Tiểu luận tài chính doanh nghiệp 2 financial analysis of hoa phat group

Untitled TRƯỜNG ĐẠI HỌC TÀI CHÍNH MARKETING KHOA TÀI CHÍNH NGÂN HÀNG TIỂU LUẬN TÀI CHÍNH DOANH NGHIỆP 2 FINANCIAL ANALYSIS OF HOA PHAT GROUP Sinh viên thực hiện Nguyễn Dương Phương Thảo Mã số sinh viê[.]

TRƯỜNG ĐẠI HỌC TÀI CHÍNH MARKETING KHOA TÀI CHÍNH- NGÂN HÀNG

TIỂU LUẬN TÀI CHÍNH DOANH NGHIỆP 2 FINANCIAL ANALYSIS OF HOA PHAT GROUP

Sinh viên thực hiện: Nguyễn Dương Phương Thảo

Mã số sinh viên: 1921006381 Lớp: CLC_19DTC04

Gia Lai, ngày 20 tháng 12 năm 2021

I.Introduction 1

II.The general information 1

III Common Financial Ratios 1

1.The Liquidity 1

a.Formula 1

b.Information table 2

2. Financial leverage 2

a.Formula 2

b.Information table 2

3.Turnover 3

a.Fomula 3

b.Information table 3

4.Profitability 4

a.Formula 4

b.Information table 4

5.Market Value Ratios 4

a.Formula 4

b.Information table 5

IV A quantitatively financial analysis 5

1.Time series analysis 5

a.The Liquidity 5

b.Financial leverage 6

c.Turnover 6

d.Profitability 7

2.Cross-sectional analyse 8

a.The Liquidity 9

b.Financial leverage 9

c.Turnover 9

d.Profitability 10

V Conclusion 10

I Introduction

In a business, the analysis of financial statements is a very important thing Not only helps businesses re-evaluate the process and results of their operations but also helps managers make long-term and effective development plans For an individual investor, analyzing a company's financial statements also helps to compare organizations operating in the same industry from which to make investment decisions

II The general information

Name: Hoa Phat Group

Hoa Phat corporation was established in 1992 Beginning a company that trades in construction machines

Currently, Hoa Phat Group has 11 member companies, operates in 05 spheres such as: furniture, steel pipes, constructional steel, refrigeration, real estate and agriculture and become a leading industrial production corporation in Vietnam

Especially, steel production is the core spheres that accounts for 90% of the Group's revenue and profit With a capacity of 8 million tons of crude steel per year, Hoa Phat is the largest steel producer in Southeast Asia

In the sphere of furniture, the company is also a reputable brand with a high market share in Vietnam Not only many big projects but also taking the first steps in real estate reinvestment in Khanh Hoa, Can Tho

In November 2007, Hoa Phat Group officially listed its shares on the Vietnam stock market with stock code HPG Nearly 30 years of establishment, Hoa Phat Group has affirmed its position, even more, when it is in the VN30 with more than 4.47 billion shares being issued with

a single charter capital of 44.7 trillion dongs

III.Common Financial Ratios

1.The Liquidity

a.Formula

Current Ratio = Current liabilitiesCurrent assets

Quick Ratio = Current assets−InventoryCurrent liabilities

Cash Ratio = Cash

Current liabilities

b Information table

747

975

287

696

2.Financial leverage

a.Formula

Total debt ratio = Total debt

Total assets

Debt-equity ratio = Total debt

Total equity

Equity multiplier= Total assets

Total equity

Times interest earned ratio = EBIT

Interest

Cash coverage ratio = EBITDA

Interest

b Information table

600

623

223 511

Times interest

earned ratio

3.Turnover

a.Formula

Inventory turnover= Cost of goods sold

Inventory

Inventory turnover

Accounts receivable

Receivables turnover

Total assets

Capital intensity = Total assets

Sales

b Information table

Cost of goods

sold

166

52 473

71 214

932

16 764

22 850

580

64 678

91 279

623

90 000

116 644

Days’ sales in 106.7

2

inventory

Days’ sales in

receivables

4.Profitability

a.Formula

Profit margin= Net income

Sales

Return on assets (ROA) = Net income

Total assets Return on equity (ROE) = Net income

Total equity

b Information table

580

64 678

91 279

623

90 000

116 644

Return on assets

(ROA)

Return on equity

(ROE)

5.Market Value Ratios

a.Formula

Price- earnings ratio = Price per share

Earnings per share

Market-to-book ratio = Market value per share

Book value per share

EV multiple = Enterprise valueEBITDA

b Information table

IV A quantitatively financial analysis

1.Time series analysis

a.The liquidity

From 2018 to 2020, current ratios were all above 1, this ratio was stable because the current assets and current liabilities were both maintained at a stable difference This showed that the group's debt payment ability was secure and financial capacity was positive

From 2018 to 2019, quick ratios were all below 0.5, showing that debt payment was unstable But in 2020, capacity had improved when it rises to 0.59, when current assets were increased It made debt payment was improving

Cash Ratio, this results in a cash ratio ranging from 0.11 to 0.26 Different from the usual ratios from 0.5 to 1 This is not necessarily a bad thing Because this corporation was a manufacturing corporation so inventory accounts for a large proportion of current assets

b Financial leverage

In financial leverage, there are many ratios, but I choose the debt-equity ratio and times interest earned ratios

According to many opinions, the times interest earned ratio was lower more better In the year 2018 to 2020, the times interest earned ratio decreased significantly from 19.65 to 8.0, which can be a positive sign

Whereas the debt-equity ratio in 2018 was at 0.93 This showed that debt was lower than equity but over the next 2 years the ratio increases to 1.13 and 1.22 respectively It showed that debt was dramatically increases, which was a negative sign

c.Turnover

In the year 2018 to 2020, the inventory turnover had decreased slightly from 3.42 to 3.12 showing that the group was showing signs of slowing down sales compared to the previous period of the same period, but not significantly Because steel prices were rising, combined with the impact of COVID-19 This had a significant effect on this index

Receivables turnover at a high level, fluctuating at 25 to 27 This showed that the group's solvency policy was quite good

Although, the inventory turnover and receivables turnover were high, total asset turnover was

at a low level, not more than 1 and tent to decrease This showed that the company was an inefficient use of assets

d Profitability

All three indexes were trending up and down Because in 2019, the economy was negatively impacted by COVID, making every corporation face a difficult situation Causes the indexes to plummet up to 5%

But by 2020, the group's recovery and return to normal operations, sometimes stronger than before, had caused net income to have improved numbers It recovered markedly and was almost higher than before

The most obvious is ROE, almost recovering and increasing compared to 2018 from 21% to 23% The other two indexes were no less competitive when profit margin recovered to 14.99% compared to 15.4% in 2018 ROA increased at 10.3% nearly 11% in 2018

2.Cross-sectional analyse.

In 2020

(HPG)

Dai Thien Loc Corporation (DTL)

Hoa Sen Group (HSG)

1 The Liquidity

2 Financial leverage

Times interest earned

ratio

3 Turnover

Days’ sales in

inventory

Days’ sales in

receivables

4 Profitability

Return on assets

(ROA)

Return on equity

(ROE)

a The liquidity

From the information table, we can see that the current ratio of the 3 enterprises was above 1, the index difference was not significant This showed that all three companies had good control over their debt payment ability

For the quick ratio, Hoa Phat almost held the advantage when only this company is above 0.5 This showed that the company's solvency was more stable than that of competitors Because Hoa Phat's inventory increased sharply to VND 26,000 billion, far ahead of the other two companies with the reduced inventory

b Financial leverage

With financial leverage, all three companies were above 1 in the debt -equity ratio This showed that the debt was more than the owner's investment capital This was a bad number that needs to be improved

In the total debt ratio, we see that Hoa Phat was leading when total assets are more than total liabilities, ensuring the ability to pay debts and payments Clearly demonstrate the company's solid capabilities

Although the times interest earned ratio of Hoa Phat was much higher than the other two companies But in terms of scale, when Hoa Phat's EBIT was up to 13 500 billion VND Meanwhile, DTL and Hoa Sen only stopped at 25 and 4 900 billion dongs

c.Turnover

Hoa Phat's inventory turnover was 3 times higher than DTL but lower than Hoa Sen This did not mean that Hoa Phat's sales were lower than Hoa Sen's, because in 2019-2020, it had increased by more than VND 27 000 billion, while Hoa Sen had decreased The fact that Hoa

Phat's inventory turnover was at that level, because the company had increased its inventory to VND 26 000 million

Hoa Phat's receivable turnover was higher than that of its competitors, which shows the company's efficiency in collecting debts from customers as well as not having too non-performing loan This also freed up credit for future

Although the inventory turnover and the receivable turnover were higher than that of the other two companies, Hoa Sen's Total asset turnover was still higher, showing its efficiency in revenue generation Although Hoa Phat had a higher revenue than its competitors, in Total asset turnover, it only stopped at 0.78

d Profitability.

Overall, after a year affected by Covid-19 Businesses still recovered and developed, but only DTL slowed down when ROA and ROE were negative

From the information table, we can see that Hoa Phat was increasingly asserting its leading position with impressive profit margin High profitability, generating more profit and controlling cost effectively than the other two companies

Not only that, with high ROE also helped Hoa Phat score in the effective use of shareholder capital, which helped investors have good evaluations of the company

V Conclusion

By learning the basic information, calculating and understanding the basic financial indicators of Hoa Phat company This can help managers know that there are limitations to overcome as well as advantages to promote in the company's financial system For example, why revenue increased sharply but total asset turnover was not positive Or how to use financial leverage effectively

Not only that, financial analysis also helps businesses have more detailed investment plans in the future Quantitative comparison with companies in the same industry, or a time series to know how the company is performing to have effective operating options

REFERENCES

1 Coporate Finance 11th edition

4 https://finance.vietstock.vn/DTL/tai-chinh.htm?tab=CDKT