In 2001, the company's share capital increased to 56 billion VND to meet capitalneeds in production and business and innovate existing factory technology such asinvesting in cake lines,
OVERVIEW OF BIBICA JOINT STOCK COMPANY
History of formation and development
Bien Hoa Confectionery Joint Stock Company was formerly the candy factory of Bien Hoa Sugar Factory (now Bien Hoa Sugar Joint Stock Company) established in
In December 1998, under Decision No 234/1998/QD-TTG from the Prime Minister, the Confectionery Factory-House was transformed into Bien Hoa Confectionery Joint Stock Company Today, it stands as one of the largest confectionery manufacturers in Vietnam, boasting a production capacity of 18 tons of cakes per day.
18 tons of candy/day, 29.5 tons of candy/day.
At BBC, our mission is centered around our customers, ensuring that all our activities prioritize their needs We are dedicated to offering nutritious, safe, and visually appealing products that promote health and well-being Our commitment extends to continuous improvement in management, product quality, and service excellence, while also taking responsibility for societal and environmental sustainability Our vision is to establish BBC as the leading confectionery company in Vietnam.
1.1.2 History of formation and development
In 1994, the cake factory was established with a modern, synchronized production line of biscuits imported from the UK with a capacity of 8 tons/day.
On December 1, 1998, the Prime Minister approved Decision 234/1998/QD-TTG, which initiated the equitization and transfer of the Bien Hoa confectionery and dental factory This decision transformed the Sugar Company from a state-owned enterprise into the Bien Hoa Confectionery Joint Stock Company.
In 1999, the company received approval for its organizational charter, marking a significant milestone To enhance production capabilities, it invested in expanding its soft candy factory, increasing its capacity to 11 tons per day Recently, the company also invested in a carton and plastic tray production line to ensure a consistent supply of packaging for its confectionery products.
In 2000, the company launched a new distribution system in Hanoi, Da Nang, Ho Chi Minh City, and Can Tho to cater to customer demands for advanced products This year also marked a significant achievement as the company became the first in Vietnam to receive ISO 9002 certification from the British organization BVQI Additionally, the company invested in a snack product production line, boasting a capacity of 2 tons per day.
In 2001, the company increased its share capital to 56 billion VND to support production and business needs, as well as to upgrade factory technology, including investments in cake and chocolate production lines A significant investment of 13.3 billion VND was made to build a factory in Hanoi By the end of that year, the company installed a high-quality sponge cake production line with a capacity of 1,500 tons per year, totaling an investment of 19.7 billion VND As a result, the product quickly gained popularity in the domestic market, becoming a favorite among consumers.
Established in 2002 in Sai Dong, Gia Lam, Hanoi, Bien Hoa II Confectionery Factory launched its chocolate line in October, utilizing advanced British technology The company's Chocobella products rapidly gained popularity among consumers and were successfully exported to markets including Japan and Singapore.
In early 2005, the company collaborated with the Vietnam Institute of Nutrition to introduce a new line of nutritional products specifically designed for pregnant and lactating women, as well as nutritional powder for children in the weaning stage This innovative Light product line also caters to babies on special diets, including those with diabetes.
In 2006, the company built a new factory system in My Phuoc park industrial park, Binh Duong province to produce current key products
2008: Bibica invested in building 443 Ly Thuong Kiet, Ho Chi Minh City This location became the official headquarters of the Company since early 2008; In March
2008, Bibica's annual shareholders' meeting was held, with the first attendance of major shareholder Lotte
2010: The Chocopie line officially went into operation at the end of February 2010.
In 2012, a significant investment was made in the DMS sales management system, alongside the implementation of a comprehensive evaluation system for the sales force and distributors Additionally, the overall ERP enterprise management system was upgraded to the ERP R12 version with a budget of 4 billion VND, officially commencing operations in December 2012.
In 2014, we focused on enhancing sales support by implementing PDA devices to effectively manage and motivate employees in visiting online stores and promptly transferring orders to distributors Additionally, we invested in a robust information technology security system, which has been operational since September.
2014 ensures safe operation of the information technology infrastructure system in the event of power outages, fires and explosions
2017: Putting the Hifat Premium Candy production line into operation, launching the AHHA Premium Milk Candy product to the market
In 2018, the company enhanced its business management capabilities by deploying software solutions, including production scheduling on ERP, BI leadership reports, and a sales app for Shop Key Additionally, construction commenced on the Western Bibica Factory located in Long An.
Organizational structure
Shareholder structure of the company
BBC's shareholder structure is highly concentrated, with PAN Group owning 98.3% of the company This strong influence from the parent company enables BBC to leverage PAN's ecosystem for development By effectively utilizing PAN's resources for raw material supply and market access, BBC is positioned for favorable growth in the near future.
Figure 1.2.1 Shareholder structure of the company
The General Meeting of Shareholders serves as the supreme authority within a company, making crucial decisions in line with Enterprise Law and the Company Charter This body is responsible for approving development policies, determining the capital structure, and electing the board of directors to oversee management and production direction.
The Board of Directors serves as the primary management entity of the company, possessing complete authority to make decisions that align with the company's interests and objectives.
The Supervisory Board is elected by the Board of Shareholders and, on behalf of shareholders, controls all business, management and operations activities of the company.
Revenue structure
In 2020, bakery products generated 55% of the company's revenue, while candy accounted for 40%, and other products contributed 5% However, in 2021, there was a decline in revenue from both bakery and candy items, with bakery products decreasing to 53% and candy products dropping to 35% Conversely, the revenue from other products saw a significant rise, increasing from less than 10% in 2019 and 2020 to 12% of the total revenue in 2021.
BBC main factories
BBC operates three main factories located in Bien Hoa, Binh Duong, and Hung Yen, with a combined design capacity of approximately 19,000 tons of various products annually.
Business lines
The Company specializes in the production and distribution of a wide range of confectionery products, including biscuits, cookies, layer cakes, chocolates, hard and soft candies, marshmallows, snacks, nutritious cereal powder, moon cakes, and malt, featuring a diverse portfolio of 32 distinct brands.
Situation of asset scale and asset structure of the company
Bibica Joint Stock Company, comparable in asset scale to firms like HHC and HNF, faces significant challenges in reclaiming market share from the confectionery industry leader, KIDO Group Joint Stock Company.
Bibica Joint Stock Company has experienced significant growth in its asset scale over the years, particularly in its long-term asset structure Since 2017, there has been a notable increase in both the scale and composition of long-term assets, primarily driven by substantial growth in long-term financial investments and fixed assets.
Since the end of 2019, businesses have significantly increased their long-term financial investments, primarily driven by a notable rise in bond purchases from BIDV Bank, totaling VND 200 billion These bonds serve as collateral for short-term loans, allowing businesses to supplement their working capital of VND 382 billion while alleviating interest cost pressures due to interest rate differentials This trend indicates that many businesses are currently facing cash flow challenges Furthermore, the acquisition of additional subsidiaries is enabling these companies to expand their production and business operations.
In 2021, the enterprise's fixed assets rose by 99,658 million VND compared to the previous year, primarily due to investments in the Bien Hoa marshmallow factory This strategic investment is expected to boost production capacity by an additional 20 tons per day.
Since 2020, there has been a significant rise in long-term receivables, both in terms of value and structure Notably, business receivables have surged, with short-term receivables from customers increasing by 21% and prepayments soaring by 86%.
In 2019, the transactions primarily involved subsidiaries and related parties within PAN's ecosystem, which may lead to ambiguity in reporting business results for beauty companies Despite this, BBC's asset structure appears reasonable and aligns well with its business model, indicating an expansion in production and business activities However, it is crucial to monitor receivables, as a significant portion is tied to transactions with subsidiaries and other related parties in PAN's ecosystem.
SWOT analysis of Bibica company
Since its establishment, the Bibica brand has earned consumer trust and recognition as a premium Vietnamese product from 1997 to 2006 It was honored as one of the top 100 strong brands in Vietnam, showcasing its commitment to quality and excellence.
The Company's products are primarily targeted at the domestic market, with domestic consumption generating 96% to 97% of total revenue The company operates 42 factories in the Southeast region and has established a network of 108 distributors, including 23 in the Central region and 30 in the Northern region, while only 3% to 4% of revenue comes from exports Notably, 13 of these distributors sell the Company's products on a nationwide scale.
Candy is a non-essential item that does not fulfill basic human needs, and there are numerous alternatives available Consequently, a decline in consumer purchasing power is likely to affect company revenues negatively.
Each year, the Company imports essential raw materials for production, including flour, flavorings, and milk powder Fluctuations in exchange rates impact input costs, which in turn affect the Company's production outcomes and overall business performance.
So, Vietnam's economy in recent years has grown at 7-8%/year, which will stimulate people's demand for housing consumption, this will be an opportunity for BBC to develop its business.
With Vietnam's accession to AFTA, the import tax on confectionery products is set to decline, leading to more competitive pricing This shift could significantly impact the Company's business operations as it navigates the evolving market landscape.
Imported raw materials and raw sugar constitute approximately 20% of the company's production costs, making fluctuations in import-related regulations and decrees significantly affect input material prices.
Imported products account for 30% of the market share, mainly from Thailand, Malaysia, Indonesia, Hong Kong, China Some imported confectionery products are currently domestic and cannot be produced yet.
In the domestic market, BCC must compete with Kinh Do Company, Hai HaConfectionery Company, Hai Chau confectionery company.
Competitors
Kinh Do is the leading player in the Vietnamese confectionery market, holding a 32% market share and achieving an impressive annual revenue growth rate exceeding 20% Renowned for its strength in biscuits and crackers, Kinh Do's recent merger with KDC, Kido, NKD, and Vinabico is set to enhance its financial stability and corporate governance capabilities.
The company specializes in a variety of baked goods, including moon cakes, cookies, crackers, bread, and sponge cakes Notably, their cake segment holds over 3% of the national market share, contributing approximately 23% to the company's revenue in 2013.
The company operates primarily within the domestic market, accounting for 90% of its sales It boasts a comprehensive nationwide distribution system, featuring 120,000 retail points across Vietnam With a dedicated workforce of 1,800 sales staff, the company effectively manages 30,000 points of sale for ice cream and dairy products, along with 100,000 outlets for beverages and rewards.
Hai Ha Joint Stock Company
HAIHACO's market share accounts for about 6.5% of the country's confectionery market divided by revenue, behind Kinh Do and Bibica.
The company's primary product line is confectionery, which contributes to 76% of the national income In addition to confectionery, the product range includes sponge ice cream, cookies, crackers, and chocolate-covered soft cakes, marketed under popular brands such as Banh Long, Hi-Pie, and Lolie.
Target customers: ordinary customers, with an average - good income This is one of the advantages of Hai Ha company because other companies mainly target middle and high-end customers.
Duc Phat Company has successfully established a chain of bread shops specializing in fresh cream cakes, focusing on fast food options for short-term consumption With a strong presence in the fresh cake market, Duc Phat sponge cake holds over 15% market share, appealing to a diverse German customer base that includes students and office workers with average to above-average incomes.
As foreign-invested units such as Vinabico-kotobuki Joint Venture Company, Perfetti Confectionery Production Joint Venture Company these businesses all have technological advantages.
Perfetti Vietnam candy production joint venture was established on August 11,
1995, focusing on producing high quality Perfectti hard candy, focusing on marketing and distribution formula, accounting for about 60% of the confectionery market. domestic
Vinabico - kotobuki company focuses on producing biscuits and cookies The concentrated market is the export market
Besides large manufacturing enterprises, small confectionery production facilities also account for a large proportion, about 35%-40% of total domestic confectionery output.
Imported products make up 30% of the market share, including both official and unofficial items, with the majority sourced from Thailand, Malaysia, Hong Kong, and China Notably, some of these imported confectionery products are now being utilized by companies in the beverage industry.
ANALYSIS OF BIBICA'S FINANCIAL SITUATION
Block analysis and index analysis
Table 2.1 Bibica's block and index spreadsheet
Other current assets 32,473,522,128 76,329,585,168 54,841,456,999 4.53% 13.20% 7.89% 100% 235.05% 168.88% current Non- assets 825,511,717,941 1,061,307,284,723 1,155,639,375,727 53.50% 64.73% 62.45% 100% 128.56% 139.99%
Long term assets in progress 2,450,489,091 201,918,552,924 67,656,553,763 0.30% 19.03% 5.85% 100% 8239.93% 2760.94%
Revenue from sale of goods and rendering of services
(Cost of COGS goods sold) 889,301,451,589 770,006,470,567 1,135,991,686,092 71.54% 69.74% 68.97% 100% 86.59% 127.74%
Figure 2.1.1.1 Bibica's Asset Structure in 2020-2022
Between 2020 and 2022, BIBICA's total assets exhibited a growth trend, with a notable increase in the proportion of current assets, which rose to account for 35%-47% of the asset structure This growth reflects the company's capacity for long-term investment and the stability of its operations However, the significant gap between current assets and other asset categories raises concerns about liquidity and the ability to meet short-term obligations Additionally, the composition of both short-term and long-term assets is expected to undergo substantial changes during this three-year period.
Figure 2.1.1.1 Bibica's current assets structure in 2020-2022
Table 2.1.1 indicates a decline in short-term assets from 47% in 2020 to 35% in 2021, a decrease of 12%, followed by a slight recovery to 38% in 2022, an increase of 3% This trend suggests that the company has actively managed its current assets, potentially in response to adjustments in inventory levels or accounts receivable Furthermore, Table 2.1.1.1 illustrates that these fluctuations are attributed to changes in the composition of short-term asset components.
The proportion of cash and cash equivalents increased sharply from 15.72% in
2020 to 35.08% in 2021 (increased: 19.36%), then decreased to 21.88% in 2022 (decreased: 13%) This volatility suggests the company has hoarded more cash in
2021, possibly to hedge risks or for investment projects, and then used the cash in 2022.
The proportion of short-term receivables decreased sharply from 48.59% in 2020 to 26.40% in 2022 (decrease: 22.19%) This may indicate the company has improved debt collection in 2021.
The inventory proportion decreased from 17.59% in 2020 to 14.80% in 2021, reflecting a decrease of 2.79% However, it saw a slight increase to 16.20% in 2022, rising by 1.4% This trend suggests that the company aimed to optimize inventory management in 2021 and subsequently increased inventory levels in 2022 to better align with market demand.
The percentage of other short-term assets rose significantly from 4.53% in 2020 to 13.20% in 2021, marking an increase of 8.67% However, this figure then declined to 7.89% in 2022, reflecting a decrease of 5.31% Such fluctuations may be associated with short-term investments or receivables that are not directly tied to the primary business operations.
Figure 2.1.1.2 Bibica's teaching assets structure from 2020-2022
Table 2.1.1 indicates that the proportion of long-term assets rose from 53.50% in 2020 to 64.73% in 2021, marking an increase of 11.23%, before experiencing a slight decline to 62.45% in 2022, a decrease of 2.28% This trend illustrates the company's increased investment in long-term assets in 2021, which remained relatively stable in 2022 Additionally, Table 2.1.1.2 highlights how the enterprise's investment strategy has influenced the structure of its long-term asset components.
From 2020 to 2022, the company's fixed assets experienced a minor decline from 57.51% to 56.89%, reflecting a decrease of 0.62% This slight reduction indicates that the company continues to maintain a stable investment level in fixed assets, despite a subtle downward trend.
The proportion of long-term unfinished assets increased sharply from 0.30% in
2020 to 19.03% in 2021 (increase: 18.73%) and decreased sharply to only 5.85% in 2022 (decrease: 13.18%) This shows that the company is investing heavily in long-term projects, be it expansion projects or infrastructure upgrades.
The share of other long-term assets rose from 17.97% in 2020 to 21.65% in 2021, marking an increase of 3.68%, before declining to 18.15% in 2022, a decrease of 3.5% This fluctuation may be attributed to changes in long-term investments or other non-fixed assets.
Figure 2.1.2 Table of Bibica's capital structure in 2020-2022
From table 2.1.2, it shows that Bibica is tending to gradually reduce the proportion of liabilities and gradually increase the proportion of equity in the capital structure.
Despite the gradual pace of change, the high proportion of liabilities persists Notably, Table 2.1.2 illustrates that this transformation is driven by a shift in the structure of capital sources.
The proportion of liabilities increased from 28.99% in 2020 to 40.14% in 2021 (increase: 11.15%), then decreased sharply to 26.32% in 2022 (decrease: 13.83%). This could indicate the company increased its borrowing or had large liabilities in
2021 and then reduced debt in 2022.
The company's equity ratio experienced a notable decline from 71.01% in 2020 to 59.86% in 2021, reflecting a decrease of 11.15% However, this trend reversed in 2022, with the equity ratio rising to 73.68%, marking an increase of 13.82% These fluctuations indicate significant changes in the company's capital structure, likely resulting from the issuance of additional shares or an increase in capital derived from retained earnings.
Figure 2.1.3 Bibica's business results table from 2020-2022
Between 2020 and 2022, Bibica experienced stable growth in its business results, with consistent increases in revenue from sales and services Although the cost of goods sold (COGS) also rose, it did so at a slower pace than the revenue growth Meanwhile, the company's profit after tax showed fluctuations throughout this period, highlighting variations in its overall financial performance.
Revenue from sales and service provision
Sales and service revenue remains robust, experiencing minor fluctuations; it saw a slight increase of 0.13% in 2021, followed by a modest decline of 2.22% This indicates that the company's core business activities are stable and continue to constitute the majority of its revenue.
Cost of goods sold (COGS)
The continuous decrease in the cost of goods sold over the years indicates that the company has enhanced its production efficiency or successfully lowered costs, reflecting a positive trend in operational efficiency Notably, there has been a specific reduction of 2.57%.
The profit after tax saw a significant decline from 7.77% in 2020 to 2.03% in 2021, a drop of 5.74% However, it rebounded sharply to 11.71% in 2022, marking an increase of 9.68% These fluctuations may indicate volatility in business operations or the impact of extraordinary costs or taxes.
Asset: Long-term assets increased significantly, reflecting investment in fixed assets and long-term projects Short-term assets fluctuate but remain stable.
Liabilities and Owners' Equity: Liabilities increased sharply in 2021 and decreased in 2022 Equity decreased in 2021 but increased strongly again in 2022.
Revenue and Profit: Revenue is stable, cost of goods sold decreases, profit after tax fluctuates strongly with a significant recovery in 2022.
Other criteria: Cash and cash equivalents, short-term receivables, and long-term assets in progress have large fluctuations, reflecting the company's financial management and investment strategy.
Parameter analysis
The solvency of a business is crucial for financial activities, providing essential information for management decision-making Key decisions, such as loan amounts, terms, and credit sales, rely on the business's capacity to meet its financial obligations A solvent enterprise effectively manages debt repayment, enhances capital utilization, reduces costs, and maintains liquidity.
The current ratio (Rc) assesses a company's capability to meet its short-term liabilities using its current assets A high Rc signifies strong liquidity, yet it may also suggest potential inefficiencies in asset utilization.
The current ratio (Rq) assesses a company's capacity to meet short-term obligations using current assets, excluding inventory A higher Rq signifies improved liquidity compared to the quick ratio (Rc), as it disregards inventory, which can be challenging to convert into cash quickly.
Customer receivable turnover (VQPTK): Measures the number of times a business's accounts receivable are converted into cash during a given period
The Average Collection Period (KTTbq) is a key financial metric that indicates the average time it takes for a business to receive payments from customers after a sale This measurement reflects the company's efficiency in managing its accounts receivable and can be expressed on a monthly or yearly basis, highlighting the average income or profit generation timeframe.
Inventory turnover (VQTK) is a crucial metric that measures a business's sales speed, helping companies determine optimal inventory levels for proactive production and consumption By effectively managing inventory, businesses can enhance operational efficiency and avoid the pitfalls of excessive stock, which can lead to capital congestion, increased storage costs, and diminished capital efficiency.
The inventory conversion cycle (CKCHHTK) gauges how effectively a business sells its inventory and reinvests the resulting revenue into new products A lower inventory turnover signifies greater efficiency in inventory management, as it reflects the company's ability to swiftly transform inventory into sales or cash, thereby minimizing the risk associated with holding inventory for extended periods.
Bibica Company, a key player in the confectionery industry, has experienced fluctuations in its solvency parameter, which fell from 1.67 in 2020 to 1.11 in 2021 before rebounding to 1.47 in 2022, reflecting the company's growth This growth is attributed to strategic investments in fixed assets, which, while decreasing current assets, are essential for long-term development.
The industry experienced a decline from 1.60 in 2020 to 1.49 in 2021, followed by a slight recovery to 1.50 in 2022 Overall, the industry is trending downward, with Bibica showing an even more significant decline compared to the broader market.
Figure 2.2.1.2 Current solvency (RC) parameter chart
Note: Green: BIBICA Company ; Red: Industry (HAIHA)
Bibica Company's quick liquidity ratio experienced a significant decline from 1.37 in 2020 to 0.95 in 2021, followed by a slight recovery to 1.23 in 2022, indicating a reduced capacity for short-term payments with current assets This decrease may be attributed to investments in new machinery, impacting cash and short-term accounts Although Bibica's quick ratio remains lower than the industry average—falling from 1.43 in 2020 to 1.32 in 2022—the difference is minimal Overall, a comparison of Bibica's current and quick solvency with industry standards reveals that the company demonstrates relatively strong solvency indicators.
Figure 2.2.1.2 Quick solvency (RQ) chart Note: Green: BIBICA Company ; Red: Industry (HAIHA)
Customer receivable turnover is increasing significantly from 4.94 (2020) to 8.79
In 2022, the company demonstrated improved efficiency in collecting payments from customers, potentially due to the implementation of a stricter credit policy and incentives for early payments These strategies have contributed to faster recovery of outstanding debts Additionally, the enhancement of the debt collection management system has enabled more effective tracking and collection of receivables Notably, Bibica's customer receivable turnover remains significantly higher than the industry average, which increased from 1.90 in 2020 to 1.97 in 2022.
Figure 2.2.1.2 Map of KHQPTKH Note: Green: BIBICA Company ; Red: Industry (HAIHA)
Bibica's average collection period (KTPBQ) significantly decreased from 73.90 days in 2020 to 41.52 days in 2022, resulting in faster debt recovery and improved cash flow This reduction enhances short-term liquidity and overall financial health, while also lowering debt collection and bad debt management costs The early cash flow generated can be reinvested in business expansion or used to pay dividends to shareholders Possible reasons for this improvement include relaxed credit conditions, targeting new customer segments with varying payment capabilities, economic challenges affecting timely payments, and enhancements in the debt collection management system.
Figure 2.2.1.2 KTTBQ chart Note: Green: BIBICA Company ; Red: Industry (HAIHA)
The average collection period in the industry has decreased for two consecutive years, indicating an improvement in accounts receivable management efficiency Notably, Bibica Company has consistently maintained a lower collection period than the industry average over the past three years, demonstrating superior receivable management efficiency Therefore, it can be concluded that Bibica outperforms the industry in managing receivables, with both showing a positive trend towards enhanced efficiency.
Bibica excels in debt recovery, outpacing the industry average due to its efficient debt collection processes and a skilled team of professionals The company implements a stricter credit policy, attracting customers with higher credit quality and improved solvency Additionally, Bibica operates within an industry characterized by lower credit risk, further enhancing its ability to recover debts effectively.
Bibica's inventory turnover rose from 8.23 to 10.10 turnovers per year between 2020 and 2022, indicating a slowdown in sales that has resulted in inventory stagnation, increased storage costs, and diminished solvency Higher inventory levels pose risks of product obsolescence, particularly for items with short shelf lives, while costs associated with preservation and inventory management are on the rise These challenges are attributed to various factors, including a decrease in sales driven by economic recession and shifting customer preferences, leading to excessive stockpiling Additionally, Bibica may be increasing its inventory of raw materials and finished goods to prepare for future production needs or to benefit from bulk purchasing discounts.
Figure 2.2.1.2 VQTK chart Note: Green: BIBICA Company ; Red: Industry (HAIHA)
Bibica's inventory turnover is always lower than the industry in the period 2020 -
In 2022, Bibica demonstrated superior inventory management efficiency compared to the industry average, likely due to its modern inventory management system and effective stocking procedures The company's high sales volume contributes to rapid inventory turnover, and it operates within an industry characterized by a lower inventory ratio than the overall market.
conclusion
Blocks and indexes
Based on the results of block analysis and Bibica index, it can be seen that the company's financial situation has some of the following strengths and weaknesses:
Long-term assets growth: Shows that Bibica is investing in machinery, equipment and infrastructure to improve production capacity.
Increased equity: Enhances financial autonomy and reduces debt risk.
Profit after tax increased sharply in 2022: Showing the company's recovery after the COVID-19 pandemic.
Revenue from sales and service provision increases again in 2022: Showing that market demand for Bibica's products is gradually recovering
The proportion of short-term assets decreased: Showing that Bibica's short-term solvency is declining.
Increased inventory in 2022: Could lead to high storage costs and obsolescence risks.
Liabilities increase in 2021: Increasing financial risks for the company.
Based on the results of analyzing strengths and weaknesses above, our team proposes the following financial management solutions:
Optimize short-term asset management:
Reduce inventory: Apply effective inventory management methods such as JIT (Just-in-time) or MRP (Material Requirements Planning) to minimize inventory, save storage costs and reduce risks outdated ro.
To expedite debt collection, implement flexible and efficient payment policies that reduce the time required for recovery Regularly assess customers' financial conditions to mitigate the risks of bad debts, and employ prompt and effective strategies to address overdue payments.
Effective cash management: Detailed cash flow planning and accurate forecasting of future capital needs Search for suitable loan sources at reasonable costs
Effective use of mobilized capital sources.
Strengthen long-term asset management:
To achieve effective investment, it is crucial to conduct a thorough analysis of projects prior to implementation, ensuring both efficiency and profitability Diversifying your investment portfolio can significantly reduce risk, while regular monitoring and evaluation of investment performance are essential for long-term success.
Asset maintenance: Periodically maintain fixed assets to ensure operational efficiency and prolong asset life.
Effective management of capital resources:
To optimize capital structure, it is essential to establish a balanced debt-to-equity ratio that promotes financial safety and solvency Utilizing long-term loan capital for long-term investment projects can enhance stability, while considering the issuance of additional shares can be a strategic move to raise capital when needed.
Search for suitable loan sources: Search for loan sources with low interest rates and flexible payment conditions Take advantage of the Government's preferential loan programs.
Effective use of mobilized capital sources: Use mobilized capital sources for effective investment and business activities Avoid wasting capital and using capital in ineffective activities.
Monitor and evaluate financial performance:
Establish a system to regularly monitor and evaluate financial performance.
Use appropriate financial indicators to evaluate business performance.
Analyze the causes of deviations and take timely corrective measures.
Parameter
Based on BIBICA's solvency results, it can be seen that the company's financial situation has some of the following strengths and weaknesses:
Most companies have a current ratio greater than 1, indicating good ability to pay short-term debt.
In 2020, the company's current ratio stood at 1.67, surpassing the industry average of 1.49, indicating a strong capacity to meet short-term liabilities with short-term assets Although the current ratio is projected to decline to 1.11 in 2021, it remains above the industry average of 1.42, reflecting continued financial stability.
The company's quick ratio (Rq) is 1.37, higher than the industry average of 1.29,demonstrating the ability to pay quickly without taking into account inventory In
2021, this ratio drops to 0.95, lower than the industry average of 1.22 but still shows that the company maintains a certain level of liquidity.
The average collection period (KTTbq) for the company in 2020 was 73.90 days, significantly shorter than the industry average of 194.50 days, indicating effective debt collection practices In 2021, the average collection period increased to 65.48 days, yet it remained considerably lower than the industry average of 220.90 days, demonstrating continued efficiency in managing receivables.
A company's inventory turnover (VQTK) reflects its efficiency in utilizing inventory capital, with a higher turnover indicating better performance In 2020, the company's inventory turnover was 8.23, significantly surpassing the industry average of 5.27, demonstrating effective inventory management Although the turnover decreased to 7.77 in 2021, it remained above the industry average of 6.01, indicating continued strong inventory efficiency.
The current payout ratio for many companies exceeds 1, indicating a potential decline in their ability to meet short-term debt obligations from 2020 to 2022.
Between 2020 and 2022, the quick ratio of companies has shown a downward trend, indicating a potential decline in their ability to cover short-term debts using operating cash flow in the future.
The capital recovery period of companies tends to increase in the period 2020-
2022 This shows that the time needed to recover investment capital in inventory of companies is lengthening, which can affect the efficiency of capital use.
2022: The average collection period increases significantly to 112.41 days, although still lower than the industry average of 185.67 days, but shows a worsening trend in debt collection efficiency.
Implementing a rigorous debt collection process is essential for effective financial management This involves closely monitoring outstanding debts and categorizing customers based on their credit risk levels Employing efficient debt collection strategies, such as sending timely payment reminders, negotiating directly with customers, and utilizing external debt collection services, can significantly enhance recovery rates and minimize losses.
Provide early payment incentives to customers, such as payment discounts, promotional gifts, etc to encourage customers to pay quickly.
Analyze costs in detail and identify costs that can be cut, such as stationery costs, reception costs, travel costs,
Look for service providers with more competitive prices.
Apply energy saving measures, such as using energy-saving light bulbs, turning off electrical appliances when not in use,
Apply an effective inventory management system to monitor inventory levels and optimize inventory turnover Use inventory management software to automate inventory management processes, saving employees time and effort.
To effectively minimize excess inventory, it is essential to implement precise demand forecasting techniques Utilizing methods such as business cycle analysis, historical trend evaluation, and market analysis can significantly enhance the accuracy of demand predictions These strategies collectively contribute to more informed inventory management decisions, ensuring optimal stock levels and reducing the risk of overstocking.
Liquidate old or expired inventory Apply discounts and promotions to sell off old or expired inventory.
Based on the results of analyzing BIBICA's debt parameters, it can be seen that the company's financial situation has some of the following strengths and weaknesses:
Total debt ratio is lower than the industry:
Bibica's total debt ratio in 2020 (28.99%), 2021 (40.14%), and 2022 (26.32%) are all lower than the industry average (60.58%, 59.67%, 55.62%).
This shows that Bibica has better debt management ability, helping the company maintain financial stability and minimize financial risks.
Debt-to-equity parameters are lower than the industry:
Bibica's debt-to-equity ratio in 2020 (0.41), 2021 (0.67), and 2022 (0.36) is lower than the industry (1.54, 1.48, 1.25).
This reflects caution in using financial leverage, helping the company maintain a low average debt level, reducing financial pressure from debt.
Debt-to-asset parameters are lower than the industry:
Bibica's debt-to-asset parameters in 2020 (0.29), 2021 (0.40), and 2022 (0.26) are all lower than the industry (0.61, 0.60, 0.56).
This shows that Bibica has a reasonable asset and debt management strategy, helping to minimize financial risks and enhance financial stability.
High number of loan interest guarantees (with amortization):
Bibica's number of loan interest guarantees in 2020 (3.91), 2021 (6.79), and 2022 (6.41) is higher than the industry (1.48, -0.53, 0.75).
Bibica demonstrates a robust financial capacity by generating sufficient profits to not only cover its interest expenses but also outperform competitors within the same industry This indicates effective management of financial obligations and a strong overall performance.
Volatility of total debt ratio:
Although the total debt ratio is low, the fluctuation from 28.99% (2020) to 40.14%
(2021) and decreasing to 26.32% (2022) shows unstable fluctuations.
This fluctuation may reflect changes in financial strategy or external factors affecting the company.
Fluctuations in debt-to-equity and debt-to-asset parameters:
In 2021, the notable rise in financial ratios, with a debt to equity of 0.67 and a debt to assets of 0.40, suggests the presence of unexpected changes or significant events that impacted the company's financial structure during that year.
Although this parameter remains at a low average level, this instability may raise concerns about the ability to maintain stable financial indicators in the future.
Based on the results of analyzing strengths and weaknesses above, our team proposes the following financial management solutions:
Maintain and strengthen debt management:
Bibica should actively manage its borrowing costs by negotiating the lowest possible loan interest rates By leveraging strong relationships with banks and financial institutions, the company can secure preferential loan terms, ultimately reducing expenses and enhancing financial stability.
Regularly reassess your debt strategy to maintain a balanced debt-to-equity ratio and avoid excessive reliance on debt Implement financial instruments like interest rate hedging to safeguard against fluctuations in interest rates.
Bibica should explore various financial avenues to enhance its funding strategy, moving beyond traditional bank loans This includes considering options such as issuing bonds or stocks, engaging in joint ventures, and seeking investment from funds to diversify its financial sources effectively.
Set up a reserve fund: Create a reserve fund to ensure the company can cope with emergency or unexpected situations, minimizing financial risks when there are market fluctuations.
Effective working capital management: Enhance working capital management by optimizing debt collection processes, reasonable inventory management and extending payment terms with suppliers without affecting the relationship. relationship.
Invest in technology and process improvements: Use technology and improve production processes to reduce costs, increase efficiency and increase profitability. This will help strengthen the company's financial capacity.
Improve financial information and forecasts:
Detailed and transparent financial reporting system: Create a detailed, transparent and regularly updated financial reporting system to provide accurate and timely information for management in decision making.
Utilizing modern financial forecasting tools enables businesses to accurately predict cash flow, profits, and other key financial metrics This proactive approach enhances financial planning and allows companies to swiftly adapt to changes in the business environment.
Strengthen asset and investment management:
Reassess the investment portfolio: Regularly reassess the company's investment portfolio to ensure that investments provide good returns and do not pose too much risk.
Invest in projects with high added value: Focus on investing in projects that bring high added value and have future development potential, to maximize profits and enhance competitiveness
Based on the results of analyzing BIBICA's profitability parameters, it can be seen that the company's financial situation has some of the following strengths and weaknesses:
BIBICA demonstrates a strong ability to manage costs and generate substantial profits from its core operations, evidenced by its relatively high gross profit margin in insurance and credit card services compared to net revenue.
Regarding asset utilization efficiency, BIBICA has a relatively high total asset turnover ratio, which shows that the company is effectively using its assets to generate revenue
In terms of profitability on capital, BIBICA has a relatively high return on equity (ROE), showing that the company is generating good profits for its shareholders.
Regarding net profit margin, BIBICA has a relatively low net profit margin, showing that the company is incurring many expenses, affecting the company's net profit.
Regarding capital efficiency, BIBICA has a relatively low return on assets (ROA), showing that the company needs to improve capital efficiency to generate better profits.
BIBICA Joint Stock Company demonstrates strong profitability, effective asset utilization, and solid returns on capital Nevertheless, to boost operational efficiency and strengthen its competitive edge, the company must focus on enhancing its net profit margin and capital efficiency.
Based on the strengths and weaknesses above, the following solutions can be proposed:
