with a financing ratio of 0.5-1, indicating a strong self-financing capability However, the long-term financing ratio has decreased from 1.8 to 1,327, reflecting a decline in equity investment in long-term assets While this reduction may diminish the company's self-financing ability, it simultaneously enhances profitability, allowing the company to generate greater profits from its production and business activities.
Bibica has demonstrated a strong financial position over the past three years, with both current and quick solvency ratios exceeding 1, indicating excess solvency and the ability to meet debt obligations The company's debt-to-total-assets ratio has remained below 1, reflecting low borrowing levels and high financial autonomy Overall, Bibica's robust capacity to cover short-term debts highlights a positive financial outlook that supports its business operations.
Business results have shown growth, as evidenced by net sales indicators However, the profit targets on total assets (ROE, ROA) declined from 2019 to 2021 due to the impact of the Covid-19 pandemic Overall, the company remained profitable, which has facilitated the expansion of its scale and enhanced its position in the domestic market.
Finincial constraints
In addition to the results presented above, the financial situation at Bibica Joint Stock Company cannot avoid the following limitations.
The efficiency of asset utilization within the enterprise remains suboptimal The turnover ratio, which indicates the revenue generated for every dollar spent on assets during the period, highlights this inefficiency.
2019 was 1.2, in 2020 it decreased to 0.79, especially by 2022 due to the impact of the epidemic, which made revenue compared to assets sharply decrease to 0.185.
Second, about inventory and large receivables Short-term receivables in 2020 increased by 128.69% compared to 2019, short-term receivables in 2021 decreased by 40.5% compared to 2020 Inventories in 2021 also increased by 28.2% compared to
In 2020, inventories rose by 8.73% compared to 2019, indicating that businesses struggled to effectively align their production and consumption processes This lack of integration highlights the need for improved strategies in credit sales, debt collection, and addressing product stagnation in the market.
In 2019, short-term debt represented 34.9% of total liabilities, but this figure decreased to 27.92% in 2020 before rising again to 38.1% in 2021 The significant proportion of short-term debt poses challenges for the business, particularly in managing payments, highlighting the need for a balance between short-term and long-term debt.
Despite the positive outcomes of business activities, limitations on certain costs and external factors related to the epidemic have resulted in consistently low profits Notably, profits sharply declined in 2021, falling to 22,400,282,622 VND.
Some solutions to improve the financial strength of the company
After conducting thorough research on BIBICA Joint Stock Company and analyzing its financial status, the group aims to propose several solutions to enhance the company's financial performance.
Fixed assets serve as the foundation of an enterprise, reflecting its production capacity Essential machinery and equipment enhance output and labor productivity while reducing production costs Regular inventory assessments of fixed assets are crucial to identify unusable or unnecessary items, allowing for timely liquidation or sale to recover capital Efficient organization and management of production processes minimize machinery downtime, ensuring synchronization that maximizes equipment capacity, boosts labor productivity, lowers production costs, and ultimately increases business profits.
Effective coordination among the material supply department, engineering department, and factory workshops is essential for successful production planning This collaboration ensures that repair plans are implemented efficiently and that production output can be adjusted promptly in response to market fluctuations.
To enhance the efficiency of receivables management, companies should adjust their sales and collection policies by reducing payment terms to align with industry averages This adjustment must be implemented gradually and based on careful calculations of customer solvency and responsiveness to ensure optimal payment levels Effective receivables management can be achieved by utilizing specific criteria, methods, and models.
+ Average collection period = Accounts receivable / Average sales per day
+ Sorting age of accounts receivable (according to this method, receivables are sorted by length of time to track and take measures to collect debts when they are due)
To assess the balance of accounts receivable, this method ensures that receivables remain unaffected by seasonal sales fluctuations, allowing for a clear view of customers' outstanding debts.
Excessive inventory can result in high storage costs and capital stagnation, ultimately leading to inefficient business operations To mitigate this issue, companies should focus on reducing inventories of raw materials and semi-finished products throughout the production process This can be achieved by strategically organizing the production cycle, closely monitoring each stage, and identifying bottlenecks that contribute to the accumulation of semi-finished goods.
For finished products in stock: The company needs to develop a reasonable consumption plan, avoid stagnation in the warehouse, proactively source goods and minimize unnecessary costs.
Bibica currently has a higher proportion of short-term debt compared to long-term debt, prompting the CFO to consider converting short-term debt into long-term debt to capitalize on favorable long-term interest rates amid future inflation forecasts Given the company's strong financial position, transitioning to long-term income bonds or loans can effectively lower the short-term debt ratio and alleviate repayment pressures This strategic move not only enhances long-term capital for investment and business expansion but also improves capital turnover, mitigates risks, and addresses maturity discrepancies.
- Revenue and expenses are two factors that directly affect the profit of a business To increase revenue, the company can take the following measures:
To enhance market reach and attract new customers, it is crucial to diversify the customer base and bolster the company's reputation Establishing a credit policy for long-term clients or those with strong creditworthiness is essential, taking into account customer behavior and their debt repayment history, as reflected in annual reports and the broader economic context A well-structured credit policy can include options for deferred payments, installment plans, and flexible payment terms, ultimately driving revenue growth.
To enhance the management of production and business expenses, it is essential to thoroughly evaluate the economic and technical standards, as well as the consumption norms for raw materials used in product manufacturing Additionally, establishing clear mechanisms and terms for indirect costs—such as telephone, electricity, water, stationery, conference expenses, and travel costs—is crucial for effective cost control.
Develop a reward and penalty mechanism related to production costs and product production costs.
Good control over the inputs.
Inform and explain fully and clearly the difference between cost control and cost reduction to create a sense of savings for employees.
1 http://www.bibica.com.vn/templates/pictures/files/98_BAO%20CAO%20TAI
%20CHINH%20HOP%20NHAT%20NAM%202019%20-%20[V].pdf
2 http://www.bibica.com.vn/templates/pictures/files/73_BBC%20-%20BCTC
3 http://www.bibica.com.vn/templates/pictures/files/55_20220331%20-BBC-
CÔNG TY CỔ PHẦN BIBICA BẢNG CÂN ĐỐI KẾ TOÁN HỢP NHẤT
TÀI SẢN NGẮN HẠN 841.532.625.962 717.590.458.112 578.230.851.763 Tiền và các khoản tương đương tiền 403.522.192.255 112.811.737.101 202.816.924.776 Đầu tư tài chính ngắn hạn 133.326.721.732 97.438.671.054 5.383.495.065 Các khoản phải thu ngắn hạn 152.453.251.292 348.649.851.196 208.097.331.170
Tài sản ngắn hạn khác 36.152.641.425 32.473.522.128 76.329.585.168
Bất động sản đầu tư - - 22.513.933.940
Tài sản dở dang dài hạn 370.513.998.729 2.450.489.091 201.918.552.924 Đầu tư tài chính dài hạn - 200.000.000.000 -
Tài sản dài hạn khác 165.896.554.355 148.342.031.793 229.814.973.511
CÔNG TY CỔ PHẦN BIBICA BÁO CÁO KẾT QUẢ HOẠT ĐỘNG KINH DOANH HỢP NHẤT
Doanh thu bán hàng và cung cấp dịch vụ 1.513.816.363.359 1.228.762.996.367 1.102.529.287.749 Doanh thu thuần về bán hàng 1.503.561.238.319 1.218.556.328.126 1.091.174.440.134 Giá vốn hàng bán (1.019.916.536.412) (889.301.451.589) (770.006.470.567) Lợi nhuận gộp về bán hàng 483.644.701.907 329.254.876.537 321.167.969.567
Doanh thu hoạt động tài chính 19.814.936.319 24.488.490.348 13.011.769.079
Chi phí tài chính (1.769.899.272) (7.260.732.106) (3.519.791.760) Lợi nhuận thuần từ hoạt động kinh doanh 110.079.032.781 28.366.706.524 23.912.383.265 Tổng lợi nhuận kế toán trước thuế 120.541.811.073 122.849.395.632 29.892.204.851 Lợi nhuận sau thuế