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 CAO

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

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

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

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

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

Date………

Author

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

Research results are my best effort in learning and research However, Iwould 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

2.1.3 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

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1 The urgency of the topic

Today, our country is in an open and competitive economy, which is also agood opportunity for Vietnamese enterprises to develop internationally, in order tosurvive 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 thebusiness performance of the business

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

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

Based on the actual situation of the enterprise, Hoang Long MechanicsTechnology Joint Stock Company, the total revenue of the Company increased bymore than 10%, it was not as planned but the cost of goods sold also increased withthe same number Therefore, I desire to learn more about business performance andfind the right direction for the Company, I chose the topic "Solutions to improvebusiness performance at Hoang Long Mechanics Technology Joint StockCompany” for my graduation thesis

2 Overview

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

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

"Solutions to improve business performance at Hoang Long Mechanics TechnologyJoint 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 thethesis The topic also focuses on analyzing business performance of Hoang LongMechanics Technology Joint Stock Company through 03 years from 2016 to 2018based on financial statements, internal reports of enterprises and observingoperational situation Actual production activities of the author Through theanalysis of business performance, it will help businesses check and evaluatebusiness results, detect potential capabilities as well as recognize the strengths andlimitations of the joint-stock mechanical engineering company Hoang LongMechanics Technology Joint Stock Company That is an important basis for theCompany to make business decisions, prevent risks and improve businessperformance

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 andevaluating the business results that Hoang Long Mechanical Engineering Joint StockCompany has achieved through the years 2016-2018, the author accurately investigates thebusiness 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 toimprove the remaining limitations and promoting the company's potentials, contributing toimproving business performance

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4 Research subjects

The object of the study is the performance of production and businessactivities 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

6 Research method

The method of data collection

Methods of collecting secondary documents for the period 2016-2018

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 datacollection 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 subjectssuch as statistics, accounting, finance, economic management, each method hasadvantages and disadvantages and specific conditions of application, beingprofessional and technical, depending on the type of business and the nature of theenterprise economic phenomena, economic results, specific objects, sources ofdata, data and for the purpose of analysis to select appropriate methods [3]

Comparison is a commonly used method for assessing results, identifyinglocations and trends of fluctuations of analytical criteria To apply the method ofcomparison, 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 ofprevious year) or spatial origin (compared with the whole, compared to other units withsimilar conditions, compared to the innermost parts) overall the period chosen as thecomparison base is called the base period, and the period chosen for analysis is the analysisperiod The values of the norms calculated in each corresponding period are the values of thebase period and the analysis period In addition, in the analysis of economic activity, it isoften necessary to compare sales with costs to determine business results or compare specificcriteria 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 ofeconomic indicators in different time periods or functionally interdependent

relationships among Economic indicators When analyzing the situation or export

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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 beused alone; it is also combined with other methods such as comparison method,numerical difference method, density and rate This is also a commonly usedmethod similar to the comparative method.

- Balancing method

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

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 economicindicator at different times, usually comparing the reporting period and the baseperiod

7 Contents of the thesis

Beside the list of references, the attached annexes, the structure of the thesisconsists 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 businessessurvive and grow Under the ultimate goal, business performance is synonymouswith profits, it is the difference between the results obtained and the costs spent toachieve that result High or low business performance depends on the level oforganization of production and management of each enterprise From the differentpoints of view, we can give the following general concept:

Business performance is an economic category concept that reflects thefocus of economic development in depth, reflecting the level of human resourceexploitation and costs in the production process to achieve the goal business setout It is an increasingly important measure of economic growth and a basic basisfor 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 inmanagement It is the basis for determining business performance indicators andlevels, and at the same time proposing measures to improve the businessperformance of the enterprise

Business performance and socio-economic performance.

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

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

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

Performance of part cost and total cost

The operation of any business is also associated with its environment andmarket 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 ownbusiness activities in specific conditions of resources, technical equipment,organization and labor management, business management They bring to themarket their products and services at a specific cost and every business wants toconsume their goods and services at the highest price However, when they selltheir goods and services on the market, they can only sell at a market price, if theirproducts 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 andchallenges for Vietnamese businesses To survive and develop, businesses mustknow how to take advantage of opportunities, overcome difficulties and challenges,gradually determine their position on trade And it is important for every business toconstantly improve business performance for the following reasons:

Improving business performance is the way to ensure the survival anddevelopment of businesses as well as the whole society An enterprise wants to

the level of using resources (human resources, material resources, capital) toachieve the defined goals of the enterprise The ultimate goal of most businesses isprofit When the business is profitable, the business can guarantee the re-investmentprocess to expand production and also ensure the existence and development of thebusiness Every business is a cell of society, so when the business grows, it alsocontributes to the development of society Therefore, improving businessperformance is the basis to ensure the existence and development of businesses aswell as the whole society [1]

Improve business performance to create competitive advantage and expandmarket In a market economy, businesses must compete to survive and grow, whichrequires each business to give themselves an advantage to compete That advantagecan be product quality, price, structure or product design For example, businessescan improve production technology, raise the level of using machinery andequipment to create products of high quality and reasonable prices to attractcustomers Since then, businesses can be proactive in competition and createfavorable conditions for market expansion, contributing to improving businessperformance [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 toincrease the income of employees in the business is always an important goal ofevery business Because businesses can use wages as a tool to improve businessperformance The higher and more stable income together with bonuses will createtrust and enthusiasm for the whole enterprise, and the application of measures tohandle 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 thefinancial situation of an enterprise in a given period Each different business at adifferent time will use different financial coefficients to clearly and concretelydescribe the financial situation of the enterprise Therefore, the analysis of financialcoefficients is an important content in the process of corporate financial analysis

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1.2.1 Solvency ratio

- Current solvency coefficient (current solvency ratio)

Formula:

Short-term assets Current payment ratio =

Short-term debt

This coefficient reflects the ability to convert assets into money to covershort-term debts Therefore, this ratio also shows the level of guarantee to payshort-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 potentialfinancial difficulties that enterprises may encounter in debt payment This highcoefficient indicates that the enterprise has a high ability to be ready to pay its duedebts However, this ratio is not as high as possible, because this will reflect a largeamount 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 thebusiness 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 thetypical coefficients of the same enterprises

This coefficient is considered as a measure reflecting the solvency of theenterprise's short-term debts This is a target that is very interested by short-termcreditors because through this criterion, creditors can assess at the time of analysis,

in some cases, this indicator does not accurately reflect the solvency of theenterprise, 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

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

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 andtaxes The interest payment ratio reflects the relationship between profit beforeinterest and tax and payable interest

Formula:

Profit before tax and interest Interest payment ratio =

Loan interests payable in the period

The interest payment ratio reflects the amount of profit before interest andtax that the business can offset the amount of loan payable in the period to whatextent If this coefficient is high, it shows that the business is effective, theprofitability of the capital is high enough to ensure payment of loan interests ontime

1.2.2 Effective in using assets

- Profitability ratio of assets:

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

Profit after tax Return on assets (ROA) =

Average assets

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

Total net sales Number of asset rotation =

- Asset depreciation rate compared to net sales

The ability of an asset to generate net turnover is a basic economic indicatorfor estimating investment capital when an enterprise wants an expected net

turnover, which is usually determined:

Average assets Asset ratio of assets to net sales =

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 Average assets

= assets to profit after tax

Profit after tax

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

Cost of goods sold The number of rotation of inventory =

The number of turnover cycles of inventory shows how many times the

investment capital for inventory has been rotated in the period, the higher this

indicator, showing that the inventory is moving well It is a factor that contributes toincrease sales and profits for businesses

Formula:

360 Time 1 rotation of inventory =

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 thefollowing formula:

Average inventory Coefficient of inventories =

Total net sales

- Production capacity of fixed assets:

Revenue Production capacity of fixed assets =

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:

Value of fixed assets at the beginning of the period Average value of fixed

= + Value of fixed assets at the end of the period assets in the period

2

- Loss rate of fixed assets:

Average value of fixed assets Loss ratio of fixed assets =

Net sales

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

1.2.3 Effective in using capital

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

Profit after tax Return on equity (ROE) =

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 toraise new capital in the financial market to finance the growth of the business

Profit before tax + Interest expense Efficient use of loan interest =

Interest expenses

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

Profit after tax x 100 Profitability ratio of the loan =

Average loan amount

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

1.2.4 Effective in using cost

- Profitability ratio of cost of goods sold:

Gross profit on sale Return on cost of goods sold =

Cost of goods sold

The profitability ratio of the cost of goods sold indicates how much grossprofit the company invested in 1 cost of goods sold, the higher this indicatorindicates the higher the cost of goods sold As a result, the company has increasedits sales volume This indicator usually depends on the business characteristics ofeach specific industry

- Profitability ratio of selling expenses:

Net profit from business activities Profitability ratio of selling expenses =

Selling expenses

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

- Profitability ratio of enterprise management expenses:

Profitability ratio of enterprise Net profit from business activities

= management expenses

Enterprise Cost Management

This indicator shows how much profit an enterprise spends on 1 dong ofadministrative expenses, the higher this indicator shows the greater the profitability

of its management expenses Save on management costs

1.3 Factors affecting business performance

Normally, when mentioning factors affecting the business operations of anenterprise, it is classified factors affecting subjective and objective factors Morespecifically, subjective factors are those within the enterprise itself, and theenterprise can control or adjust it In contrast, objective factors are factors thatcannot 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 relationsfactors, these are the factors Factors that businesses can not control and have acommon impact on all businesses in the market The study of these factors is notaimed at controlling the enterprise's business, but it creates the best adaptability tothe 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 businessobjectives Political stability is an important premise for business activities, politicalchanges can affect one group of enterprises in a beneficial way or inhibit thedevelopment of another enterprise The complete legal system and the rigor in lawenforcement will create a healthy competitive environment for businesses, avoidingfraud, smuggling and mistakes in business In addition, the political and legalstability of a country allows businesses to predict the level of risk, the businessenvironment and the impact of politics and law on businesses how Therefore,researching political and legal factors is an indispensable requirement whenbusinesses 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 ordevelopment trends of industries include:

o Foreign trade activities: the open and close trend of the economy influencesbusiness development opportunities, competitive conditions, and the ability to use nationaladvantages in technology and capital

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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 economyrelated 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 andtastes 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 inequipment capable of producing products of different quality, labor productivityand 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 andpreservation activities For technical infrastructure, the conditions for productionand business on the one hand create a basis for favorable business when exploitingthe existing infrastructure of the economy, on the other hand, it can also causelimiting the ability to invest and develop special businesses with commercialenterprises in the process of transportation, storage and distribution

- Supplier:

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

1.3.2 Subjective factors

Factors of the potential of the business include: financial strength, humanpotential, intangible assets, management and management level, technologicalequipment, infrastructure, and soundness of business goals and control over thecourse of their goals

- Intangible potential:

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

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

- Geographical location, facilities of the enterprise:

Allows businesses to attract the attention of customers, convenient forproviding purchasing or performing reserve activities The enterprise's material andtechnical facilities represent the fixed assets that it mobilizes into its business,including factory offices, specialized equipment That shows the strength of thebusiness, 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 servekey 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; withstandard and non-standard product lines, super weight weight In addition, to meetthe diverse needs of the market, the company also launched products manufacturedsteel rebar, rolled steel, drawn, cut, to meet all requirements of customers Products

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

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- 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 billionand 32 employees There is a Party cell including 04 members, a grassroots tradeunion and a youth union The head office is located at 56/177 Dinh Cong, HoangMai, Hanoi, with an area of 118 m2 The facilities include 06 drawing tables,scientific and technical staff including 02 architects, 02 construction engineers, 02economic engineers and 04 intermediate officials, the rest are technical workers andworkers waiters

During the operation, the company has constantly expanded its scale andbusiness production lines, technological innovation, in 2014 the company addedadditional 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 ofthe company's continuous efforts and efforts during its operation, theseachievements are recognized, prestige and quality of products are constantlyimproved

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

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- 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:

Board of director

Manager

Vice manager

Accounting

Figure 1 Company management diagram

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

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

researching and planning the development strategy of the company in accordancewith social development trends In addition, the sales department has an importantresponsibility in increasing product sales salaries, reaching out to retail customers aswell as business customers.

- Accounting Department: organize the accounting work of the unit in accordancewith the current accounting regulations and regulations of the Ministry of Finance, monitorand 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 Theaccounting department also has the task of monitoring and reporting revenue situation - thecost to use to help maximize profits for the company

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

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

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 betterunderstand the business situation of the company, we observe the following table:

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Table 1: Business performance phase 2016 – 2018

corporate income tax

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

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Business performance from 2016 – 2018

Figure 2: Business performance phase 2016 – 2018

Business performance from 2016 – 2018

10,000,000,000 8,000,000,000 6,000,000,000

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

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leadership of the company leaders that have led the company to overcome the difficulties ofthe 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 andpromptly responding to customer needs, constantly improving the quality and design of itsproducts to enhance its competitive position and attract more customers

Another sign that the company's business performance is growing rapidly is theprofit before tax increased over the years Profit before tax in 2017 was 7.254.505.456VND, an increase of 1.041.138.458 thousand VND compared to 2016, corresponding to anincrease of 14,35% By 2018, profit before tax increased to VND 6.663.617.771, anincrease 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'scontribution to the state budget revenue, the company's corporate income tax has increasedcontinuously over 3 years In 2017, corporate income tax was VND 1.450.901.091, anincrease of 14,35% compared to 2016 Enterprise income tax in 2018 was VND1.665.904.443, an increase of 12,91% compared to 2017

Profit after tax of the company also increased rapidly over the years In 2017, it wasVND 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, 2017and 2018, we realize that the company is constantly trying to strive in production andbusiness, focusing strongly on the market to improve profits The manifestation of anincreasingly favorable business is the rapid increase in revenue and profit of the company.However, in the process of operating the company also encountered difficulties andobstacles that slowed down the growth of the company Therefore, the company must takefull advantage of and maximize its strengths, gradually overcome difficulties to improve itscompetitive 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 seethat: