Analysis of the management and using the working capital in ltd hùng hà

The rate of return of working capital...14 Chapter 2: THE STATUS OF MANAGEMENT OF WORKING CAPITAL AND EFFICIENT USE OF WORKING CAPITAL IN HÙNG HÀ LTD...15 2.1.. Company...33 Table 2.10:

THE ADVANCED PROGRAM - -

UNDERGRADUATE THESIS

ANALYSIS OF THE MANAGEMENT AND

USING THE WORKING CAPITAL IN LTD HÙNG HÀ

TRẦN THỊ HUYỀN TRANG

Academic year 2010 - 2015

THE ADVANCED PROGRAM - -

UNDERGRADUATE THESIS

ANALYSIS OF THE MANAGEMENT AND

USING THE WORKING CAPITAL IN LTD HÙNG HÀ

Class: K44-Agricultural Economics-Finance

Academic year: 2010 - 2015

Hue, June 2015

The school and the family always wants us to study, research and effectively applied to practical life Work completed thesis was initially experiment on combining theory and practice in the university environment, the personal effort and the help of many people So the result has been the economic bachelor thesis following is indispensable the most sincere gratefulness

First of all, I would like to thank my teachers in school Hue University of Economics, thank the teachers teaching with useful knowledge and valuable experience applied to the subject and above all the riches knowledge baggage for us

on the way of my career.

In particular, I would like to thank to Mr Truong Quang Dung - who directly guided me throughout the process of thesis with words of enthusiastic comments Thank leadership in Hùng Hà that provided an opportunity for me to practice at the unit; Thank , accountants who helped me so much during practicing and collecting documents for research subjects

Đồng Hới, June 2015

Student

Trần Thị Huyền Trang

Trang

INTRODUCTION 1

Chapter 1: RATIONALE FOR THE USE OF WORKING CAPITAL IN ENTERPRISES 5

1.1 Working capital in enterprises 5

1.1.1 The concept and characteristics of working capital in the enterprise 5

1.1.2 Characteristics of working capital 6

1.1.3 Classification and structure of of working capital 7

1.1.4 The role of working capital 10

1.2 Efficiency use of working capital 11

1.2.1 The concept of efficiency in working capital 11

1.2.2.1 The objective factors 11

1.2.2.2 The subjective factor 11

1.2.3 A means of enhancing efficiency in working capital 12

1.2.4 The evaluation criteria efficiency using in working capital 13

1.2.4.1 Rotated speed of working capital 13

1.2.4.2 The level of savings working capital 13

1.2.4.3 The level of undertake in working capital 14

1.2.4.4 The rate of return of working capital 14

Chapter 2: THE STATUS OF MANAGEMENT OF WORKING CAPITAL AND EFFICIENT USE OF WORKING CAPITAL IN HÙNG HÀ LTD 15

2.1 General overview of company, Ltd Hùng Hà 15

2.1.1 The process of formation and development of the company 15

2.1.1.1 Outline of the formation and development of the company 15

2.1.1.2 Functions and duties 15

2.1.2 Generalizing business and production activities of the company in 3 years 15

2.1.2.1 Labor situation 15

2.1.2.3 Results of business activities 20

2.1.3 Organization of the managerial apparatus in company 21

2.1.2.1 Diagram of organization of the managerial apparatus in company 21

2.1.2.2 The functions, duties and power s of the constituent parts of the company's managerial apparatus 21

2.2 Administrators in working capital and efficiency using working capital in Hung Ha Ltd 24

2.2.1 Composition and structure of working capital in company 24

2.2.1.1 Structure of working capital in total capital of business 24

2.2.2.2 Structure of capital items in total equity of business 25

2.2.2 Analyzing the situation ensuring the capital for business operations 26

2.2.2.1 Capital financing situation of Companies over 3 years 26

2.2.2.2 The ratio WC/Short - term debt 28

2.2.3 Administrators of working capital in company 29

2.2.3.1 Administrators of capital in cash 29

2.2.3.2 Administrators of inventories 33

2.2.3.3 Administrators of accounts receivable 37

2.2.4 Efficiency using in working capital in Company 39

2.2.4.1 Rotated speed of working capital 40

2.2.4.2 The level of savings working capital 41

2.2.4.3 The level of undertake in working capital 41

2.2.4.4 The rate of return of working capital 41

Chapter 3: INTEGRATED ASSESSMENT AND SOME METHODS IN ORDER TO ENHANCE THE MANAGEMENT AND USING THE WORKING CAPTITAL IN HÙNG HÀ LTD 44

CONCLUSION 48

REFERENCE LIST 49

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Table 2.1: Labor situation and average income year 2010, 2011, 2012, 2013, 2014

16

Table 2.2: Situation of assets, capital in 2010, 2011, 2012, 2013, 2014 18

Table 2.3: Results of business activities over 5 years 2010, 2011, 2012, 2013, 2014 20

Table 2.4: Structure of working capital in total capital of business in 5 years 2010, 2011, 2012, 2013, 2014 24

Table 2.5: Structure of capital items in total equity of business over 5 year 2010, 2011, 2012, 2013, 2014 25

Table 2.6: The situation of capital financing in 5 year 2010, 2011, 2012, 2013, 2014 .26

Table 2.7: The ratio WC/Short - term debt in 5 years 2010, 2011, 2012, 2013, 2014 28

Table 2.8: Solvency of Hùng Hà Ltd Company 31

Table 2.9: Structure of inventory in total inventory of Hùng Hà Ltd Company 33

Table 2.10: Structure of receivables in total receivables of the company 38

Table 2.11: Efficiency using in working capital in Company 40

Today, in the market economy, the demand for capital for each business becomesmore important and urgent because the enterprises directly faced with the volatility ofthe market, with competition from the domestic enterprises and foreign customersshould require the use of capital so that reasonable to provide high efficiency inproduction and business activities and increase its competitive strength.

Enterprises operating under the independent accounting methods, to financialautonomy and is responsible of the results of its operations to profitability for thebusiness To achieve this any production business enterprise would need to payattention to the issue of capital, how to use and manage their capital to determine theexistence and development of enterprises

Therefore, significant capital is very important in analyzing business operations

in order to assess the use of corporate capital to achieve superior results at lower cost.Also on this basis provides useful information for the objects, such as investors, creditinstitutions Identify actual financial situation for effective investment decisions.The purpose of the enterprise to participate in the production process that isheadquarters of the key benefits that are profitable The crux of the matter is theworking capital (WC), WC is the key factor to make a profit for each business Itdirectly impacts the daily, hourly everywhere during business activities of theenterprise, as a condition for implementing enterprise-scale expansion, technicalinnovation, improve living standards for workers, and improve its position in themarket Stemming from the role and importance as well as the practical requirementsfor the efficiency of the use of corporate WC, the research to identify /solutions toimprove the efficiency WC always become issue necessarily contribute to ensuring thesurvival and development of enterprises long upstairs

During practice the actual survey process in Hùng Hà Ltd Company of I noticedthat companies are having difficulty in working capital issues, especially in themanagement and use of WC Here are the problems the company is interested in:

The company established in conditions not much equity capital, to serve theproduction needs of business, need large amounts of capital beyond the company'sability to borrow from banks to other credit institutions With its big loan amount, asfinancial expenses (interest expense high) This large effect on the efficiency ofproduction and business operations of the Company.

Due to the small size of the company is not focused on managing an effectiveway of working capital which saw profit trends are made, there are benefits only bringimmediate but then it did not carry to be effective as it expected enterprise, which isalso the cause of the working capital of the business is stagnant

Stemming from reality and perception is required after some time requiresgraduation exercises in Hùng Hà Co Ltd., with the help of instructors, I choose the

topic "Analysis of the management and using the Working Capital in Ltd Hùng Hà " to

do thesis, with the desire to apply the knowledge learned in practice to analyze theefficiency of capital in Hùng Hà Limited Company in the future

- The overall objective of this study is to analyze of the use of the Working

Capital in Ltd Hùng Hà in last 5 years Since then propose measures to apply to use ofworking capital in a most efficient, profitable and beneficial to the company

- The Specific objectives is

To analyze proportion of working capital in total capital in the company

To assess the status of the working capital efficiency of the company in thelast 5 years

To analyze, synthesize and evaluate the results achieved and the remainingface in managing working capital in the company

To learn the factors affecting working capital

To illustrate the administration of working capital in the company

- The scope of research

Subjects of the research: Research focused on capital efficiency in enterprises

Scope of the study:

Time research: The use of capital operation business productivity over theyears 2010-2014

Space: At Ltd Hùng Hà

1 Rotat ed speed of working capital

Number of times rotation in WC

Formula:

W AV

M L

K



Note: L is number of times rotation in WK in the period

M is the total circulation of capital (or net revenues) in the period

WKAV the average working capital in the period and is calculated as follows

V , V 2 ,V3,V4 : the average working capital in quarter 1,2,3,4

Vdq1 : working capital in started of the first quarter

Vcq1,Vcq2, Vcq3, Vcq4 : working capital in the end of quarter 1,2,3,4

Rotated period in working capital

Note: K is rotated period in WC

WCAV is average WC in the period

M is total circulation of capital (or net revenues) in the period

N is number of date ( 360 days/year, 90 days/quarter, 30 days/month)

2 The level of savings working capital.

Note: Ms is the level of savings WC

M1 is total circulation of capital (or net revenue) reporting period

K1, K0 is circulation of capital period plan period, reporting period

L1,L0 is number of revolutions plan period, reporting period

3 The level of undertake in working capital.

Formula: The level of undertake in WK=WK AV

NR

Note: WKAV is average capital in the period

NR is net revenues in the period

4 The rate of return of working capital

Formula: The rate of return of WK=W

AV

TP K

Note: TP total profit before tax or after tax

WCAV is the average W in the period

Chapter 1:

RATIONALE FOR THE USE OF WORKING CAPITAL

IN ENTERPRISES

1.1 Working capital in enterprises

1.1.1 The concept and characteristics of working capital in the enterprise

Working capital in the business is the cash advance capital to invest, purchase assets

of the business to ensure that business production process is conducted continuously

In the commercial business, working capital is often expressed through forms:Cash and short-term financial investments, short-term accounts receivable, inventoriesand other working products

Working capital (abbreviated WC) is a financial metric which represents

operating liquidity available to a business, organization or other entity, includinggovernmental entity Along with fixed assets such as plant and equipment, workingcapital is considered a part of operating capital Gross working capital equals tocurrent assets Working capital is calculated as current assets minus current liabilities

If current assets are less than current liabilities, an entity has a working capitaldeficiency, also called a working capital deficit

A company can be endowed with assets and profitability but short of liquidity ifits assets cannot readily be converted into cash Positive working capital is required toensure that a firm is able to continue its operations and that it has sufficient funds tosatisfy both maturing short-term debt and upcoming operational expenses Themanagement of working capital involves managing inventories, accounts receivableand payable, and cash

Working capital is a common measure of a company's liquidity, efficiency, andoverall health Because it includes cash, inventory, accounts receivable, accountspayable, the portion of debt due within oneyear, and other short-term accounts, acompany's working capital reflects the results of a host of company activities,

including inventory management, debt management, revenue collection, and payments

quick ratio

One of the most significant uses of working capital is inventory The longerinventory sits on the shelf or in the warehouse, the longer the company's workingcapital is tied up

When not managed carefully, businesses can grow themselves out of cash byneeding more working capital to fulfill expansion plans than they can generate in theircurrent state This usually occurs when a company has used cash to pay for everything,rather than seeking financing that would smooth out the payments and make cashavailable for other uses As a result, working capital shortages cause many businesses

to fail even though they may actually turn a profit The most efficient companiesinvest wisely to avoid these situations

1.1.2 Characteristics of working capital

Working capital of the enterprise move unceasing through the stages of thebusiness cycle that is reserves, production and circulation This process is happeningconstantly, continuously and repeatedly in cycles and is called the cycle of the workingcapital cycle The movement of the working capital expressed through the followingoverview:

 T-H-Production-H'-T '(For manufacturing enterprises)

 T-H-T '(For commercial, service enterprises)

In the period 1 (TH): starting the cycle, WC is used to purchase objects of labor

in reserve, production of key raw materials, auxiliary materials, tools and instruments

At this stage, capital already change forms from capital in cash to capital ingoods materials

In the period 2 (H-SX_H '): in stage enterprise engaged in the production ofproducts, the reserve materials are phased into production Experiencing theproduction of commodity products were made Thus at this stage in working capitalwas forms of commodity investment capital shifts into capital unfinished products andthen shifts into the finished capital

In the period 3 (H'-T '): the enterprise conducts product sales and collect moneyfor working capital and has since finished products capital forms shifts into monetarycapital return starting point of the capital cycle Ending cycle Comparison between Tand T ', If T'> T means successful business enterprise for working capital in productionwere to proliferate, enterprises preserve and develop the WC and contra This is animportant factor used to assess the effectiveness working capital of the enterprise.Thus, working capital movement always so structure fluctuate of working capitaland reflects the movement's ongoing business operations

1.1.3 Classification and structure of of working capital

It is classified working capital in the enterprises according to the followingcriteria:

Based on the role of working capital for the production process, working capital is divided into 3 categories:

- Working capital in reserve and produced stages include:

The capital of main raw materials is the value of reserve materials for production.When engaged in production, it incorporates product entity

The capital of secondary materials is those reserve materials for production to beused to increase product quality, complete product or service of the management.The fuel capital is the value of the type of reserved fuel used for production asgasoline, oil, coal

Capital of spare parts include the value of the packaging materials used forpackaging in the production and consumption of products.

And the capital of small working tools is the value of labor means with lowvalue, while using short, do not qualify is fixed assets

- Working capital in manufacturing process include :

The capital of manufacturing products is value of unfinished products duringproduce or is located on the working locations, waiting the next processing

The capital of homemade semifinished products is worth these unfinishedproducts but different from products being manufacturing is it has completed one ormore of certain processing stages

The capital of unsold cost wait allocation is costs in the period, but effective formany cycles , thus excluding all other prices in a period but also allocating to the nextperiod

- Working capital in circulation include:

Capital of finished product is a monetary expression of the product in storage andprepare for consumption

Capital in cash includes cash on hand, bank deposits, short-term investments,mortgages, escrow, short-term escrow

Capital of payment is the accounts receivable, the advance incurred during thepurchase of supplies and goods or internal payment

Based on the form of expression of working capital

- Capital in cash includes the monetary capital of cash, bank deposits, capitalaccounts in payment and securities investments in the short term

- Inventories are the working capital accounts have form of expression in specificartifacts as raw materials, unfinished products, semi-finished and finished products

- Accounts receivables is debts of customer receivables, advance amounts to beinternally

Based on ownership relations

In this way it is divided into 2 types of working capital:

- Equity is the number of working capital owned by the enterprise, the enterprise

has full the right to possession, use dominant and determine

- Debts is amounts of working capital is formed from loans from commercialbanks or other financial institutions, loans through the issuance of bonds or customerdebts unpaid Enterprises have only the right to use in a certain period

Based on the formed source of capital.

- Capital in internal enterprise includes charter capital, own capital and capitaloccupancy

Charter capital is number of working capital is formed from the initial chartercapital when establish or supplement the charter capital in the production and businessprocess of the enterprise

Own capital is supplemented by the enterprise in the process of production andbusiness as profits of the reinvested enterprises

Capital occupancy reflects the capital that the enterprise occupies the legitimacy

of the institutions and individuals in the process of production and business duerelations to payments arising as debt providers, debt buyers, creditors workers but notpayment term

- External capital sources of enterprise includes:

Joint venture capital, link the number of working capital is formed from jointventures capital of the parties to a joint venture enterprise

Capital borrowing loans from commercial banks or credit institutions, loans ofemployees in enterprise, loans to other enterprises

Capital mobilized from the capital market by issuing stocks or bonds

Based on the time of mobilization and use of funds

This way of working capital is divided into temporary working capital andworking capital frequently

- The temporary working capital is capital short term characteristic mainly tomeet the demand with the temporary characteristics of the working capital generated inthe production process of the enterprise business This capital consists of short-termbank loans, credit institutions and other short-term debts

- Frequent sources of working capital is capital which have characteristic ofstable to become necessary frequently working assets Sources include long-term debtand equity sources.

Frequently working capital = Frequently capital- Value of fixed assets (deductingdepreciation)

Or: Frequently working capital = total value of liquid assets - short-term liabilitiesWhere: Frequently capital = Equity + Long-term liabilities

1.1.4 The role of working capital

The capital in general and in particular working capital hold a decisive role inproduction and business, to ensure that the manufacturing process business isconducted frequently, constantly requires enterprise must have an number of certainmobility assets Working capital is present in all stages of production and business,from the procurement of materials and production to consumption of the product Theuse of working capital efficiency and ensure the needs of working capital will facilitateenhanced efficiency of working capital Therefore, labor capital is decisive inestablishing large production and business strategy of the business

Working capital is a prerequisite for the growth and development of businessesespecially for manufacturing enterprises, commerce By these enterprises in workingcapital accounted for a large proportion of total capital, the survival of the enterprisedepends heavily on the organization, management and use of working capital

Capital is an important tool to help enterprise test, control, reflecting theobjective characteristics of financial activities through which help enterpriseexecutives assess strengths, weakness in machine business as solvency, situationcirculation of supplies, goods and capital Since we can make the right decisions toreach the highest business efficiency

With ability of working capital flows will help enterprises can learn businessstrategy produced easily, respond promptly market demands as well as financial needs

in relations foreign policy, utilizing business opportunities and ability to provide credit

to customers, which is a big advantage in the market economy with acrimoniouscompetition

1.2 Efficiency use of working capital

1.2.1 The concept of efficiency in working capital

According to most general definition, the effect is a concept reflecting the level

of use of the necessary elements to engage in a certain activity with defined objectiveslaid out by man So efficiency WC can understand an economic categories used toassess the physical and human resources of the enterprise to achieve the highest results

in business processes with the lowest total cost

1.2.2.1 The objective factors

First is the element of the growth rate of the economy Slow growth economy,the purchasing power of the market will decrease, affecting the ability of the enterpriseproduct sales, less revenue and profit relieved, and so is the efficiency will reducecapital in general and WC in particular Conversely, if the economy growth is fast ,revenue and profitability of the business will increase thereby increasing the efficiency

of working capital

The second is the risk factor In conditions of market economy, many sectorsenterprises compete with each other, and the risks that companies face is theunpredictable changes of the economy In addition, unusual risks such as fire, flood also affects the efficiency of capital use

The third is the impact of the scientific and technological revolution Scientificand technological revolution reduces the value of assets and supplies So, ifenterprises do not catch up with the development of technology to adjust the value ofthe sold goods will lack competitiveness and affect the operational efficiency, thatshould reduce utilization of WC

In addition, the macroeconomic policy of State to the adjust of regimes, policies,legal, tax in each period of national development great impact on business activities

of enterprises During operation, any enterprise interested in and comply economicpolicy of the state to take measures to enhance efficiency WC

1.2.2.2 The subjective factor

Besides these objective factors, these factors belong to enterprise itself followingmay be mentioned also a huge influence on efficiency WC:

The first factor is the determination of demand of WC Because, identifieddemand of WC incorrectly will lead to an excess or shortage of capital in theproduction and business The excess or lack of capital that negatively affected theoperations of the enterprise.

If excess capital that can cause congestion of supplies of goods and slow-movingcapital, thereby giving rise to unnecessary costs, increase product costs; while notencouraging businesses to exploit the potential ability to improve their production andbusiness activities Conversely, lack of funds will not guarantee the production process

is continuous, sometimes have to stop production, affect the liquidity, and delayed itcontracts signed with customers

Next factor is related to the selection of invest plans If enterprises invest andproduce products that labor service, high quality services, designs suit the tastes ofconsumers, low prices, the products of the enterprises will quickly be consumed,increase cycle WC, enhancing efficiency WC, and contrary

The next factor is the level of management In the case of level of management ofenterprises is weak will lead to the loss of supplies and goods in process ofprocurement, storage, manufacture and consumption of products The consequence of

it is a waste WC, reduce efficiency in capital

Another subjective element belongs to the result of business and production of theenterprise Revenue and profits high or low reflect that WC use effective or not effective

→ On the basis of determining the factors subjective and objective impact on the

efficiency of WC above and enterprises need to study carefully the impact of eachfactor to take effective measures in the work organizations and using WC, the purpose

is to make the efficiency of working capital bring the highest

1.2.3 A means of enhancing efficiency in working capital

If the WC is an indispensable condition for any enterprises to conduct productionand business, the profits to determine the existence and development of enterprises.Clearly, these two factors have a causal relationship with each other, because, asalready in the hands of capital, the question is to how to use it to profitability, in otherwords, the economic benefits now motivated businesses to manage effective use of

capital, increased accumulation to perform reproduce and expand the operation scale.Effective using in working capital is one of the general criteria for assessing thequality of the management and use of the general business of the enterprise Throughthe evaluation indicators efficiency using in capital enables financial managers inenterprises with accurate view, comprehensive about management situation and using

WK of their unit whereby measures proposed, policies, the right decisions, appropriate

to raise efficiency using of WC

In short, the job of managers is to improve the state use of capital researchthrough effective indicators , and the significance of improving the efficiency using in

WC is raising benefits profit

1.2.4 The evaluation criteria efficiency using in working capital

1.2.4.1 Rotated speed of working capital

Rotated speed can be measured by two criteria were: Number of rotation (or thenumber of revolutions ) and rotated period The faster working capital cycle is, theless rotation period has been, leading to efficiency in using WC of enterprise higherand contrary

- Number of times rotation in WC

Number of times rotation in WC said that, in one period (usually a year) howmuch WC rotate? This indicator assess efficiency using on the relationship comparisonbetween results of production with the number of average working capital in theperiod This index as high as better

- Rotated period in working capital

Rotated period in WC said that how many days WC rotate every once? Contrary

to the the target of the number of revolutions in WC

Time for rotation as short as demonstrated enterprises flexible use of capital,savings, speed up the Rotation

1.2.4.2 The level of savings working capital

This is a direct indicator reflect saving WC due to speed up the the capitalrotation Therefore enterprises can increase the total the capital rotation withoutincreasing or not significantly increasing the scale of WC

1.2.4.3 The level of undertake in working capital

This indicator reflects the level necessary WC used to create an net revenuecopper WC level undertake smaller the WC efficiency higher, the greater thesavings WC

1.2.4.4 The rate of return of working capital

The rate of return of WK said that one copper WC can create how many copperprofits The higher this index demonstrate the higher efficiency of WC

Chapter 2:

THE STATUS OF MANAGEMENT OF WORKING CAPITAL

AND EFFICIENT USE OF WORKING CAPITAL

IN HÙNG HÀ LTD

2.1 General overview of company, Ltd Hùng Hà

2.1.1 The process of formation and development of the company

2.1.1.1 Outline of the formation and development of the company

Hùng Hà Limited Liability Company has headquarters at No 31, Lê Lợi Street Đồng Hới City - Quảng Bình Province

-It formed in 2007 with service functions of buying and selling building materials.Hùng Hà is a base unit with legal personality, independent economic accounting,bank accounts and used its own seal according to prescribed modality

2.1.1.2 Functions and duties

Functions and duties of the enterprises under the license to operate as follows:Companies dealing in building materials, interior decoration products, sanitaryequipment, household furniture, organization of services for life

The company sells goods to construction and retail service to the people Loadingand unloading cargo services, warehouse rental

2.1.2 Generalizing business and production activities of the company in 3 years

2.1.2.1 Labor situation

In 5 years, the labor situation has changed dramatically From 2010 to 2014, thenumber of employees increased, relatively stable, secure working

Table 2.1: Labor situation and average income year 2010, 2011, 2012, 2013, 2014

(Unit: million VNĐ)

Indicate

2010 2011 2012 2013 2014 2011/2010 Change 2012/2011 Change 2013/2012 Change 2014/2013 Change

No % No % No % No % No % No % No % No % No %

Total labor ( people) 47 100 54 100 60 100 60 100 68 100 7 14.89 6 11.11 0 0.00 8 13.33

Concerning governance problems in working capital, tables above the totalnumber of workers are classified according to the criteria of the workforce, because,this is one of the expression of the management level Unskilled workers accounted forthe highest proportion of the total labor, labor showed the company level is low.

Some general observations derived from tables 2.1 as follows:

- Total number of employees increased over the years, specifically in 2011increased 3 employees respectively 3/47 = 6.38 % compared to 2010; in 2012increased 8 employees respectively 8/50 = 16 % compared to 2011; in 2013 increased

2 employees respectively 2/58 = 3.4 % compared to 2012; in 2014 increased 4employees respectively 4/60 = 6.67 % compared to 2013

- Labors with higher university have lowly proportion that is 1 people

- Labor with unskilled workers have numerically dominate in total labor havingincreased over the years

2.1.2.2 Situation of assets, capital

Table 2.2: Situation of assets, capital in 2010, 2011, 2012, 2013, 2014

Change 2013/2012

Change 2014/2013 Money % Money % Money % Money % Money % Money % Money % Money % Money %

A Total Asset 66,099 100 74,552 100 68,202 100 80,314 100 84,425 100 8,453 12.79 -6,35 -8.52 12,112 17.76 4,111 5.12

1 Short term asset 49,012 74.15 59,144 79.33 52,493 76.97 64,264 80.02 67,604 80.08 10,132 20.67 -6,651 -11.25 11,771 22.42 3,34 5.20

2 Long term asset 17,087 25.85 15,408 20.67 15,709 23.03 16,05 19.98 16,821 19.92 -1,679 -9.83 301 1.95 341 2.17 771 4.80

B Total Capital 66,099 100 74,552 100 68,202 100 80,314 100 84,425 100 8,453 12.79 -6,35 -8.52 12,112 17.76 4,111 5.12

1.Equity 24,682 37.34 37,929 50.88 29,841 43.75 43,213 53.81 44,021 52.14 13,247 53.67 -8,088 -21.32 13,372 44.81 808 1.87 2.Liabilities 41,417 62.66 36,623 49.12 38,361 56.25 37,101 46.19 40,404 47.86 -4,794 -11.57 1,738 4.75 -1,26 -3.28 3,303 8.90

( Source: From Hùng Hà Ltd Company )

- Regarding the situation of asset:

Affected the business characteristics of the Company should be short-term asset

in total asset structure is always a large proportion over 5 years of research In 2011,short term assets increased 49,012 over 2010, to 59,144 million VNĐ This is theresult of leveraging these advantages have been the capital this year, which boosted thetrading activities, increased inventories, receivables increased leading to short-termasset In 2012, maintaining the consumption growth policy, however complicated bythe volatility of the market and limit the work of management, production and businessactivities were difficult; This year short-term asset reduction is 6,35 compared to 2011

In 2013, short term assets increased 52,493 over 2012 to 64,264 million VNĐ In

2014, short term assets increased 64,264 over 2013, to 67,064 million VNĐ

Long-term assets are accounted for over 5 years a small percentage of total asset

In 2011 long-term asset decreased 1,679 with 9.83 % compared to 2010 Year 2012long-term asset increased 301 with 1.95 % compared to 2011 In 2013 long-term assetdecreased 341 with 2.17 % by over 2012 But in Year 2014 long-term asset wereincreased 771 with 4.8 % compared to 2013

- On the situation in the capital

In the structure of total capital, in 2010, liabilities account for a larger proportionthan equity Conversely, in 2011, this structure changes, equity accounted proportion50.88 % ; when liabilities accounted proportion 49.12 % Year 2012, equity decreasedand liabilities increased, resulting in operating capital of the company is still liabilities

In 2013, this structure changes, equity accounted proportion 53.81 % ; when liabilitiesaccounted proportion 46.19 % Year 2014, equity and liabilities increased In general,year 2010, 2012, 2013 ability to autonomy about financial is low In year 2011, 2014financial balance basically is safe Above are the most common comments to make theoriginal look pretty overview of the situation of the capital, a specific analysis of thecapital will be going deep assessment of the status of management and use of funds inthe following section

2.1.2.3 Results of business activities

Table 2.3: Results of business activities over 5 years 2010, 2011, 2012, 2013, 2014

(Unit: million VNĐ )

2010 Year 2011 Year 2012

Year 2013

Year 2014

Revenue (million VNĐ) 57,761 86,551 116,886 129,761 149,778Cost 66,682 83,550 112,665 124,758 140,457Profit before tax

(million VNĐ) -8,921 3,001 4,221 5,003 9,321

( Source: From Hùng Hà Ltd Company )

In 2010, due to the impact of the world financial crisis, that affects businessactivities of the company The result is that in this year, the company make losses withprofit before tax is - 8,921

Until 2011, from experience operation in 2010, along with the solidarity work ofthe members of the company Simultaneously, this year, the company is the financialassistance of financial support to ensure that all financial operations run smoothly Sobusiness and production activities in 2011 achieved positive results, profit before tax is3,001

In 2012, 2013, 2014 the revenue increased but profit before tax is positive Due

to the complex fluctuation in the conditions of market forecasting business risk of thecompany working well Revenue achieved was offset by the cost of spent, thecompany have gains 4,221 in 2012; 5,003 in 2013 and 9,321 in 2014

2.1.3 Organization of the managerial apparatus in company

2.1.2.1 Diagram of organization of the managerial apparatus in company

a Chief executive officer

Chief executive officer is the legal representative for the company Who is dailyoperations of the company; efficient use of resources

Chief executive officer

Deputy director

Business

department

Organized administrative departments Engineering department Accounting department Guard