Strenghthening working capital management at bao minh confectionary joint stock company

4 CHAPTER 1: CURRENT SITUATION OF WORKING CAPITAL MANAGEMENT AT BAO MINH CONFECTIONERY JOINT STOCK COMPANY .... 13 2.1 C ONDITIONS , SCALE OF WC STRUCTURE AT THE COMPANY...13 C URRENT

TABLE OF CONTENTS

LIST OF TABLES

STATEMENT OF AUTHORSHIP

ACKNOWLEDGEMENTS

INTRODUCTION 1

1 THE IMPORTANCE OF SUBJECT 1

2 INTEREST OF SUBJECT 1

3 WORK ENVIRONMENT 1

4 PLAN AND CONTENT OF THE REPORT 2

PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC 4

CHAPTER 1: CURRENT SITUATION OF WORKING CAPITAL MANAGEMENT AT BAO MINH CONFECTIONERY JOINT STOCK COMPANY 4

1.1 O VERVIEW OF THE C OMPANY 4

1.1.1 M AIN FEATURES OF THE C OMPANY 4

1.1.2 E STABLISHMENT AND DEVELOPMENT PROCESS 4

1.2 F UNCTIONS , MISSIONS AND ORGANIZATIONAL STRUCTURE 5

1.3 C ONSUMPTION MARKET AND COMPETITIVE POSITION 7

1.4 F INANCIAL SITUATION OF THE C OMPANY 7

CHAPTER 2: WC MANAGEMENT AND ASSESSMENT 13

2.1 C ONDITIONS , SCALE OF WC STRUCTURE AT THE COMPANY 13

C URRENT WORKING CAPITAL SITUATION AND ALLOCATION OF WORKING CAPITAL 13

2.2 A CTUAL SITUATION OF WORKING CAPITAL SOURCE AND WORKING CAPITAL MANAGEMENT 16

2.2.1 D ETERMINATION OF WORKING CAPITAL NEEDS 19

2.2.1 W ORKING CAPITAL IN CASH MANAGEMENT 20

2.2.2 A CTUAL SITUATION OF MANAGING RESERVE INVENTORY CAPITAL 24

2.2.3 R ECEIVABLES MANAGEMENT 26 Khóa luận tốt nghiệp Kinh tế

2.3 G ENERAL ASSESSMENT OF WC MANAGEMENT OF THE C OMPANY 34

2.3.1 A CHIEVED RESULTS 34

2.3.2 D ETAILS OF WORKING CAPITAL MANAGEMENT : 34

PART 2: IMPROVING WC MANAGEMENT AT BAO MINH JSC 37

CHAPTER 1: FUTURE MISSIONS OF BAO MINH JSC 37

1.1 O BJECTIVES AND DEVELOPMENT ORIENTATION OF B AO M INH C ONFECTIONERY J OINT S TOCK C OMPANY 37

1.1.1 S OCIO - ECONOMIC CONTEXT 37

1.1.2 G OALS AND DEVELOPMENT ORIENTATION 38

CHAPTER 2: SOLUTIONS TO STRENGTHEN THE WORKING CAPITAL MANAGEMENT AT BAO MINH CONFECTIONERY JOINT STOCK COMPANY 40

2.1 P ROACTIVELY PLAN AND DETERMINE REASONABLE WORKING CAPITAL NEEDS 40

2.2 D EVELOP SAFE , STABLE , FLEXIBLE AND EFFECTIVE FUNDING POLICIES 41

2.3 E STABLISH A REASONABLE WORKING CAPITAL STRUCTURE 42

2.4 S TRENGTHEN CASH MANAGEMENT AND SOLVENCY 42

2.5 S TRENGTHEN THE MANAGEMENT AND COLLECTION OF RECEIVABLES 43

2.6 R EGULARLY MONITOR , ANALYZE AND EVALUATE THE EFFICIENCY OF WORKING CAPITAL 44

2.7 C ONDITIONS FOR IMPLEMENTING THE SOLUTIONS 45

2.7.1 T HE C OMPANY : 45

2.7.2 T HE S TATE : 46

CONCLUSION 47

REFERENCES

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LIST OF TABLES

Page

TABLE 1.2 LIABILITIES AND EQUITY FLUCTUATIONS PERIOD 2017 AND 2018 10

TABLE 1.4 SCALE AND STRUCTURE OF WORKING CAPITAL OF THE COMPANY PERIOD 2017 –2018 15TABLE 1.5 DETAIL OF WORKING CAPITAL SOURCE OF THE COMPANY YEAR 2017 – 2018 18

TABLE 1.7 STRUCTURE AND MOVEMENT OF CASH AND CASH

TABLE 1.12 COMPARISON OF CREDIT CAPITAL AND THE PROPERTY

CAPITAL OF THE COMPANY

30

TABLE 1.13 EFFICIENCY ASSESSMENT OF RECEIVABLES IN 2017 -

2018

31

TABLE 1.14 PERFORMANCE EVALUATION AND EFFICIENCY OF

WORKING CAPITAL USAGE FOR 2017 – 2018

STATEMENT OF AUTHORSHIP

I hereby declare that I am the sole author of this graduation report Each and every data and results stated in this graduation report are sincere and generated from the practical situation of the internship organization

I have not used any sources other than those listed in the bibliograph and identified as references I declare this to be my own work , and that it has not been submitted before or will not be submitted at any other institutions, module courses or examinations in seek of obtaining a degree.

Author of the graduation thesis

Student

Anh Thuc Trinh

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In the course of studying and writing thesis at the Academy of Finance, University of Toulon in pursuing for a Master degree in Corporate Finance and Management Control, besides my own efforts, I was enthusiastically taught and guided by dedicated professors from both institutions I would like to send my sincere thanks to TS Ta Huy Hung, who has dedicated, thoughtful guide me throughout the process I study, while gave me initial ideas to structure and wrap my head to the topic.

I would like to express my deep gratitude to all the professors who taught and helped me throughout the program I would also like to thank all the leaders and individuals at Bao Minh Confectionary Joint Stock Company for assistance and supplying me with datas of financial statements which enabled me to work through the thesis.

Lastly, I would like to thank my parents, and my beloved partner for all the encouragement, support, patience, understanding throughout the entirety of my academic life I truly love you.

Regards,

Author of the graduation thesis

Student

Anh Thuc Trinh

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1 The Importance of subject

Vietnam's economy is in the midst of transformation and operation under themechanism of free trade, market opening and integrating with the global economy Inparticular, capital is considered as the heart for every business – the condition ensuring thecontinuity of producing and business activities In light of the highly competitive marketmechanism today, profit has always been the top priority ; therefore, optimal solutions areneeded to best utilize and manage capital spending, ensure that it is used in the most efficientway for producing and business activities to take place smoothly

One of the crucial parts of business capital is working capital, which is the beginningand ending phase of an operation process Under the picture of increasing globalisation anddrastic market competition, the working capital demand for businesses is increased, while theability to create and raise capital of enterprises is limited Therefore, the ultimate requirementfor businesses are to effectively manage working capital usage upon respectful principles forfinancial, credit and law-abiding

2 Interest of subject

When coming to realization the importance of working capital in a company, I amstrongly interested in understanding more about the management of working capital in myinternship placement Bao Minh Joint Stock Company is expanding its scope ofmanufacturing and wholesale activities of confectionary and related food products in Ha Noi

In the context that the company currently has no designated mechanism and department forworking capital mangement; therefore, the Board of Directors of the Company is highlyinterested in the construction of this system Stem from curiousity, I am determined to unravelthe mystery or intriguing thing behind

3 Work environment

I first worked at the company as a part-time marketing associate, where my mainresponsibility was to strenghthen the company’s Marketing and PR platform as well asdeveloping the company’s online website During my working experience there, I realised thatthe biggest problem with the company, as mentioned above, is the unstructured mechanism ordepartment to manage on working capital This has impact sales, profit, and market position ofthe company, while strangles the development of the brand compared to its competitors inVietnam

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In light of the above-mentioned reasons, the study of topic: "Strenghthening working capital management at Bao Minh Confectionary Joint Stock Company" is practical I am

hopeful that by analysing the Company’s working capital management management andproviding some feasible solutions, something significant could be further executed in the future

4 Plan and content of the report

- Analyze and assess the current working capital management situation at Bao MinhJoint Stock Company to determine the of the shortcomings and limitations in using theworking capital of the company

- Proposing solutions and conditions for working capital management of Bao MinhJoint Stock Company

- Objectives of the study: Understanding the situation of working capital management

at Bao Minh Confectionery Joint Stock Company (“Bao Minh JSC”) On the theoretical basiscombining reality of working capital management in the company to determine appropriatesolutions to enhance the working capital management efficiency

- Research scope:

+ Space: Research working capital and current situation of working capitalmanagement at Bao Minh JSC

+ Period: Financial situations of the Bao Minh JSC in 2017, 2018

+ Data: Accounting books, Financial Statements of Bao Minh JSC year 2015,

2016, 2017, 2018

- Information sources Mostly secondary information: collecting information from the accounting-financedepartment of Bao Minh JSC, knowledge learned at school, study relevant documents,professor's material while consulting directed instructor

- Data collection method+ Preliminary research: learn about the internship - Bao Minh Confectionery Joint StockCompany and collect information and financial statements of the Company

+ Official research: Based on the Company's financial statements, collected andconducted research and analysis ; specialized documents learned in school

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- Structure of the topic

PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC

Chapter 1: Currrent situation of Working capital management at Bao Minh

Confectionery Joint Stock Company.

Chapter 2: WC management and assessment.

PART 2: IMPROVING WC MANAGEMENT AT BAO MINH JSC

Chapter 1: Future missions of Bao Minh JSC.

Chapter 2: Main solutions to enhance working capital management at Bao Minh

Confectionery Joint Stock Company.

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PART 1: ANALYSIS OF WC MANAGEMENT AT BAO MINH JSC

CHAPTER 1: Current situation of Working capital management at Bao Minh

Confectionery Joint Stock Company

1.1 Overview of the Company

1.1.1 Main features of the Company

General information about the company:

o Company name: Bao Minh Confectionery Joint Stock Company

o Legal representative: Director Ngo Thi Tinh

o Main business lines of the Company are:

▪ Manufacture of cocoa, chocolate and sugar confectionery;

▪ Other accommodation;

Detail: provide temporary or long-term accommodation facilities are single rooms, shared rooms or dormitories such as student halls, dormitories of universities; boarding houses, dormitories for pupils, students, foreign laborers and other subjects, accommodation on mobile cars, tourist tents;

▪ Restaurants and mobile food service activities;

▪ Renting and leasing of motor vehicles;

▪ Travel agency activities;

▪ Tour operator activities;

▪ Freight transport by road;

▪ Non-specialized wholesale trade;

1.1.2 Establishment and development process

Bao Minh Confectionery Joint Stock Company was established and operated from23/05/2006 under the business registration certificate No 0101966872 issued by Hanoi CityDepartment of Planning and Investment for the first time Charter capital: VND60,000,000,000

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After nearly 15 years of establishment, the Company has lived up their mission of

“Preserving and promoting Vietnam's culinary heritage, acquire and inherited national

quintessence and advanced processing technology advancing, bringing joy, nutrition and health” through manufacturing traditional confectioneries with a mixture of traditional and

modern secrets to create high quality products that meet the market’s demand of traditionalconfectionery market in Vietnam and international The Company strongly aligns with thelaws while adheres to regulations and having achieved remarkable achievements; honorablyreceived certificates of merits for product quality, efforts and contributions to thedevelopment of the industry inspecific and the country as a whole

1.2 Functions, missions and organizational structure

o Restaurants and mobile food service activities;

o Renting and leasing of motor vehicles;

o Travel agency activities;

o Tour operator activities;

o Freight transport by road;

o Non-specialized wholesale trade;

Main products

o Traditional treats: Beans cake, Sesame cakes, Sticky candy;

o Traditional confectionery and bakery products: Banh Com, Banh Phu The,Moon Cake, Sticky cakes, Banh Khao;

o Manufacturing and packaging dried fruits, o mai;

o Manufacturing products served in festivals, conferences, weddings in restaurantsand hotels;

o Wedding ceremony and wedding decoration services;

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o Venue decoration and renting

Organization structure and description of key positions

Board of Directors The Board of Directors elected one person to be the Chairman of the Board of Directorsholding the following rights and duties: Formulating strategies, medium-term developmentplans and annual business plans for the Company; Organizing the approval of resolutions ofthe Board of Directors related to issues; supervised and directing the Director and othermanagers in running the company's daily business

▪ General Director:

GD runs the daily business of the company; under the supervision of the Board ofDirectors; responsible to the Board of Directors and the law for the implementation someassigned rights and obligations: Deciding on issues related to the company's daily business,organizing the implementation of the Resolution of the Board of Directors at highestefficiency, organize the implementation of the company's business plans and investmentplans, Decide on salaries and other benefits for employees in the company, etc

▪ Deputy General Director:

Responsible to the Chairman of the Board of Directors and the Director for themanagement of the manufacturing and whole-saling activities of the company, such as:production planning, production supervision, quality standards, recommendations ofproduction technology Supervised Business Block, Southern Branch andFinancial/Administration Division

▪ Financial and Accounting Division:

Recording, calculating, reflecting the situation of rotation and use of assets, supplies,capital, processes and results of production and business activities; Provide data anddocuments for the production and business management, financial statements, statistics andtax finalization of the company; Making plans of capital sources and annual capital use; Cashmanagement, salary payment, bonuses,

▪ Production Block:

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Maintain the quality of the end products; Actively propose to solve difficulties andproblems in the production process; Design, supervision the manufacturing chain; Technicalinspection and quality control.

1.3 Consumption market and competitive position

Consumer market: The company's customers are mainly located in big cities (Hanoi

and Ho Chi Minh City), as well as exported to other countries such as: China, Myanma, Laos,Cambodia, Thailand, Japan, EU The Company also focuses on nationwide distribution tosupermarket chains, agencies and enterprises

Competitive position: Directed competitors in the industry are: Hanabaco JSC, Hai Ha

Co JSC, Kinh Do JSC, These are the major competitors of the company However, with thepolicy of price competition, priority on product quality and food safety standards, theCompany has increasingly gained market share In addition, growing capital of the companyhas also helped expanding its operations and increase its competitiveness in the market

1.4 Financial situation of the Company

a Assets

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TABLE 1.1: ASSET FLUCTUATIONS PERIOD 2017 AND 2018

At the end of the year 2018: During 2017 and 2018, Long-term asset increases at 9.27%,while short-term assets decreases at 11.77% The company has shifted its investment to long-termassets In short-term assets, the items that account for the largest proportion are Short-termreceivables and Inventories, total account for 87% of short-term assets Tangible fixed assetsaccount for 74% of long-term assets.

b Liabilities and Equity

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TABLE 1.2: LIABILITIES AND EQUITY FLUCTUATIONS PERIOD 2017 AND 2018

Unit: Million Dong

3 Taxes and payable to state budget 685 6.20% 651 6.31%

(34)

(4.96%)

II Long term liabilities

(Source: Balance Sheet period 2018)

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Based on 1.2 and 1.3, we can see that:

The company has a total capital at the end of 2018 of more than VND 110 billion, adecrease of around 7 billion from the beginning of 2018 The proportion of debt to equity in 3consecutive years from the end of 2016 to the end of 2018 was quite consistent However, at theend of 2018, the proportion of equity of the company increased, accounting for 58% of the totalcapital The reason is that the liabilities decreases by 6 million, while equity stays consistent.Specifically:

Short-term debt accounts for a very high proportion of total liabilities

By the end of 2018, current liability accounted for 34%, a slight decrease of VND 3.6billion, equivalent to 9.4% At a glance, most of the liabilities such as the number of short-termloans, taxes and other payables has decreased; payables for employees; however, increasedslightly In addition, prepayment and short-term account payable have decreased significantly.Equity at the end of 2018 slightly decreased both in absolute and relative terms.Specifically, by the end of 2018 the company's equity reached nearly VND 103 billion Thereason is that the owner has deduct a amount of charter capital to better operate the company

Regarding the results of production and business activities

In 2017, the company achieved an after-tax profit of nearly VND 78 million, down nearlyVND 300 million compared to 2016, with a decrease of 382% The reason is due to the difficulteconomic context Specifically:

Sales of goods and services in 2017 increased by more than 14 billion (equivalent to 14%) compared to 2016

The cost of goods sold of the company in 2017 increased slightly at VND 2 million, equivalent to an increase of 3%

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10 Net income from business

15 Current corporate income tax

16 Deferred corporate income tax

TABLE 1.3: BUSINESS SITUATION IN 2016-2018

Unit: Million Dong

(Source: Financial Statement period 2017, 2018)

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CHAPTER 2: WC MANAGEMENT AND ASSESSMENT

2.1 Conditions, scale of WC structure at the company

Current working capital situation and allocation of working capital

Working capital is an important component of capital, an indispensable condition of themanufacturing process; therefore, the management of working capital is essential and directlyaffect the development of the company

Equity at the end of 2018 increased sharply both in absolute and relative terms.Specifically, by the end of 2016, the company's equity reached nearly VND 370 billion Thereason is that the owner has contributed an additional VND 225 billion of charter capital toexpand the construction activities of the company This is a positive sign of the company,showing that the potential for development in the coming years is enormous

As shown in Table 1.7, we see that the Company's working capital at the end of 2017 wasVND 65,679 million, at the end of 2018 was VND 57,947 million, an decrease of VND 7,732million corresponding to an decrease of 13% compared to the end of 2017 As such, the size ofthe working capital of the company has slightly decreased at the end of 2018 There is a decrease

as a result of the change in the value of the components that make up WC such as cash and cashequivalents, short-term receivables, inventories and other short-term assets These componentsoften fluctuate over the years From there, the structure of each type in the WC also changes

 Cash and cash equivalents: Among working capital items, cash and cash equivalents

make up the third largest value and proportion The cash capital at the end of 2018 accounted for5.25% of the Company's total working capital and was higher than the end of 2017 (4.73%) Atthe end of 2018, cash was VND 3,041 million, down VND 66 million compared to the end of

2017, corresponding to a decrease of 0.52% We can see that the company has a small amount ofcash, accounts for a very low proportion of total working capital and is on a downward trend,which may affect the solvency of the company in the near future The company should reconsiderits cash reserve policy to ensure solvency

 Short-term receivables: The second most valuable item in WC items is receivables By

the end of 2017, short-term receivables were valued at VND 13,641 million, equivalent to20.77% This value continued to increase to VND 15,663 million at the end of 2016, accountingfor 27.03% of the working capital structure, up 6.26% over the previous year This criterionreflects the working capital that the Company is occupied by customers, organizations and

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individuals in the course of carrying out production and business activities From the above data,

we can conclude that the company's occupied working capital is currently relatively high Theuse of capital by customers is a policy to increase sales, but this is also one of the causes ofstagnant working capital, causing the Company to reduce the amount of capital put into businessoperations Therefore, the Company should take measures to improve the efficiency of debtcollection, tighten selling policies to customers, control the amount of capital appropriated tolimit the risk of increasing overdue bad debts or unable to collect debt because customers areunable to pay or default, causing loss of capital to the Company

 Inventories: The largest proportion of working capital structure is inventories This item

tends to increase over time as the company proceeds to expand its inventory to be able to satisfythe market’s demand In addition, due to the high competition with other’s companies as well asinstability of pre-made ingredients, the company also made more pre-made products as well asstore more ingredients This is consistent with the characteristics of a company that is expandingand growing in the food industry However, the company also needs to consider furtherpromoting the liquidation of inventories, avoiding too big risks when the market fluctuates Bythe end of 2018, inventories reached VND 34,822 million, accounting for 60.09% of theCompany's total working capital

 Other short-term assets: Other short-term assets in recent 2 years have small value and

account for a negligible proportion, about 7.63% of the total assets, little effect on the structuralchange of the VL in the period this By the end of 2018, other short-term assets reached VND4,42 million

From the general analysis, in 2018, the Company's working capital structure was mainlyconcentrated on short-term receivables and inventories However, for a more complete anddetailed assessment, it is necessary to go into specific analysis of each item It can be seen thatsuch working capital structure for a company in a food industry is quite reasonable However, weneed to take a closer look so we can see what is not really good in the actual situation of theworking capital structure of the company

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TABLE 1.4: SCALE AND STRUCTURE OF WORKING CAPITAL OF THE COMPANY PERIOD 2017 –2018

Unit: Million Dong (Source: Balance Sheet period 2018)

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2.2 Actual situation of working capital source and working capital management

The Company's source of working capital includes the contributed capital of its members,capital from retained earnings of production and business activities, external mobilizationthrough financial markets, etc Considering the fluctuation of WC source, we classify this by

“time of capital mobilization” and “capital usage” According to this criterion, source of WC isdivided into 2 categories: Permanent WC source and temporary WC source

In particular, the source of permanent working capital (also known as net working capital NWC) is determined as follows:

-NWC = Long-term capital - Long-term assets

Or NWC = Short-term assets - Short-term liabilities

Based on the balance sheet of 2018, we have:

At the beginning of year 2018:

recognized that the Company is adopting a third funding model (All fixed assets and part of

permanent current assets are guaranteed by permanent WC, the remaining permanent current assets and all temporary current assets are guaranteed by temporary WC) This is a rather

proactive and flexible policy, lowering the cost of capital usage, but the Company's risk is higher

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GRAPH 2.8: WORKING CAPITAL SOURCE OF THE COMPANY YEAR 2017 – 2018

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Year 2015 Year 2016 Year 2017 Year 2018

Permanent WC source Temporary WC source

Through tables 2.6 and Figure 2.9, we see that by the end of 2018 , the Company has usedVND 57,947 million to invest in current assets, by the end of 2018 investments in current assets

decreased by 7,732 million, equivalent to a rate of 11% Permanent WC source also decreased by

VND 4,058 million corresponding to an decrease of 1.6%, temporary WC source increased by

VND 3,674 million, the rate increased by1.6% At a glance, the proportion between permanent

and temporary WC is stable, although the Company has a tendency to reduce permanent WC

source down through years This is reasonable with the nature of the Company as a confectionery

(Source: Balance Sheet period 2018)

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2.2.1 Determination of working capital needs

To ensure that the business operation of the business is continuous, a certain amount ofworking capital is necessary to meet the requirements of procurement of materials and supplies,

to offset the difference between receivables and payables between businesses with customers andsuppliers Accurately determine the needs for the regular working capital in accordance with thesize and business conditions is essential yet complicated It is important to determine the workingcapital needs because excessive working capital fund will become waste and reduce theefficiency of working capital usage, while insufficient working capital fund hurts the operation ofbusinesses at certain degree, or even suspend operations

In fact, Bao Minh JSC has no separate financial management department at themoment Working capital management is currently assigned to the Finance andAccounting Department, but this department lacks individuals with high professionalexperise in financial management This put significant impacts to commodity reservesplan, sales plan, debt collection, production of the company In 2017, this division usesindirect method to forecast Working Capital Source year 2018 In detail, the companyrelies on revenue plan and WC turnover rate in 2017 to calculate The method is asfollows:

According to the statistics from 2017, we have:

Net Revenue = VND 101,393 million Average Working Capital= VND 68,152 million

 Working Capital Turnover Rate = 1.49

In 2017, WC turnover rate of the company turns at a slow speed at 1.49 a year, Workingcapital ratio measures a company efficiency in using working capital to support sales Within thecompany’s nature, the expected turnover rate of WC is 2 cycles/year Also according to thefinancial plan at the end of 2017, in 2018 the company will be continue to expand the businesswith constructing additional manufacturing factories to produce confectionery to increase sales

by 60% compared to 2017

Therefore, expected revenue = 101,393 x (1+ 60%) = VND 162,229 (million)

So, the expected WC demand for 201 6 = 162,229/2 = VND 81,114 (million)

We are now determine the actual WC demand in 2018 to measure the accuracy of the abovemethod of forecasting WC demand:

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TABLE 1.6: ACTUAL DEMAND FOR WC IN 2018

(Source: Financial Statements period 2018)

Gap between actual demand and expected:

= Actual WC demand – Expected WC demand

= 51,467– 81,114 = VND (29,647) (million)Percentage difference between expected and reality is 36.55%

This difference is due to the low accuracy of the applied method and the revenue forecastmethod is not really efficient To reduce the error, the company needs to take more accuratemeasurement methods to better determine expected revenue in the year At the same time, themethod of determining working capital also needs to be more accurate to avoid capital stagnation

at certain times of the year, causing difficulties and increasing costs when raising additionalcapital outside the plan

2.2.1 Working capital in cash management

Capital in cash of the company includes Cash and cash equivalents

Cash accounts for only a small percentage of the company's current assets However, due toits high liquidity, it plays an important role in the operation of the company The capitalmanagement with basic requirements is to ensure safety, bring high profitability, and at the sametime meet the fast payment needs of enterprises

The company is increasingly taking measures to strictly manage its revenue and expenses

in cash to avoid losses, taking advantage of the principle that all revenues and expenditures must

go through the fund, not allowed to be collected and paid outside the fund, and to aggregate thegoods month, quarterly… However, the company has not had a mechanism to determine theappropriate target fund balance, and the cash flow management in the business is also ineffective.The company's capital in cash management situation in 2 years from 2017 to 2018 is shown

in Table 2.8 In detail: Capital in cash of the company in 2017 and 2018 does not have muchfluctuation In 2017, the company's cash capital of VND 31,07 million, decreased to VND 30,41million by 2016, equivalent to a reduction rate of 0.52%

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The capital structure of cash slightly changed although cash capital decreases; cash in theend of 2017 accounted for 4.73%, and by the end of 2018 cash in the fund, although decreasedVND 6,6 million, accounted for a slightly higher proportion capital in total cash and cashequivalents (5.25%)

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