Financial analysis at viet lam construction and concrete joint stock company

Trang 1 MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT VIETNAM NATIONAL UNIVERSITY OF AGRICULTURE LE TRAN LINH TRANGFINANCIAL ANALYSIS AT VIET LAM CONSTRUCTION AND CONCRETE JOINT STOCK C

MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT VIETNAM NATIONAL UNIVERSITY OF AGRICULTURE

LE TRAN LINH TRANG

FINANCIAL ANALYSIS AT VIET LAM CONSTRUCTION

AND CONCRETE JOINT STOCK COMPANY

UNDERGRADUATE THESIS

Hanoi – 2022

MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT VIETNAM NATIONAL UNIVERSITY OF AGRICULTURE

UNDERGRADUATE THESIS

FINANCIAL ANALYSIS AT VIET LAM CONSTRUCTION

AND CONCRETE JOINT STOCK COMPANY

Major : Advance financial economic

School year : 2018-2022 The Supervisors : MSc Vu Thi Thu Huong

MSc Dang Nam Phuong

Hanoi – 2022

DECLARATION OF AUTHORSHIP

I hereby declare that the research topic in the thesis titled "FINANCIAL ANALYSIS AT VIET LAM CONSTRUCTION AND CONCRETE JOINT STOCK COMPANY" is my own research work based entirely on documents, information, and data that I have researched and learned from many sources different sources and also in practice Therefore, the research results are guaranteed to be the most honest and objective In addition, I also certify that these results have not been found in any previous study

First of all, I would like to thank the leadership of the Vietnam National University of Agriculture for your dedication to teaching and supporting students, especially those in the Faculty of Economics and Rural Development During the past few years, this has helped me gain valuable and useful knowledge, as well as provided career opportunities and good development for myself

During the internship, I was reinforced with the knowledge that I had and had not learned at the university, as well as valuable experience from the company's Board of Directors and colleagues I would like to thank Viet Lam Construction and Concrete Joint Stock Company for allowing me to learn and practice myself through practical experience Although I still have many shortcomings in knowledge and practical experience, the company and the center still support me wholeheartedly, helping me to complete my work well During the internship, the company created the best conditions for me, and I completed my undergraduate thesis

I would like to express my sincere thanks to the supervisor Vu Thi Thu Huong and supervisor Dang Nam Phuong, for supporting, helping, commenting, and editing during the completion of the undergraduate thesis

Sincerely, thanks!

ABSTRACT

The objective of the study is to assess the financial situation of Viet Lam Construction and Concrete Joint Stock Company, along with studying the theoretical and practical basis of corporate finance and corporate financial analysis; research and survey the current situation of financial analysis at Viet Lam Construction and Concrete Joint Stock Company; recognizing, evaluating and offering some reasonable solutions to improve financial analysis at Viet Lam Construction and Concrete Joint Stock Company

The mission of study are Presenting the methods applied to systematize the theoretical basis of financial analysis at Viet Lam Construction and Concrete Joint Stock Company; presenting methods and contents on corporate finance and corporate financial analysis; stating the groups of financial evaluation criteria and factors affecting financial analysis at enterprises; Presenting financial analysis at Viet Lam Construction and Concrete Joint Stock Company; outlining the limitations and causes that make financial analysis at Viet Lam Construction and Concrete Joint Stock Company incomplete to serve as a basis for providing solutions and recommendations; Completing the method and content of financial analysis at Viet Lam Construction and Concrete Joint Stock Company, completing the Regulation

on financial analysis; completing the financial analysis process,

New contributions to the thesis: Systematize the theoretical and practical basis of financial analysis in enterprises; Assess the financial situation of Viet Lam Construction and Concrete Joint Stock Company; analysis of factors affecting the financial situation of Viet Lam Construction and Concrete Joint Stock Company; Proposing some solutions to improve the financial management of Viet Lam Construction and Concrete Joint Stock Company, helping the results have an effective effect on management activities in

particular and business activities in general, creating conditions for the company's production and business activities to be more and more effective

CONTENTS

DECLARATION OF AUTHORSHIP i ACKNOWLEDGEMENT ii

LIST OF TABLE vi

LIST OF CHART viii

PART II: THEORETICAL AND PRACTICAL BASIS OF

CORPORATE FINANCE AND CORPORATE FINANCE ANALYSIS 5

2.1 Theoretical basis of corporate finance and financial analysis 5

2.1.1 Some concept related to the topic 5

2.1.2 The purpose of financial analysis 6

2.1.3 The role of financial analysis 6

2.1.4 Some general issues of corporate finance analysis 8

2.1.5 Content of corporate finance analysis 12

2.1.6 Factors affecting corporate finance analysis 15

2.2 Practical basis of corporate finance analysis 17

2.2.2 Lessons learned for Viet Lam Construction and Concrete Joint Stock

2.2.3 Relevant studies 20

PART III: GEOGRAPHICAL CHARACTERISTICS OF THE STUDY

3.1.1 Overview about Viet Lam Construction and Concrete Joint Stock

3.1.2 Features of the company's organizational structure 23

3.1.3 Labor situation of Viet Lam Construction and Concrete Joint Stock

3.2 Research methods 28

3.2.1 Methods of choosing a research site 28

3.2.2 Data collection method 28

3.2.3 Data processing methods 29

3.2.4 Data analysis methods 30

3.2.5 Systematic analysis of financial indicators 31

PART IV: RESULTS AND DISCUSSION 33

4.1 Current situation of the corporate finance of Viet Lam Construction and Concrete Joint Stock Company 33

4.1.1 Analysis businessresult of Viet Lam Construction and Concrete Joint Stock Company in the period of 2019-2021 33

4.1.2 Financial structure analysis 39

4.1.3 Financial analysis 48

4.1.4 Cash flow statement analysis 60

4.1.5 Indicators for assessing cash flow analysis 63

4.2 Assessment of the company's financial situation 66

4.3 Factors affecting corporate financial analysis at Viet Lam Construction

4.4 Complete solution for financial analysis at Viet Lam Construction and Concrete Joint Stock Company 69

PART V: CONCLUSIONS AND RECOMMENDATIONS 73

5.1 Conclusion 73

5.2 Recommendation 74

REFERENCES 75

LIST OF TABLE

Table 2.1: Business performance of Alphanma JSC 17

Table 2.2: Business performance of Thang Long Concrete Ready Found Joint Stock Company 18

Table 3.1: Labor situation 28

Table 3.2: Primary data collection 29

Table 4.1: Analysis businessresult of Viet Lam Construction and Concrete Joint Stock Company in the period of 2019-2021 38

Table 4.2: Analysis asset structure and volatility of Viet Lam Construction and Concrete Joint Stock Company (2019-2021) 41

Table 4.3: Structure and volatility of resources analysis of Viet Lam Construction and Concrete Joint Stock Company (2019-2020) 46

Table 4.4: Analysis of current liabilities solvency of Viet Lam Construction and Concrete Joint Stock Company 49

Table 4.5: Total asset turnover 52

Table 4.6: Current assets turnover 53

Table 4.7: Non-current assets turnover 54

Table 4.8: Analyze debt management capabilities of Viet Lam Construction and Concrete Joint Stock Company (2019-2021) 56

Table 4.9: Profitability analysis of Viet Lam Construction and Concrete Joint Stock Company (2019-2021) 58

Table 4.10: Analysis of the cash flow statement of Viet Lam Construction and Concrete Joint Stock Company of period 2019-2021 62

Table 4.11: Cash flow analysis of Viet Lam Construction and Concrete Joint Stock Company (2019-2021) 65

LIST OF DIAGRAM

Diagram 2.1: Corporate finance analysis process 11

Diagram 2.2: The content of corporate finance analysis 15

Diagram 2.3 Factors affecting corporate finance analysis 15

Diagram 3.1: Diagram of the company's management apparatus 23

LIST OF CHART

Chart 2.1: Revenue of Viet Nam Dairy Products Joint Stock Company 19 Chart 4.1: Asset structure of Viet Lam Construction and Concrete Joint

Stock Company 39 Chart 4.2: Resources structure of Viet Lam Construction and Concrete

Joint Stock Company (2019-2021) 45

PART I: INTRODUCTION 1.1 Research problem

Vietnam is a successful development story In a short time, economic reforms since 1986, combined with favorable global trends, have rapidly transformed Vietnam from one of the poorest countries in the world to a low-middle-income country in a short period According to the General Statistics Office, the Gross Domestic Product (GDP) in the first quarter of 2022 is estimated to increase by 5.03% over the same period last year, higher than the growth rate of 4.72% in the first quarter of 2021 and March 3 0.66% in the first quarter of 2020, but still lower than the growth rate of 6.85% in the first quarter of 2019 Thanks to a solid foundation, Vietnam's economy has shown outstanding resilience in times of crisis, most recently the COVID-19 pandemic However, our economy in the first three months of 2022 has achieved many positive results Most industries and fields tend to recover and grow again (General Statistics Office, 2022)

Besides the positives of the domestic economy, integration into the global economy is becoming increasingly important, providing chances for our businesses to have more opportunities to develop and expand their business scale However, any business operating in any business field will face challenges, particularly in an industry that is important to the economy, such as construction Specifically, according to the socio-economic situation report of the General Statistics Office, the production and business activities of construction enterprises in the first quarter of 2022 are considered more difficult than in the fourth quarter of 2021 There were 53.4% of enterprises thought that the production and business situation in the first quarter of 2022 was more difficult than in the fourth quarter of 2021 28.7% of enterprises said that the production and business situation remained stable Only 17.9% of enterprises considered the production and business situation more favorable The reason for this is that the cost of construction materials, particularly steel,

has continued to rise, making it difficult for construction companies to complete signed works and projects Although the COVID-19 epidemic has been gradually controlled, it still causes a short-term labor shortage Besides, businesses still lack the capital to be able to fully restore production and business activities (General Statistics Office, 2022)

The financial position of an enterprise reflects the business health of that enterprise, determines the attraction of investment capital, or creates confidence in customers as well as suppliers Financial analysis helps managers make better decisions about investments and the distribution of profits In addition, this job is also the basis for controlling business activities and management in the enterprise, providing the basis for future financial estimates and helping businesses achieve the goal of maximizing profits and ensure the ability to pay debts Financial analysis indicators are the most visible and effective means of expressing the current state of an economic entity Therefore, financial analysis situation through the financial reporting system has an important meaning, helping the information users to objectively evaluate the financial strength, profitability, and profitability This is a long-term strategic project to assist businesses in developing sustainably and steadily

Established in 2016, Viet Lam Construction and Concrete Joint Stock Company has faced many difficulties since its inception, but according to its perseverance, the company has gradually innovated, expanded the scale and area of operation, and applied modern technology in the production process Viet Lam Construction and Concrete Joint Stock Company have had a position

in the market, creating trust in customers as well as suppliers with high product quality and a professional working style, significantly contributing to the development of Phu Tho province more and more However, in the period of integration and development, the company also encountered many difficulties and challenges from competitors As an enterprise in the field of construction,

improve more and more to meet the development needs of society The market requires companies to understand their financial situation and to come up with improvement measures as the right competitive strategies Unfortunately, the company has not yet conducted a financial analysis or made decisions to improve immature issues or promote positive aspects for the company's sustainable development

Realizing the importance of financial analysis in the company's business, combined with the knowledge gained and the provided data, I have chosen the

CONSTRUCTION AND CONCRETE JOINT STOCK COMPANY." 1.2 Research objectives

1.2.1 General objective

Based on assessing the financial situation of Viet Lam Construction and Concrete Joint Stock Company in the past, we propose solutions to improve the financial management of Viet Lam Construction and Concrete Joint Stock Company in the coming period

-What are the factors affecting the finances of Viet Lam Construction and Concrete Joint Stock Company?

- What solutions are there to improve the financial management of Viet

Lam Construction and Concrete Joint Stock Company?

1.4 Research objects and scopes

1.4.2.2 Geographic scope

The topic was studied at the Accounting and Finance Department of Viet Lam Construction and Concrete Joint Stock Company

1.4.2.3 Timing range

- The study was carried out from December 24, 2020 to May 20, 2022

- Secondary data were collected in the last 3 years (2019-2021)

- Primary data collected in 2022

PART II: THEORETICAL AND PRACTICAL BASIS OF CORPORATE FINANCE AND CORPORATE FINANCE

ANALYSIS

2.1 Theoretical basis of corporate finance and financial analysis

2.1.1 Some concept related to the topic

2.1.1.1 The concept of corporate finance

"Corporate finance is an activity related to the mobilization and formation

of capital and the use of that capital to finance the investment in the assets of the

enterprise to achieve the set objectives." (Nguyen Minh Kieu, 2010)

"Corporate finance, in general, is the valuable relationship between enterprises and economic actors." (PhD Luu Thi Huong, PhD Vu Duy Hao, 2006)

Thus, corporate finance is defined as the economic relationships that occur as a result of the process of developing, distributing, and utilizing financial resources and monetary funds in the course of an enterprise's commercial activities to achieve a certain aim

2.1.1.2 The concept of financial analysis

"Financial analysis of an enterprise is the process of comprehensively applying scientific analytical methods to assess the financial status of an enterprise, helping managers with interests associated with the enterprise understand the financial status of the enterprise and the financial security of the business, accurately predicting the future finances of the enterprise as well as the financial risks that the enterprise may face Therefore, making decisions that are in line with their interests " (Ngo The Chi, Nguyen Trong Co, 2015)

"Analysis of the financial position of an enterprise is a set of concepts, methods, and tools that enable the collection and processing of accounting information and other information in the management of an enterprise to assess the financial position of an enterprise's financial resources, capabilities, and

potential, helping people to use the information to make appropriate financial and management decisions." (Nguyen Nang Phuc, 2010)

2.1.2 The purpose of financial analysis

Financial analysis provides sufficient information useful to investors, creditors, and other users so that they can make the investment, credit, and similar decisions

The financial analysis must also provide information about the economic resources, equity, liabilities, and results of the business processes of the enterprise At the same time, it adds to the business's obligations to these resources and the impact of economic transactions, helping business owners accurately predict the future development of their business

Analysis of the financial position of an enterprise is the process of checking, comparing data, and comparing the actual financial data of an enterprise with the past for future orientation From there, it is possible to fully assess the strengths and weaknesses in business management and find realistic measures to enhance economic activities, and also serves as an important basis for forecasting the development trend of production and business of enterprises Financial activities have a direct relationship with production and business activities Good or bad financial situations both have a promoting or inhibiting effect on the production and business process Therefore, financial analysis has important implications for business owners and external parties related to corporate finance

2.1.3 The role of financial analysis

Financial analysis plays a particularly important role in financial management, which is the core factor that determines the survival of a business There are many subjects interested in the financial situation of enterprises, such

as business owners, sponsors, suppliers, customers, including state agencies and employees, each of whom has an important focus on the financial position

For the manager

As the person who directly manages and runs the business, the manager best understands the financials of the business, capturing all the information for analysis Financial analysis of enterprises for managers to meet the following

goals:

-Evaluate the effectiveness of business management activities in the past period; implement the principles of financial management, profitability, solvency, and financial risk in the operation of the business

-Ensure that the Board of Directors' decisions on investment, profit distribution, etc are consistent with the actual situation of the business

-Provide a basis for inspection and control of operations and management in the enterprise

In addition, the financial analysis also creates a basis for managers to predict the future financial situation and make more appropriate policies

For investors

For investors, their primary concerns are payback time, return, and risk Therefore, they need information about the financial condition, performance, business results, and growth potential of enterprises

In a joint-stock company, the shareholders are the ones who have invested in the business and they may bear the risks This risk is related to the decrease in share prices in the market, which leads to the risk of bankruptcy of the business Therefore, their decisions always have a balance between the level

of risk and the profit achieved

For corporate creditors,

While financial analysis is performed by investors and corporate managers to assess the profitability and growth of a business, it is also performed by banks and commercial credit providers for the enterprise to use

to ensure its debt payment ability

For bankers and credit unions, their concerns are primarily directed at the ability of the business to repay its debt Therefore, they pay special attention

to the amount of cash and other assets that can be quickly converted into cash, thereby comparing it with the number of current liabilities to know the immediate solvency of the business Besides, bankers and creditors are also very interested in the owner's capital, because this capital is their insurance in case the business is at risk

For suppliers of goods and services to businesses, they must decide whether to allow incoming customers to buy goods on credit or not They need

to know the solvency of the current business and shortly

For employees in the enterprise

Besides investors, managers, and creditors of the business, the salary earners in the business are also very interested in the financial information of the business This is also understandable because the performance of the business has a direct impact on the salary, the main income of the employee In addition, in some businesses, employees are allowed to contribute capital to buy a certain number of shares They are also business owners, so they have rights and responsibilities associated with the business

2.1.4 Some general issues of corporate finance analysis

2.1.4.1 Balance sheet

A balance sheet is a statement of the assets and capital position of the business at a certain point in time The reporting time is usually chosen as the end of the quarter or the end of the year Therefore, a common feature of the balance sheet is to provide time-series data about the assets and capital of the business The balance sheet is the general balance sheet shown in the basic accounting equation: the balance between the total assets and total capital of a business

On the asset side, asset categories are ranked by descending liquidity,

first, followed by long-term assets Cash will appear first in terms of short-term assets, followed by bank deposits

In economic terms, the data on the assets side of the balance sheet indicates the size and structure of the enterprise's assets in descending order or order of priority for payment in economic terms As a basis, liabilities appear first, followed by equity Short-term loans are placed top among payables, followed by loans and long-term debts

In summary, the balance sheet equity chart gives us information about a business's financial position, and the asset side chart tells us how capital is

being used in the future enterprise

2.1.4.2 Statement of income

A statement of income is a statement of the income, expenses, and profits

of a business over a certain period The reporting period is usually selected as

a year, quarter, or month Therefore, the common feature of the income statement is to provide period data on the revenue, cost, and profit situation of the business

The business results of enterprises are expressed through many different indicators with different meanings In this report, appropriate indicators are designed to present the profit and loss results of the whole enterprise and the results in each business field of the company, such as main production and main business activities, investment activities, and financial activities

Although the income statement is prepared at the end of the accounting period, the items presented in this report represent the business results of the business throughout the period

Balanced relationship when preparing the income statement

* Net sales = Total sales – deductions

* Deductions = Trade discounts + Sales discounts + Refunds + Special consumption tax, export tax

* Gross profit= Net sales – Cost of goods sold

* Net profit = Gross profit – Selling expenses – General and administrative expenses

2.1.4.3 Cash flow statement

The statement of cash flows is a statement that presents the opening cash balance, the cash inflows and outflows, and the ending cash balance of the business The statement of cash flows helps to supplement the financial position

of the business that the balance sheet and income statement do not fully reflect

The statement of cash flows provides information for users to assess the following issues:

➢ Assess the ability to generate money in the process of operation, the ability to convert assets into money

➢ Assess the solvency of the business and its ability to pay dividends

➢ Assess the investment viability of the business

➢ Assessment of the need to raise external capital

➢ Compare the difference between net profit and cash flow

On the Statement of Cash Flows, cash flows are divided into 3 types of activities: operating activities, investing activities, and financing activities

Operating activities: These are the principal revenue-generating activities of the enterprise and other activities that are not investing or financing activities

Investment activities are the activities of purchasing, constructing, liquidating, and selling long-term assets and other investments that are not cash equivalents

Financing activities: Activities that cause changes in the size and composition of the equity and debt capital of the enterprise

2.1.4.4 Corporate finance analysis process

Diagram 2.1: Corporate finance analysis process

- Define analysis goals: Analysis goals are extremely significant in a company's financial analysis If the correct objectives are specified from the start, the analysis will be carried out within those limitations, preventing departures and meanderings during the corporate finance analysis process

- Collect information: Information is an important element in the financial analysis process If the collection of information is incorrect or incomplete, it is not possible to give accurate analysis results Financial analysis needs to use many sources of information capable of explaining and interpreting the current state of financial activities of an enterprise, thus serving the process of predicting the financial situation This information is collected from two sources: Internally collected from the financial statements and notes

to the financial statements of the company; collected from outside the enterprise is from information about the business industry according to the general financial indicators of the industry

- Information processing: the process of arranging collected information according to certain purposes in order to calculate, compare, interpret, evaluate, and determine the causes affecting the financial performance of the company, serving to make decisions for further financial activities Simultaneously, forecast the business's future financial situation

- Analysis and evaluation: Financial performance is influenced by a variety of factors, some of which may be predicted by experts and others that are impossible to predict but have an impact on volatility the study object's

movements As a result, after gathering and processing data, the analyst will determine, compute, and analyze the current state of development using appropriate methodologies (exclusion method, balanced relation method, comparative method, econometrics, )

- Predict and make a decision: Analysts predict the events of the coming year Make an appropriate decision based on the results of the analysis above For investors, it is an investment or divestment decision; for business managers,

it is a financial decision to overcome weaknesses and provide direction for future operations; and for lenders, it is the decision to finance, recover capital,

or loan

2.1.5 Content of corporate finance analysis

2.1.5.1 Financial structure analysis

- Analysis of asset structure and fluctuations: Assess the size of assets compared to total assets by calculating the proportion and difference between the criteria From there, we can see if there is a positive or negative change in the production and business processes of the enterprise

If the number of years after > the number of years before, the enterprise's assets increase, and there are conditions to expand production

If the number of years after < the number of years before, the enterprise's assets are narrowed, so the scale of production and business may be reduced if the capital is not used more efficiently

- Analysis of capital structure and fluctuations: analyzing the enterprise's independent ability and financial developments by comparing the percentage

of each source of capital in the total capital at the conclusion with one period

to the beginning of the next

+ The proportion of

each capital component

If the number of years after > the number of years before, the entire capital of the company expands, and its assets increase

If the number of years after < the number of years before, the total capital decreases, and the ability to meet the capital needs of the enterprise decreases

2.1.5.2 Analysis of business results

The income statement is expressed through a system of indicators reflecting the revenue, expenses, profit, and tax liability of the enterprise Indicators are arranged into specific sections, reflected by "Number of years ago", and "Number of this year" The income statement is structured in the form

of a summary of the numbers arising from the accounting accounts, which are ordered according to the requirements of the management The income statement is divided into three parts:

- Revenue and expenses of business activities in the period

- Income and other operating expenses

- Profits and corporate income tax obligations

2.1.5.3 Systematic analysis of financial indicators

- Indicators to assess solvency: The ability of a company to repay the debt or complete its term liabilities is measured by its solvency The performance of these obligations is influenced, in part, by the structure and value of the current assets and their liquidity over a certain period of time High liquidity means low risk, but profits may not be high because of excessive cash, high value of receivables and inventory Low solvency means high liquidity risk, but profits can be high because short-term assets effectively use investment capital for small-term assets In order to analyze the solvency of an enterprise, it is necessary to analyze the indicator coefficients: general solvency ratio, instant solvency ratio, quick solvency ratio, and quick solvency ratio short-term debt solvency

- Indicators for assessing the ability to manage assets are: The effectiveness of an operation is determined by the output results of its input

results, so we cannot evaluate based on the achieved results That operation is effective The larger the output on a specified amount of input, the more efficient it is Therefore, a business invests in its assets to generate revenue and profit The more revenue and profit a business generates from an investment in

an asset, the more efficiently it operates Through analyzing the efficiency of the use of total assets, the efficiency of using short-term assets, and the efficiency of using long-term assets, we will see the level of exploitation of input resources of the enterprise, thereby evaluating whether the management and use of capital of the enterprise are reasonable, economical, and effective

- Indicators for assessing debt management ability: This group of indicators includes those reflecting the level of financial autonomy of the enterprise Therefore, analyzing debt management ability helps to assess whether the enterprise's debt work is reasonable and how the debts are affecting the production and business activities of the enterprise To evaluate these indicators, it is necessary to analyze the debt-to-asset ratio and the debt-to-equity ratio

- Profitability evaluation indicators: The main objective of a warehouse business is profit Profit is a general financial indicator, reflecting the efficiency

of investment, production, and consumption The ratios used to evaluate the profitability of a business are: return on sales (ROS), return on equity (ROE), and return on assets (ROA) These indicators show how much profit after tax will be obtained with 100 VND of revenue; how much profit is generated for every 100 VND of assets; and how much profit after tax will be generated for every 100 dongs of equity invested in the business

2.1.5.4 Cash flow statement analysis

In financial analysis, cash flow analysis plays an extremely important role Because investors will be readily deceived by attractive profit reports if they do not consider the long-term feasibility of those returns Therefore, through cash flow analysis, investors will better understand the true value of

the business and will easily make their investment decisions

Diagram 2.2: The content of corporate finance analysis

2.1.6 Factors affecting corporate finance analysis

Diagram 2.3 Factors affecting corporate finance analysis

- Corporate finance analysis process: An analytical process consists of 5 stages, so when conducting analysis, it is necessary to perform fully and accurately from the first stages to get results that meet requirements

- Contents of corporate finance analysis: When analyzing corporate finance, it is possible to analyze many contents The content of the analysis will

help administrators easily view and evaluate the financial position of the business from different angles The more complete and accurate the content is, the more clearly the financial position of the business is shown, from which the administrators will make the best financial decisions

- Analytical methods: Analysts can use a variety of methods to analyze the financials of a business However, analysts need to know how to select and combine analytical methods to suit the business to be able to give the most accurate results

- Information quality: It can be said that this is a prerequisite factor affecting the quality of financial analysis To analyze the financial position of

an enterprise, analysts need to use two sources of information, which are: information outside the enterprise, including economic situation, information about the business's industry, ; and information inside the enterprise, including financial statements, statistical documents, financial notes, etc However, to be able to do effective financial analysis, it is necessary to collect all the necessary information

- Corporate owners' financial analysis awareness: This is also an important factor in improving the quality of business financial analysis Although the concept of financial analysis has become popular with many managers, not all managers fully understand the role and importance of business financial analysis From that, it can be seen that the financial analysis

of enterprises is sometimes just a formality and does not serve to make financial decisions

- Analyst qualification: After obtaining the necessary information, how

to synthesize and process information to produce good quality results is not easy Therefore, in order to be able to analyze the financial situation of an enterprise, analysts need to have high expertise in financial accounting, have analytical skills, make reports, give recommendations, and give orientations for

2.2 Practical basis of corporate finance analysis

2.2.1 Experience from enterprises in Vietnam

2.2.1.1 Experience from enterprises in the same industry

a Alphanam Joint Stock Company

Alphanam Joint Stock Company was established in 1995 and is a company operating in investment, construction of industrial park infrastructure, houses, technical infrastructure zones, and trading in supplies, equipment, and materials construction, The company's revenue in 2021 increased by 26.50% compared to 2020

Table 2.1: Business performance of Alphanma JSC

Indicators Unit 2019 2020 2021

Source: Financial statements of the company for the period (2019-2021)

The company's return on sales ratio has gradually decreased over the years: in 2019, for every 100 VND of net revenue, 188 VND of profit after tax

is generated; in 2020, 149 VND of net revenue is generated for every 100 VND

of profit after tax; and by 2021, for every 100 VND of net revenue, 117 VND

of after-tax profit will be generated Although this indicator of the company decreases, it is still greater than 1, showing that the company is operating efficiently and still generating profits

The company's return on assets ratio has also shown signs of decreasing over the years but still maintains a positive coefficient However, the decrease

in this coefficient proves that the company has not used its assets effectively The company's return on equity ratio over the years 2019–2021 is also quite positive Along with 100 VND of equity spent, the profit after tax in 2019 is

807 VND, in 2020 it is 667 VND, and in 2021 it is 623 VND Although this ratio also decreased, it still shows that the company's business is still stable

b Thang Long Concrete Ready Found Joint Stock Company

Thang Long Concrete Ready Found Joint Stock Company, formerly known as Thang Long Concrete Ready Found Limited Liability Company, was established in 2003 The company specializes in manufacturing structural concrete products, specifically all kinds of concrete manufacturing construction materials, providing transportation services, lifting products, and installing in the field of construction, The company's revenue in the period from

2019 to 2021 has fluctuations Specifically, in 2019, the company's revenue is 1,575 million VND In 2020, the company's net revenue is 1,854 million VND,

an increase of 279 million VND, equivalent to an increase of 17.71% compared

to 2019 By 2021, the company's revenue will increase by VND 734 million (equivalent to an increase of 39.60%) compared to 2020

Table 2.2: Business performance of Thang Long Concrete Ready Found

Joint Stock Company

Source: Financial statements of the company for the period (2019-2021)

The company's return on sales ratio has gradually increased over the years: in 2019, for every 100 VND of net revenue, 892 VND of net profit is generated; in 2020, for every 100 VND of net revenue, 1436 VND of net revenue is generated By 2021, for every 100 VND of net revenue, 3863 VND

of profit after tax will be generated This indicator of the company proves that the company's business is efficient and generates high profits

The return on assets of the company also shows signs of fluctuation over the years but still maintains a positive coefficient However, the fluctuation of

this ratio proves that the use of company assets is really effective The company's return on equity ratio over the years 2019–2021 is also quite positive Along with 100 VND of equity spent, the profit after tax in 2019 is

755 VND, in 2020 it is 921 VND, and in 2021 it is 1077 VND This ratio shows that the company's business is in good development momentum

2.2.1.2 Experience from other businesses

Vietnam Dairy Products Joint Stock Company, Vinamilk, established in

1976, is one of the leading nutrition companies in Vietnam and is currently in the group of 50 largest dairy companies in the world As a company specializing in providing dairy products such as liquid milk, powdered milk, condensed milk,

Source: Financial statements of the company for the period (2019-2021)

Chart 2.1: Revenue of Viet Nam Dairy Products Joint Stock Company

The dairy industry, in general, is also objectively affected by the pandemic of the century, in which the leading enterprise in the industry, Vinamilk, is not an exception However, Vinamilk has set a record for the first time, surpassing the milestone of VND 60.000 billion, specifically reaching VND 61.012 billion, up 2.2% over the same period in 2020 This revenue record is contributed by growth from all 3 segments: domestic, export, and foreign branches It proves that the company is still making good use of

distribution channels and policies in production and business activities to be able to stand firm in the market and achieve new records

2.2.2 Lessons learned for Viet Lam Construction and Concrete Joint Stock Company

From experience of analyzing the financial situations of companies in the same industry and the opposite industry, it is shown that: using accurate analytical data, making full use of it; using methods of analyzing indicators suitable for enterprises; selecting criteria suitable to the users of the analyzed information; providing timely solutions and business policies for the company

2.2.3 Relevant studies

Author: Le Thi Huong with the thesis topic "Analysis of the financial situation at Thach Duong Trading Co Ltd." The author has focused on systematizing the basic theoretical issues of financial situation analysis through financial statements, deeply mentioning the methods and contents of analyzing the company's financial position From there, it shows the business efficiency

of the enterprise, and its limitations, and points out several policies and solutions to help the company improve its limitations

Author: Nguyen Thi Phuong Hoa with the thesis topic "Financial analysis at Thai Hoa Co Ltd." The topic goes into researching the current financial situation of Thai Hoa Co Ltd through analysis of production and business results, analysis of financial structure, analysis of solvency, and analysis of profitability Therefore, the author pointed out the strengths and weaknesses in the financial situation of the company, from which the author proposed some solutions to improve the financial position of the company, helping the company accurately assess its financial position

PART III: GEOGRAPHICAL CHARACTERISTICS OF THE

STUDY SITE AND RESEARCH METHODS

3.1 Geographical characteristic

3.1.1 Overview about Viet Lam Construction and Concrete Joint Stock Company

3.1.1.1 History of formation and development

- Company name: Viet Lam Construction and Concrete Joint Stock Company

- Address: Area 14, Nguyen Tat Thanh Street, Thanh Mieu Ward, Viet Tri City, Phu Tho Province

Currently, the company is constantly investing in expanding the variety

of products and improving production capacity The staff of Viet Lam

Company constantly strives to provide the best and most prestigious service to customers It is worthwhile to be one of the big and reliable partners

The company is an independent accounting unit, conducting production and business activities according to the Business Registration Certificate No

26009601896 dated May 13, 2016, issued by the Department of Planning and Investment of Phu Tho Province, Enterprise Law, Charter company and relevant applicable legal regulations Since its establishment, the company has had 3 amendments to its Business Registration Certificate, and the most recent adjustment was on September 20, 2021

Areas and lines of business

- Supply of commercial concrete (fresh concrete)

-Trading in building materials: sand, gravel, stone

Producing precast concrete structures

-Construction and installation of civil, industrial, and traffic works

3.1.1.2 Function and mission

* Function

Producing and supplying all types of construction materials and commercial concrete for works, industrial and civil construction, and road construction

The projects the company has constructed

Over the years, Viet Lam Concrete and Construction Joint Stock Company has supplied concrete for projects in Phu Tho province:

➢ Phu Tho Maternity Hospital - Nong Trang Ward, Viet Tri City, Phu Tho Province

➢ Muong Thanh Phu Tho Hotel- Hung Vuong Square, Viet Tri city, Phu Tho province

➢ Happy Land Phu Tho amusement park - Gia Cam ward, Viet Tri city, Phu Tho province

➢ Tu Da Industrial Park - Phu Ninh district, Phu Tho province

➢ Yida Garment Factory- Cam Khe district, Phu Tho province

➢ BYD Electronics Vietnam Factory- Phu Tho Town, Phu Tho Province

* Nhiệm vụ

➢ To perform the tasks set forth by the general meeting of shareholders

➢ Use and protect the company's assets in the process of production and business activities

➢ Continuously improve the qualifications and skills of employees

➢ Develop and issue regulations and operational policies to improve responsibility, order, and discipline in the company

➢ Create jobs and a stable income for the staff

3.1.2 Features of the company's organizational structure

3.1.2.1 Organization management apparatus

In the production and business activities of each enterprise, there are certain goals to be achieved, but to achieve those goals, it is necessary to have

an executive force that participates in the production process, thereby forming

a company management apparatus to ensure consistency in the operating production and business operations of the enterprise

Diagram 3.1: Diagram of the company's management apparatus

3.1.2.2 Functions and missions of each department

The Administrative Council: is the governing body of the company and acts on behalf of the company to deal with issues of the company's interests or

to determine the objectives and tasks of shareholders, except for issues approved by the General Meeting of Shareholders The shareholders decide The Administrative Council regularly monitors business operations as well as internal controls and risks for the company

The Board of Directors is appointed by the Administrative Council, in which the director is the person responsible for production and business, implements the business plan in accordance with the laws of the State, and is the person who signs the business contracts corporate business At the same time, he is also the person who orients the strategy and gradually implements

it for the stable and long-term development of the company The deputy directors act on behalf of the director to handle some delegated work when the director is away The Deputy Director is the bridge for the Director in relation

to the departments and divisions He is responsible for the management and administration of the departments according to the rights and obligations assigned by the Director

Sales and Planning Department: To plan the production and business activities of the company each month, quarter, and year and report on statistics, synthesis, and analysis of the plan Liaise with industry investors and customers

to find jobs and sell products manufactured by the company Collect information, learn the market needs, and propose a suitable investment

Accounting Department: Advise the director of financial management so that the use is most effective, whether revenue and expenditure are appropriate manage, inspect, and implement the accounting regime in accordance with the Ordinance of the State and the company's charter; ensure capital to meet the needs of production and business activities of the company; evaluate the efficiency of use of capital and assets of the company Organize accounting and

capital circulation in production and business monitor and fully record daily arising transactions together with keeping relevant documents and at the same time reflecting them in accounting books Provide financial statements, tax finalization, inventory and assessment of assets in the company; recommend liquidation of backlogged assets and materials of poor quality; no need to use them

Technical and supervision department: Implement and be responsible for guiding, supervising, and inspecting the process of construction, installation, and product production in workshops Receipt of documents from the planning department for technical acceptance, phase acceptance, acceptance, and handover; completing acceptance documents and moving to the finance department directing and performing technical construction tasks directly at workshops, batching plants, and works to ensure technical and artistic quality, checking and evaluating quality before handing over products to users

Construction parts directly at the site: Check the implementation of each work item according to each type of contract with customers to have a plan to direct production on schedule, deliver motorcycles and equipment, and make

an annual repair and warranty plan There is well-organized statistical work at the factory to monitor each stage of the production process as a basis for building economic, technical, and labor norms and wages for workers

3.1.3 Labor situation of Viet Lam Construction and Concrete Joint Stock Company

Besides factors such as capital, facilities, , labor also plays a very important role in determining the labor productivity of the company, helping production and business activities take place continuously, without interruption Labor also helps to perform work more efficiently and creatively Therefore, the quality of human resources is a key factor in determining the success of the company's business activities Over the years, Viet Lam Construction and Concrete Joint Stock Company has continuously improved

the professional qualifications and skills of its employees as well as cared for the material and spiritual life of the labor force

Based on Table 3.1, we see that the total number of employees of the company over the past 3 years has not changed much Specifically, in 2019, the total number of employees was 86 people In 2020, the total number of employees of the company was 90 people, an increase of 4 people (corresponding to an increase of 4,65%) compared to 2019 By 2021, the total number of employees The number of employees is 101 people, an increase of

11 people (equivalent to an increase of 12,22%) compared to 2020 The number

of employees of the company increases because the company increasingly needs to expand production and business activities

Sort by gender: Male workers always account for a larger proportion than female employees and have increased over the past 3 years Specifically, the number of male employees in 2019 is 81 people, accounting for 94,19% of the total number of employees In 2020, the number of male employees will be 86 people, accounting for 95,56% of the total number of employees, and will increase to 5 employees, respectively, an increase of 6,17% compared to 2019

In 2021, the number of male employees was 97 people, accounting for 96,04%

of the total number of employees and an increase of 11 people compared to

2020 Meanwhile, the proportion of female employees has decreased However, in 2019, the number of female employees is five, accounting for 5,81% of the total number of employees In 2020 and 2021, the number of female employees will decrease by 1 person compared to 2019 This is not too difficult to understand because the company's production activities always require workers to be healthy and withstand work pressure is large, so male workers account for a significant proportion of the total number of employees Female employees only account for a small proportion and are all indirect workers suitable for management work in the Finance-Accounting Department

Sort by nature of work: As analyzed above, due to the nature of the job, direct labor accounts for a very high proportion The proportion of direct labor is much higher than that of indirect labor and will increase in 2020 Specifically, in

2019, direct labor numbered 56 people, accounting for 65,12% of the total number

of employees Direct employees are 60 people, accounting for 66,67% of the total number of employees, an increase of 4 people (corresponding to an increase of 7,14%) compared to 2019; and by 2021, the number of direct employees will be

69 people, accounting for 68,32%, an increase of 9 people (corresponding to an increase of 15%) compared to 2020

Sort by qualification of labor: We see that the level of labor has fluctuated unevenly over the past 3 years The number of workers by qualification does not change much in 2020 but tends to increase in 2021, mainly due to an increase in the number of technical and high-skilled workers and a reduction in the intermediate level In which, technical workers always account for a large proportion of the total number of employees of the company (over 70%) Specifically, in 2021, the number of employees with university degrees will remain unchanged compared to 2020 at 16 people, accounting for 15.84% of the total number of employees Workers with college degrees increased by 2 people compared to 2019-2020, corresponding to an increase of 40% while the intermediate level decreased by 1 person compared to 2019-

2020 This change is due to the company's expanding its production scale, so the addition of technical and college workers and the reduction of intermediate degrees shows that the company's leadership has policies to develop human resources reasonable resources, creating conditions for employees to improve their professional qualifications to meet the increasing demands of the economy

In short, in general, the labor situation at Viet Lam Construction and Concrete Joint Stock Company is arranged quite reasonably The workforce is highly qualified, has many years of experience in production, and has a quick grasp of the industry Technological changes create favorable conditions to

improve product quality to meet the development needs of the country

Table 3.1: Labor situation

3.2.2 Data collection method

3.2.2.1 Secondary data collection