Solutions to improve business performance in hoang long mechanics technology joint stock company

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --- PHAN TIẾN THÀNH SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE IN HOANG LONG MECHANICS TECHNOLOGY JOINT STOCK COMPANY GIẢI PHÁP NÂNG

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

PHAN TIẾN THÀNH

SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE

IN HOANG LONG MECHANICS TECHNOLOGY

JOINT STOCK COMPANY

GIẢI PHÁP NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH TẠI CÔNG TY CỔ PHẦN CƠ KHÍ

CÔNG NGHỆ HOÀNG LONG

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

PHAN TIẾN THÀNH

SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE

IN HOANG LONG MECHANICS TECHNOLOGY

JOINT STOCK COMPANY

GIẢI PHÁP NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH TẠI CÔNG TY CỔ PHẦN CƠ KHÍ

CÔNG NGHỆ HOÀNG LONG

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS NGUYỄN XUÂN HUYNH

HÀ NỘI - 2020

DECLARATION

I confirm that the research in the thesis is the result of my independent work during study and research period and it is not published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and have the permission of the authors

I assure in front of the Thesis defense council, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date………

Author

Phan Tien Thanh

ACKNOWLEDGEMENT

I would like to express my sincere thanks to the teachers and Faculty of Business Administration who have devotedly taught and imparted valuable knowledge to me during the course of studying at the school In particular, I would like to sincerely thank PhD Nguyen Xuan Huynh has kindly instructed me to complete this thesis

Research results are my best effort in learning and research However, I would like to receive suggestions to continue adding and perfecting the Thesis

Hanoi, ……… 2019

Phan Tien Thanh

TABLE OF CONTENTS

LIST OF FIGURES i

LIST OF TABLES ii

OPENING 1

1 The urgency of the topic 1

2 Overview 1

3 Research objectives 2

4 Research subjects 3

5 Scopes of research 3

6 Research method 3

7 Contents of the thesis 5

CHAPTER 1: THEORETICAL AND OVERVIEW OF THE BUSINESS PERFORMANCE OF THE ENTERPRISE 6

1.1 Definition and importance of business performance analysis 6

1.1.1 Concept of analyzing business performance 6

1.1.2 Classification of business performance 6

1.1.3 The require to improve business performance 7

1.2 Criterias to evaluation Business performance 8

1.2.1 Solvency ratio 9

1.2.2 Effective in using assets 10

1.2.3 Effective in using capital 13

1.2.4 Effective in using cost 14

1.3 Factors affecting business performance 15

1.3.1 Objective factors 15

1.3.2 Subjective factors 17

CHAPTER 2: SITUATION OF BUSINESS PERFORMANCE AT HOANG LONG MECHANICICS TECHNOLOGY JOINT STOCK COMPANY 19

2.1 Overview of Hoang Long Mechanics Technology Joint Stock Company Joint Stock Company 19

2.1.1 History of establishment and development of Hoang Long Mechanics Technology Joint Stock Company Joint Stock Company 19

2.1.2 Functions and duties of Hoang Long Mechanics Technology Joint Stock Company 21

2.1.3 Organizational structure of the company 22

2.2 Overview of business performance in the period of 2016-2018 23

2.2.1 Overview of business performance in the period 2016-2018 23

2.2.2 Analysis of revenue situation 26

2.2.3 Analysis of cost situation 31

2.2.3 Analysis of profit situation 40

2.3 Analysis of business performance at Hoang Long Mechanics Technology Joint Stock Company Joint Stock Company 51

2.3.1 Analyze the performance of using labor 51

2.3.2 Analyze the performance of account receivable management 53

2.3.4 Analyze the performance of using assets 58

2.3.5 Analyze the performance in using capital 60

2.4 Assess the situation of business performance of Hoang Long Mechanics Technology Joint Stock Company 63

2.4.1 Achievements 63

2.4.2 Limitations, weaknesses and causes 64

CHAPTER 3: SOLUTIONS TO IMPROVE THE BUSINESS PERFORMANCE OF HOANG LONG MECHANICS TECHNOLOGY JOINT STOCK COMPANY 67

3.1 Business direction and strategy of Hoang Long Mechanics Technology Joint Stock Company in 2019-2020 67

3.2 Solutions to improve the business operation of Hoang Long Mechanics Technology Joint Stock Company in 2019-2020 68

3.2.1 Solutions to increase revenue 68

3.2.2 Solutions to reduce cost 69

3.2.3 Solutions to exploitation the capital 69

3.2.4 Solutions to improve marketing performance 70

3.2.5 Solutions to improve the quality of human resources and retain talents 71

3.2.6 Solutions to improve data analysis methods of Accounting Department 72

CONCLUSION 73

REFERENCES 75

LIST OF FIGURES

Figure 1 Company management diagram 22

Figure 2: Business performance phase 2016 – 2018 25

Figure 3: Business performance phase 2016 – 2018 25

Figure 4: Total revenue 2016 28

Figure 5: Total revenue 2017 28

Figure 6: Total revenue 2018 29

Figure 7: Total revenue and cost from 2016 to 2018 32

Figure 8: Cost of goods sold 2016 - 2018 34

Figure 9: Cost of consulting, design 2016 - 2018 34

Figure 10: Cost of construction activities 2016 - 2018 36

Figure 11: Cost of processing activities 2016 - 2018 37

Figure 12: Cost of other business activities 2016 - 2018 38

Figure 13: Cost of sales 2016 - 2018 38

Figure 14: Enterprise Managing cost 2016 - 2018 39

Figure 15: Financial operation expenses 2016 - 2018 40

Figure 16: Profit situation 2016 - 2018 41

Figure 17: Profit before and after corporate income tax from 2016 - 2018 46

Figure 18: Summary of factors that increase and decrease profit before tax in 2017 compared to 2016 of the company 49

Figure 19: Summary of factors that increased the profit before tax in 2018 compared to 2017 of the company 51

Figure 20: Labor structure in the Company 52

LIST OF TABLES

Table 1: Business performance phase 2016 – 2018 24

Table 2: Revenue over 3 years from 2016 - 2018 27

Table 3: Cost situation in 3 years from 2016 - 2018 33

Table 4: Profit situation in 3 years from 2016 - 2018 42

Table 5: Analyze of factors affecting profit over 03 yearsm 2016 - 2018 47

Table 6: Analyze of debt situation over 03 years 2016 - 2018 54

Table 7: Analyze the performance of solvency over 03 years 2016 - 2018 56

Table 8: Profitability analysis over 03 years 2016 - 2018 58

Table 9: Analyze the business performance of the company over 03 years 2016 - 2018 61

OPENING

1 The urgency of the topic

Today, our country is in an open and competitive economy, which is also a good opportunity for Vietnamese enterprises to develop internationally, in order to survive and develop in an open environment Fierce competition requires businesses

to find a foothold in the trade One of the factors to determine that position is the business performance of the business

Analyzing business performance is very important and necessary for every business Through the analysis of business performance, it will help businesses assess their business situation, identify the causes and sources of problems arising, detect and exploit problems potential resources of the enterprise, at the same time take measures to overcome difficulties encountered by the enterprise From there, it

is possible to propose appropriate business strategies for the next period to help businesses improve business performance

Based on the actual situation of the enterprise, Hoang Long Mechanics Technology Joint Stock Company, the total revenue of the Company increased by more than 10%, it was not as planned but the cost of goods sold also increased with the same number Therefore, I desire to learn more about business performance and find the right direction for the Company, I chose the topic "Solutions to improve business performance at Hoang Long Mechanics Technology Joint Stock

Company” for my graduation thesis

2 Overview

Solutions to improve business performance are very important and there have been many studies in this field such as: Analysis of business performance of Vietnam Airlines Petroleum Company, Topical analyze business performance of trading and service companies, Solutions to improve business performance according to the accounting value of small and medium-sized enterprises in Thai Binh province, and many research works other However, small and medium-sized enterprises in Hanoi are still limited in research projects and in particular, there is

no specific research project on production and business performance of Hoang Long Mechanics Technology Joint Stock Company Therefore, I chose the topic

"Solutions to improve business performance at Hoang Long Mechanics Technology Joint Stock Company”

The thesis is based on the combined knowledge from subjects such as: Business development management, Financial and accounting management, Management economics, Human resource management and talent to complete the thesis The topic also focuses on analyzing business performance of Hoang Long Mechanics Technology Joint Stock Company through 03 years from 2016 to 2018 based on financial statements, internal reports of enterprises and observing operational situation Actual production activities of the author Through the analysis of business performance, it will help businesses check and evaluate business results, detect potential capabilities as well as recognize the strengths and limitations of the joint-stock mechanical engineering company Hoang Long Mechanics Technology Joint Stock Company That is an important basis for the Company to make business decisions, prevent risks and improve business performance

3 Research objectives

After the research, the author will achieve:

- The author have a system of theoretical, updated knowledge, and research methods for management

- Assess the status of Hoang Long Jsc Company On the basis of analyzing and evaluating the business results that Hoang Long Mechanical Engineering Joint Stock Company has achieved through the years 2016-2018, the author accurately investigates the business performance and the situation of the company capital using, asset using situation, solvency of the company, find out the limitations that exist in the company

- Proposing solutions and business orientation for the next period, helping to improve the remaining limitations and promoting the company's potentials, contributing to improving business performance

4 Research subjects

The object of the study is the performance of production and business activities of Hoang Long Mechanics Technology Joint Stock Companyany, specifically as follows:

- Business results through revenue, cost and profit targets

- Capital use performance and profitability of capital

- Overview of financial situation through financial coefficie

5 Scopes of research

- Space: financial statements of Hoang Long Mechanics Technology

Joint Stock Company

- Address: No 56, lane 177 Dinh Cong, Hoang Mai, Hanoi

- Time range: from 2016 to 2018

6 Research method

The method of data collection

Methods of collecting secondary documents for the period 2016-2018 include:

- Information on industries from prestigious State newspapers is a

useful source, manualy summarizing business results and reports of enterprises

- Textbooks on specific topics with clear guidance on existing

secondary data sources in the economic field

- Tertiary documents such as index tables and catalogs can also assist

in identifying secondary data It is possible to access and search the complete catalogs of this data on the Internet Indexes and catalogs that have recently appeared online have direct links to downloadable data files, usually in tabular

form

- Discussions, studies, erudite experts, librarians and instructors who are knowledgeable about the topic

Methods of primary data collection

The observation method is a method of controlling the recording of human events or behaviors.This method is often used in combination with other methods to

cross-check data accuracy Data collection In general, primary and secondary data

collection methods are common methods, which are used a lot in scientific research

Methods of data analysis

- Methods of detailed analysis:

Stemming from the content, object and task of analytical enterprises, moderate economic analysis uses the research methods of other science subjects such as statistics, accounting, finance, economic management, each method has advantages and disadvantages and specific conditions of application, being professional and technical, depending on the type of business and the nature of the enterprise economic phenomena, economic results, specific objects, sources of

data, data and for the purpose of analysis to select appropriate methods [3]

- Comparative method:

Comparison is a commonly used method for assessing results, identifying locations and trends of fluctuations of analytical criteria To apply the method of

comparison, it is necessary to ensure the conditions of comparison of the criteria:

+ Agree on the content, method of determination, time and unit of

comparison criteria

+ Depending on the purpose of analysis to determine the comparative origin Comparative origin can choose time base (planning period, previous period, same period of previous year) or spatial origin (compared with the whole, compared to other units with similar conditions, compared to the innermost parts) overall the period chosen as the comparison base is called the base period, and the period chosen for analysis is the analysis period The values of the norms calculated in each corresponding period are the values of the base period and the analysis period

In addition, in the analysis of economic activity, it is often necessary to compare sales with costs to determine business results or compare specific criteria with

general indicators to determine its proportion in general criteria

- Method of diagram form

Diagrams and graphs used in the analysis to reflect the fluctuations of economic indicators in different time periods or functionally interdependent relationships among Economic indicators When analyzing the situation or export

performance, we must make a table to write the data into the selected column lines, actually we are applying the diagram form method, but this method It cannot be used alone; it is also combined with other methods such as comparison method, numerical difference method, density and rate This is also a commonly used method similar to the comparative method

- Balancing method

In the system of economic - financial indicators of enterprises, there are many indicators related to each other by balanced relations Balance relationships in enterprises are of two types: general and specific The overall balance is a balanced relationship of general economic indicators

- Index method

The index method is applied to calculate and analyze the fluctuations and the interrelated effects of economic indicators with one or more other factors Indicator indicators are determined by the comparative relation of an economic indicator at different times, usually comparing the reporting period and the base period

7 Contents of the thesis

Beside the list of references, the attached annexes, the structure of the thesis consists of 3 chapters:

- Chapter 1: Theoretical and overview of the business performance of the

Enterprise

- Chapter 2: Situation of business performance at Hoang Long Mechanics

Technology Joint Stock Company

- Chapter 3: Solutions to improve business performance at Hoang Long Mechanics

Technology Joint Stock Company

CHAPTER 1: THEORETICAL AND OVERVIEW OF THE BUSINESS

PERFORMANCE OF THE ENTERPRISE

1.1 Definition and importance of business performance analysis

1.1.1 Concept of analyzing business performance

In the market economy, the issue that businesses are most concerned about

is production performance Effective production and business can businesses survive and grow Under the ultimate goal, business performance is synonymous with profits, it is the difference between the results obtained and the costs spent to achieve that result High or low business performance depends on the level of organization of production and management of each enterprise From the different points of view, we can give the following general concept:

Business performance is an economic category concept that reflects the focus of economic development in depth, reflecting the level of human resource exploitation and costs in the production process to achieve the goal business set out It is an increasingly important measure of economic growth and a basic basis for assessing the implementation of economic goals of the enterprise in each period

1.1.2 Classification of business performance

Classifying business performance by different criteria has practical effects in management It is the basis for determining business performance indicators and levels, and at the same time proposing measures to improve the business performance of the enterprise

Business performance and socio-economic performance

This classification is based on the profits that business activities bring to the company such as profits, performance of using capital, assets for the company Besides, the company also relies on the performance that the company brings to the society and economy such as promoting economic development, creating jobs for workers Particular business performance is the business performance gained from the business activities of each enterprise The common manifestation of particular business performance is the profit that each business achieves The socio-economic performance contributes through the results of serving production, life, economic

restructuring, promoting production development and improving people's lives There is a causal relationship and interaction between individual business performance and socio-economic performance National economic performance can only be achieved on the basis of effective operation of enterprises However, there may be businesses that do not guarantee performance (suffer losses) but the economy still gains performance However, the loss of a certain business is only acceptable at certain times due to objective reasons Enterprises must pay attention

to socio-economic performance because it is the premise and conditions for effective business enterprises However, in order to achieve that, the State needs to have a policy to ensure a harmonious combination of the interests of society with the interests of businesses and individual workers This classification helps businesses assess their performance as well as help the authorities can support businesses to operate more effectively

Performance of part cost and total cost

The operation of any business is also associated with its environment and market Any business must rely on the market to solve key issues: what to do, how

to do business, for whom and for what cost? Each supplier conducts his or her own business activities in specific conditions of resources, technical equipment, organization and labor management, business management They bring to the market their products and services at a specific cost and every business wants to consume their goods and services at the highest price However, when they sell their goods and services on the market, they can only sell at a market price, if their products are exactly the same in terms of quality

1.1.3 The require to improve business performance

Our economy is open for integration, thus creating opportunities and challenges for Vietnamese businesses To survive and develop, businesses must know how to take advantage of opportunities, overcome difficulties and challenges, gradually determine their position on trade And it is important for every business to constantly improve business performance for the following reasons:

Improving business performance is the way to ensure the survival and development of businesses as well as the whole society An enterprise wants to survive and grow, it must operate effectively but its business performance reflects

the level of using resources (human resources, material resources, capital) to achieve the defined goals of the enterprise The ultimate goal of most businesses is profit When the business is profitable, the business can guarantee the re-investment process to expand production and also ensure the existence and development of the business Every business is a cell of society, so when the business grows, it also contributes to the development of society Therefore, improving business performance is the basis to ensure the existence and development of businesses as well as the whole society [1]

Improve business performance to create competitive advantage and expand market In a market economy, businesses must compete to survive and grow, which requires each business to give themselves an advantage to compete That advantage can be product quality, price, structure or product design For example, businesses can improve production technology, raise the level of using machinery and equipment to create products of high quality and reasonable prices to attract customers Since then, businesses can be proactive in competition and create favorable conditions for market expansion, contributing to improving business performance [2]

Improve business performance to ensure life for employees in the enterprise For each employee, wages are a key part of their livelihood Therefore, striving to increase the income of employees in the business is always an important goal of every business Because businesses can use wages as a tool to improve business performance The higher and more stable income together with bonuses will create trust and enthusiasm for the whole enterprise, and the application of measures to handle labor violations by deducting Salary will contribute to improving the sense

of responsibility for everyone

1.2 Criterias to evaluation Business performance

Financial coefficients are considered to be the most typical signs of the financial situation of an enterprise in a given period Each different business at a different time will use different financial coefficients to clearly and concretely describe the financial situation of the enterprise Therefore, the analysis of financial coefficients is an important content in the process of corporate financial analysis

This coefficient reflects the ability to convert assets into money to cover short-term debts Therefore, this ratio also shows the level of guarantee to pay short-term debts of the business

Normally, when this coefficient is low (less than 1), it shows that the ability

of enterprises to pay short-term debts is weak and also a warning sign of potential financial difficulties that enterprises may encounter in debt payment This high coefficient indicates that the enterprise has a high ability to be ready to pay its due debts However, this ratio is not as high as possible, because this will reflect a large amount of current working assets and the fact that these assets are inactive, unprofitable and prove their effective use of assets business is not high

However, this factor is large or small, depending on the characteristics of the business For example, for commercial enterprises, mobile assets often account for

a large proportion of total assets, so this coefficient is relatively high Therefore, when assessing the ability to pay short-term debts, it is necessary to base on the typical coefficients of the same enterprises

- Quick solvency ratio:

This coefficient is considered as a measure reflecting the solvency of the enterprise's short-term debts This is a target that is very interested by short-term creditors because through this criterion, creditors can assess at the time of analysis, whether or not the enterprise is able to immediately pay short-term debts However,

in some cases, this indicator does not accurately reflect the solvency of the enterprise, especially businesses with receivables accounting for a large proportion

of total working assets

Therefore, to better assess the solvency of the enterprise, it is also possible

to use the instant solvency coefficient of the enterprise

- Coefficient of instant solvency

Formula:

Instant payment coefficient =

Money + Cash equivalent Short-term debt

In particular, cash includes: cash, deposits, money in transit Cash equivalents are short-term investments in securities, other short-term investments can easily be converted into cash within 3 months and without major risk

The ratio of instant solvency reflects the ability to pay short-term debts at any time, because in the source of debt cover the business is very flexible

- Loan interest payment ratio

The interest payable is the cost of capital that the enterprise is obliged to pay

on time to the creditor The source for paying interest is profit before interest and taxes The interest payment ratio reflects the relationship between profit before interest and tax and payable interest

Formula:

Interest payment ratio =

Profit before tax and interest Loan interests payable in the period

The interest payment ratio reflects the amount of profit before interest and tax that the business can offset the amount of loan payable in the period to what extent If this coefficient is high, it shows that the business is effective, the profitability of the capital is high enough to ensure payment of loan interests on time

1.2.2 Effective in using assets

 Performance of using common assets:

- Profitability ratio of assets:

This index reflects the enterprise's ability to generate after-tax profit for business activities, determined by the following formula:

Return on assets (ROA) =

Profit after tax Average assets

This indicator shows how much profit after tax an enterprise invested in 1 asset The higher this indicator proves the effective use of assets of the business, contributing to improving the investment ability of the business owner

- Number of asset turnover:

Number of asset rotation =

Total net sales Average assets

This indicator shows how many rounds of an asset are rotating in a business period This higher indicator proves that the assets are moving quickly, contributing

to increased sales and is a condition to improve profits for businesses If this indicator is low, meaning that the assets are moving slowly, there may be inventories and unfinished products, causing business turnover to decline However, this index depends on the characteristics of business lines and specific characteristics of each enterprise

- Asset depreciation rate compared to net sales

The ability of an asset to generate net turnover is a basic economic indicator for estimating investment capital when an enterprise wants an expected net turnover, which is usually determined:

Asset ratio of assets to net sales =

Average assets Net sales

This indicator indicates how many VND of investment assets an enterprise will earn in a net revenue High net sales for the period

- The depreciation rate of the property compared to the after-tax profit:

Reflecting the enterprise's ability to generate after-tax profit for its business activities, it is determined:

The ratio of depreciation of

assets to profit after tax =

Average assets Profit after tax

This indicator shows how much property assets a company will gain after 1 dong of profit after tax The lower this index, the higher the performance of using assets, the more attractive investment

- Inventory turnover count:

The number of rotation of inventory =

Cost of goods sold Average inventory

Formula:

Time 1 rotation of inventory =

360 Inventory turnover count

In order to know how much capital a business wants to have a net revenue,

it is necessary to base on the inventory inventory coefficient determined by the following formula:

Coefficient of inventories =

Average inventory Total net sales

- Production capacity of fixed assets:

Production capacity of fixed assets =

Revenue Average fixed asset

This indicator shows how much revenue per 1 dong of fixed assets invested This indicator shows the production capacity of fixed assets, the higher the target,

the better the performance of fixed assets, which is a factor contributing to improving the performance of business activities

Formula:

Average value of fixed

assets in the period =

Value of fixed assets at the beginning of the period + Value of fixed assets at the end of the period

2

- Loss rate of fixed assets:

Loss ratio of fixed assets =

Average value of fixed assets

Net sales

This indicator indicates how much VND is worth of fixed assets for an enterprise to want a net revenue, which is the basis for appropriate fixed asset investment in order to achieve the desired revenue

1.2.3 Effective in using capital

- Return on equity (ROE): The formula for determining:

Return on equity (ROE) =

Profit after tax Equity

This indicator shows how much profit after 1 dong of equity is generated The higher this indicator, the more positive the trend is, helping administrators to raise new capital in the financial market to finance the growth of the business

- Efficient use of loan interest:

Efficient use of loan interest =

Profit before tax + Interest expense

Interest expenses

This indicator reflects the safety, solvency of enterprises The higher this indicator proves the profitability of the loan as possible

- Loan interest rate:

Profitability ratio of the loan =

Profit after tax x 100 Average loan amount

This indicator shows how much profit the enterprise uses after 100 VND of loan money for its business operation The higher this indicator proves good business performance, this is an attractive factor for managers to make decisions to borrow money to invest in production and business activities This indicator also proves the growth of enterprises

1.2.4 Effective in using cost

- Profitability ratio of cost of goods sold:

Return on cost of goods sold =

Gross profit on sale Cost of goods sold

The profitability ratio of the cost of goods sold indicates how much gross profit the company invested in 1 cost of goods sold, the higher this indicator indicates the higher the cost of goods sold As a result, the company has increased its sales volume This indicator usually depends on the business characteristics of each specific industry

- Profitability ratio of selling expenses:

Profitability ratio of selling expenses =

Net profit from business activities

Selling expenses

This indicator shows how much profit the enterprise spends on 1 dong of selling expenses The higher this indicator proves that the greater the profit in selling expenses, the business saves on selling costs

- Profitability ratio of enterprise management expenses:

Profitability ratio of enterprise

1.3 Factors affecting business performance

Normally, when mentioning factors affecting the business operations of an enterprise, it is classified factors affecting subjective and objective factors More specifically, subjective factors are those within the enterprise itself, and the enterprise can control or adjust it In contrast, objective factors are factors that cannot be regulated and controlled by the enterprise

1.3.1 Objective factors

Objective factors include political, legal, cultural, social, technological, technical, economic, natural conditions, infrastructure and economic relations factors, these are the factors Factors that businesses can not control and have a common impact on all businesses in the market The study of these factors is not aimed at controlling the enterprise's business, but it creates the best adaptability to the movement trend of the business

- Political and legal factors:

Factors in the political and legal environment have a strong impact on the formation and exploitation of business opportunities and the fulfillment of business objectives Political stability is an important premise for business activities, political changes can affect one group of enterprises in a beneficial way or inhibit the development of another enterprise The complete legal system and the rigor in law enforcement will create a healthy competitive environment for businesses, avoiding fraud, smuggling and mistakes in business In addition, the political and legal stability of a country allows businesses to predict the level of risk, the business environment and the impact of politics and law on businesses how Therefore, researching political and legal factors is an indispensable requirement when businesses enter the market

- Economical factors:

Economic factors can create favorable conditions for penetrating and expanding markets and industries, but limiting the development of other industries Economic factors affecting purchasing power, changes in consumer demand or development trends of industries include:

o Foreign trade activities: the open and close trend of the economy influences business development opportunities, competitive conditions, and the ability

to use national advantages in technology and capital

o Inflation and its ability to control inflation: affect income, accumulation, consumption, stimulate or restrict investment

o Changes in economic structure: affecting the position, role and development trend of economic sectors leads to a change in the development direction of enterprises

o Economic growth rate: showing the general development trend of the economy related to the ability to expand or narrow the size of business of each enterprise

- Social and cultural factors:

The socio-cultural factors that have a great influence on customers as well

as business activities of enterprises, are the factors that form the psychology and tastes of consumers This factor allows businesses to understand at different levels

of the target audience so that they can choose the appropriate business methods

- Technological and technological factors:

Technological factors affect technology innovation requirements in equipment capable of producing products of different quality, labor productivity and competitiveness, selection and technology provision

- Natural conditions and infrastructure:

Factors of natural conditions such as climate and weather affect the production and business cycle in the region, or affect the goods storage and preservation activities For technical infrastructure, the conditions for production and business on the one hand create a basis for favorable business when exploiting the existing infrastructure of the economy, on the other hand, it can also cause limiting the ability to invest and develop special businesses with commercial enterprises in the process of transportation, storage and distribution

- Competitors:

Competitors include manufacturers, businesses that sell the same products

of the business or trade interchangeable products Competitors have a great influence on businesses and businesses that are able to compete to be able to survive otherwise will be pushed out of the market Competition helps businesses to improve their operations to better serve customers, improve their dynamism, but they are always in a state of being pushed back

- Supplier:

They are domestic and foreign production and business enterprises that supply goods to businesses and suppliers, which affect the business activities of enterprises not small, which is reflected in the performance of supply contracts and reliability, quality of goods, price, time, location as required

1.3.2 Subjective factors

Factors of the potential of the business include: financial strength, human potential, intangible assets, management and management level, technological equipment, infrastructure, and soundness of business goals and control over the course of their goals

- Intangible potential:

As the factors that create the power of businesses in the market, the intangible potential manifests itself in the ability to influence the choice, acceptance and decision making of customers In the trade relationship, the intangible potential factor has created favorable conditions for the purchase, creating sources as well as

competitiveness to attract customers and expand business markets The intangible potential of an enterprise can be its reputation in the market, its reputation, or its ability to communicate and reputation in social relationships

- Geographical location, facilities of the enterprise:

Allows businesses to attract the attention of customers, convenient for providing purchasing or performing reserve activities The enterprise's material and technical facilities represent the fixed assets that it mobilizes into its business, including factory offices, specialized equipment That shows the strength of the business, business scale as well as advantages in business

CHAPTER 2: SITUATION OF BUSINESS PERFORMANCE AT HOANG LONG MECHANICICS TECHNOLOGY JOINT

Hoang Long Mechanics Technology Joint Stock Company was established

in 1998, with the main business of manufacturing high-tech steel structures to serve key national key construction and industry industries such as: yard aircraft, refineries, bridges and roads, electricity - telecommunications, industrial parks, supermarkets, high-rise towers with steel structures, from simple to complex; with standard and non-standard product lines, super weight weight In addition, to meet the diverse needs of the market, the company also launched products manufactured steel rebar, rolled steel, drawn, cut, to meet all requirements of customers Products

of Hoang Long Mechanics Technology Joint Stock Company have been making a

mark on the domestic market

The company has implemented works and projects such as:

- Supplying high-tech steel structure products for factories

- Supplying high-tech steel structure products to the airport

- Producing rebar products for wholesale and retail

- Consulting design of factory buildings:

- Processing Engineering details:

The company came into operation with an initial capital of VND 5 billion and 32 employees There is a Party cell including 04 members, a grassroots trade union and a youth union The head office is located at 56/177 Dinh Cong, Hoang Mai, Hanoi, with an area of 118 m2 The facilities include 06 drawing tables, scientific and technical staff including 02 architects, 02 construction engineers, 02 economic engineers and 04 intermediate officials, the rest are technical workers and workers waiters

During the operation, the company has constantly expanded its scale and business production lines, technological innovation, in 2014 the company added additional industries such as real estate business; construction of civil, industrial, transport works, infrastructure of residential areas, commercial areas, tourist areas; consulting, bidding for designing and installing construction works As a result of the company's continuous efforts and efforts during its operation, these achievements are recognized, prestige and quality of products are constantly improved

2.1.2 Functions and duties of Hoang Long Mechanics Technology Joint Stock Company

The company operates mainly in the field of consulting and construction, with the following industries:

- Producing iron, steel and cast iron

- Producing industrial, agricultural and forestry machines

- Manufacture of machine tools and metal shaping machines

- Repair of machinery and equipment

- Installation of machinery and industrial equipment

- Construction of houses of all kinds

- Installation of electrical systems

- Installation of the system water supply and drainage

2.1.3 Organizational structure of the company

The company's current number of employees is 55, of which 21 and bachelor degrees are 38% of the total number of employees and 34 are unskilled workers, accounting for 62%

Regarding organizational structure in the company, specifically as follows:

Figure 1 Company management diagram

- Manager: The manager is also the person with the highest authority to direct and assign the duties of the heads of the departments and be responsible for all activities of his unit before the law The vice manager assists the manager in managing and operating of the company The deputy director can act on the director's behalf when there is a power of attorney

- Sales Department: in charge of marketing activities such as advertising, marketing products and goods of the company closer to customers, customer care,

Design supervisor

Designers

Manufacturing department

Manufacturing supervisor

Workers Manager

Vice manager

researching and planning the development strategy of the company in accordance with social development trends In addition, the sales department has an important responsibility in increasing product sales salaries, reaching out to retail customers

as well as business customers

- Accounting Department: organize the accounting work of the unit in accordance with the current accounting regulations and regulations of the Ministry

of Finance, monitor and record the situation of production and business activities of the unit, From there, propose to the Board of Directors the direction of overcoming difficulties and shortcomings, promoting and exploiting the potential capabilities to make the right decisions The accounting department also has the task of monitoring and reporting revenue situation - the cost to use to help maximize profits for the company

- Design Department: responsible for designing products including: designing workshops, houses or constructions for consulting; designing machines and equipment; component design and many other products

- Manufacturing department: is the production department directly managing and operating the production, operation and management of the factory's machinery and equipment, safety equipment system, fully arranged personnel force, carry out production standards

2.2 Overview of business performance in the period of 2016-2018

2.2.1 Overview of business performance in the period 2016-2018

Over the years, the company has invested in renovating modern equipment, investing in the application of science and technology in production and business, contributing to improving the business performance of the company To better understand the business situation of the company, we observe the following table:

Table 1: Business performance phase 2016 – 2018

( Unit: VND )

Targets 2016 2017 2018

2016 / 2017 2017 / 2018

Amount % Amount %

Revenue from goods

sold and service 67.585.275.300 77.049.993.860 86.474.447.413 9.464.718.560 12,28 9.424.453.553 10,90

Revenue before

corporate income tax 6.213.366.998 7.254.505.456 8.329.522.214 1.041.138.458 14,35 1.075.016.758 12,91

Corporate income tax 1.242.673.400 1.450.901.091 1.665.904.443 208.227.692 14,35 215.003.352 12,91

Revenue after

corporate income tax 4.970.693.598 5.803.604.365 6.663.617.771 832.910.766 14,35 860.013.406 12,91

( Source: Financial reports of Hoang Long Mechanics Technology Joint Stock Company from 2016 to 2018)

Figure 2: Business performance phase 2016 – 2018

Figure 3: Business performance phase 2016 – 2018

Through the data table we see:

Net Revenue of goods and services increased over the years Revenue in 2017 increased compared to 2016 was 9.464.718.560 VND, equivalent to 12,28% In 2018, the revenue still maintained an increase, reaching VND 86.474.447.413, an increase of 9.424.453.553 VND, equivalent to 10,90% compared to 2017 This shows that the business performance of the company is progressing with good development Achieving such results

is thanks to the constant efforts of all employees in the company, especially the wise

Revenue from goods sold and service

Business performance from 2016 – 2018

2016 2017 2018

2016 2017 2018

0 2,000,000,000

Corporate income tax

Revenue after corporate income tax

Business performance from 2016 – 2018

2016 2017 2018

leadership of the company leaders that have led the company to overcome the difficulties of the economy market economy At the same time, the company also owns a young, knowledgeable, dynamic and creative labor force

In addition, the company is always proactive in understanding, capturing and promptly responding to customer needs, constantly improving the quality and design of its products to enhance its competitive position and attract more customers

Another sign that the company's business performance is growing rapidly is the profit before tax increased over the years Profit before tax in 2017 was 7.254.505.456 VND, an increase of 1.041.138.458 thousand VND compared to 2016, corresponding to an increase of 14,35% By 2018, profit before tax increased to VND 6.663.617.771, an increase of VND 860.013.406 compared to 2017, equivalent to 12,91%

Along with the development of the company is the increase of the company's contribution to the state budget revenue, the company's corporate income tax has increased continuously over 3 years In 2017, corporate income tax was VND 1.450.901.091, an increase of 14,35% compared to 2016 Enterprise income tax in 2018 was VND 1.665.904.443, an increase of 12,91% compared to 2017

Profit after tax of the company also increased rapidly over the years In 2017, it was VND 5.803.604.365, an increase of VND 832.910.766 compared to 2016 (up 14,35%), in

2018 profit after tax increased by VND 6.663.617.771 compared to 2017 (up 12,91%)

Through the overview of the company's business performance results in 2016, 2017 and 2018, we realize that the company is constantly trying to strive in production and business, focusing strongly on the market to improve profits The manifestation of an increasingly favorable business is the rapid increase in revenue and profit of the company However, in the process of operating the company also encountered difficulties and obstacles that slowed down the growth of the company Therefore, the company must take full advantage of and maximize its strengths, gradually overcome difficulties to improve its competitive position and business performance

2.2.2 Analysis of revenue situation

Revenue is the output of the business process Look at the data table below we see that:

Table 2: Revenue over 3 years from 2016 - 2018

Unit: VND

Targets 2016 2017 2018

Comparation

1.Revenue from goods

sold and service

Total revenue in 2017 reached VND 77.049.993.860 and increased to 9.464.718.560 VND in 2017, an increase of 12,28% compared to 2016 By 2018, the total revenue continued to grow, an increase of 9.424.453.553 VND (up about 10,90%) compared to 2017 Total revenue in 2018 reached 86.474.447.413 VND

The total revenue of the company consists of 3 main parts:

 Revenue of goods and services include:

- Consulting and design revenue

- Construction revenue

- Processing revenue

 Revenue from financial activities

 Other revenue

Figure 4: Total revenue 2016

Figure 5: Total revenue 2017

Figure 6: Total revenue 2018

 Revenue of goods and services:

- Revenue of goods and services are the main source of revenue for the company In

2016, this revenue reached VND 66.902.999.063 and increased to VND 76.349.974.575 in

2017, an increase of 12,37% compared to 2016 If we compare 2016 with 2018, we see a significant increase Regarding revenue, the increase after 02 years is 19.130.304.535 VND, equivalent to 23,26% In the current competitive market situation, to achieve these numbers after 02 years is not a simple task It is a whole process of striving and striving for continuous efforts of all employees and company leadership If we look in more detail, we will see that the main revenue of the company is the revenue from design, construction and processing consultancy activities These are the three main sources of revenue and greatly influence the company's total revenue

- Consultancy and design revenue in 2017 reached VND 5.908.672.972, an increase

of 0,24% compared to 2016 The cause of this low increase is due to the demand for real estate and consultancy design Small and medium-sized auxiliary services in recent years are showing signs of slowing down Therefore, by 2018 design consultancy revenue only inched up to VND 6.063.813.761, equivalent to an increase of only 2,56% compared to

2017 In addition, due to the construction works of the company As a part of the state budget, the amount of work to be completed is often not finalized but only partially settled according to the province's capital construction fund allocated in each year Therefore, although the volume of design consultancy work was completed in 2017 and 2018, the revenue of design consultants in 2017 and 2018 increased insignificantly Therefore, the Company needs to focus on the quality of consultancy and design activities to increase its competitiveness and attract more customers, contributing to increase future revenue and expand its operation to other provinces

- The company's construction revenue is growing in an upward trend In 2017, the construction revenue reached VND 67.582.523.644, an increase of VND 8.977.372.790 compared to 2016, equivalent to 13,34% The main cause of this increase is in recent years, the development of apartment complexes and complexes of auxiliary works for large and super large urban areas is on the rise, with the participation of of famous contractors such

as Vingroup, Sungroup, Aeon It is these large and super large projects that bring many opportunities for small contractors and subcontractors to participate These subcontractors are not eligible to participate in the whole project due to lack of capital and labor but if given the opportunity in the small categories, they will do a great job of their own Hoang Long Mechanics Technology Joint Stock Company is one such company During 03 years

of the research, Hoang Long Mechanics Joint Stock Company has participated in projects such as Noi Bai-Lao Cai Expressway stops, Hanoi - Hai Phong , residential complexes Timecity, Vinhome Long Bien, CocoBay Da Nang With these successful projects in

2018, the total revenue from the construction of the Company reached VND 76.078.536.453, an increase compared to 2017 of VND 8.796.012.809, equivalent to 11,56

% However, this increase is not yet a reflection of the strong growth of construction revenue due to a few works are in the pre-acceptance stage before revenue recognition

- Processing is a highly profitable business but this is a revenue type with unstable nature, requiring a lot of labor, facilities and a short time to complete, so the Company has not been completed yet attaching importance to expansion and development Processing turnover is mainly in the fields of painting, plating, welding, aesthetic finishing Materials are supplied by outsourcing partners and require very strict output However, revenue from outsourcing still increased slightly over 03 years In 2017, processing revenue reached VND 3.158.777.959, an increase of 455.626.482 VND compared to 2016, equivalent to 14,42% compared to 2016 The uptrend still maintained in 2018 with processing revenue reaching 3.890.953.429 VND, an increase of 732.175.470 VND, equivalent to 18,82% This is a profitable business, but it is not easy to finish the product on time, in quantity and quality With only about 30 employees distributed mainly for the construction field, whenever the company receives a processing contract, the company leadership must consider a lot in allocating resources for each business area The recruitment of additional manpower is also a big problem when the processing contracts are not much and the value

is small, the situation of oversupply will occur when the processing orders are completed Difficulties in expanding outsourcing revenue are due to the requirement that the workshop must be large enough and have many machinery and equipment, especially in the field of plating paint If renting a factory with a large area, businesses must move to the suburbs,

which greatly affects transportation costs The Board of Directors is finding a solution in

2019 to increase revenue instead of 3-5% of total sales of goods and services at this time

The analysis shows that the revenue from Revenue of goods and services of the company achieved a relatively high growth rate and contributed significantly to this growth is the revenue from construction activities Besides, there are still a number of revenue reduction activities affecting the overall growth rate of the whole company such

as consulting, designing and processing activities This is a matter the company needs to consider and take corrective measures to further improve sales as well as business performance of the company

 Revenue from financial activities:

Besides Revenue of goods and services, financial income is also a part of the company's total revenue Financial revenue accounted for a very modest proportion of total revenue, but through its relatively high growth, financial income also contributed to the growth of total revenue Financial income of the company includes: Interest on bank deposits In

2019, the management needs to be more flexible with the market demand, for example, the loan demand of other construction teams is very large To do this, the Company needs to first build a strong and abundant system, in order to create a premise for lending

 Other revenue:

In addition to the three main sources of revenue, which are design consultancy revenue, construction revenue and processing revenue, the company also has revenue from land use rights, sales of construction materials and revenue from imports machines, equipment, These are the irregular income generated by the company Particularly sales revenue of construction materials, not 2018 Other revenue levels in 2016 were VND 675.787.869, 2017 was VND 693.390.284 and 2018 was VND 432.328.159 Although these incomes arise irregularly and account for a small proportion of the total revenue, they also contribute to increasing the company's revenue, so the company should also pay attention and take measures to increase the income Other, contributing to diversifying the business lines of the company

2.2.3 Analysis of cost situation

In order to evaluate the business results of the company, we must analyze the situation of cost fluctuations over the years and evaluate such changes compared to the fluctuations of revenue (see table 03)

The total cost of the company in 2017 was VND 69.802.117.405, an increase of VND 8.423.720.735 (about 12,07%) compared to 2016 By 2018, the total cost of the company increased quite high, an increase of VND 8.351.623.450 compared to 2017, corresponding to an increase of 10,69%, this is understandable because the company's total revenue also increased, leading to increased costs

Figure 7: Total revenue and cost from 2016 to 2018