Financial statements analysis group 1 HSG

2 LIST OF TABLES Table 3.1 Changes in assets in the period of the first quarter of 2020 - Table 3.2 Vertical asset fluctuations from the first quarter of 2020 to Table 3.3 Movement of

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HO CHI MINH UNIVERSITY OF TECHNOLOGY AND EDUCATION



COURSE: FINANCIAL MANAGEMENT

GROUP 1 ANALYSIS OF THE FINANCIAL STATEMENT

OF HOA SEN GROUP COMPANY Instructors: Nguyễn Thị Lan Anh

MEMBERS: STUDENT ID

Nguyễn Hoàng Nhật Quyên 19124063

Ho Chi Minh, 2021

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DESCRIPTION TABLE

1 Chapters 1, 3, 4.2, 4.5.3, write

comments, summarize and edit Phạm Thúy Hiền 100%

2 Section 4.5.1, section 4.3,

writing recommendations Nguyễn Thị Ánh Tuyết 100%

3 Section 4.5.2, section 4.4,

writing recommendations

Nguyễn Hoàng Nhật

4

Chapter 2, section 4.1, section

4.2, section 4.5.4, write the

conclusion

Đoàn Quang Anh 100%

RESULTS

………

Ho Chi Minh City, October 2021

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS USED 1

LIST OF TABLES 2

LIST OF GRAPHS 2

CHAPTER 1 THEORETICAL BASIS ON ANALYSIS OF FINANCIAL STATEMENTS IN ENTERPRISES 6

1.1 Financial statements and the meaning of financial statement analysis in the market economy 6

1.1.1 Financial report 6

1.1.2 Importance of financial statement analysis in a market economy 6

1.2 How to analyze corporate financial statements? 6

1.2.1 Comparative method 7

1.2.2 Exclusion method 7

1.2.3 Balanced contact method 7

1.2.4 Dupont financial modeling method 7

1.2.5 Graph method 7

1.3 Content analysis of corporate financial statements 7

1.4 Organization of financial statement analysis in the enterprise 10

CHAPTER 2: INTRODUCTION OF HOA SEN GROUP JOINT STOCK COMPANY 11

2.1 About the company 11

2.2 Line of business 11

CHAPTER 3: SITUATION OF ANALYSIS OF FINANCIAL STATEMENTS OF HOA SEN GROUP CORPORATION 12

3.1 Data source for analyzing financial statements of Hoa Sen Group Joint Stock Corporation 12

3.2 Analysis of balance sheet 12

3.2.1 Analysis of asset movements 12

3.2.2 Analysis of capital fluctuations 32

3.3 Analysis of business performance reports 44

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3.3.1 Horizontal analysis 44

3.3.2 Vertical analysis 54

3.4 Analyze cash flow statement 57

3.4.1 Net cash flows from operating activities 58

3.4.2 Net cash flows from investing activities 59

3.4.3 Net cash flows from financing activities 59

3.5 Analysis of financial indicators 59

3.5.1 Analysis of short-term debt solvency 64

3.5.2 Financial Leverage Indicator Analysis 67

3.5.3 Analyze performance metrics 69

3.5.4 Analyze profitability ratios 73

3.5.5 Valuation indicators analysis 77

CHAPTER 4: COMMENTS AND RECOMMENDATIONS 80

4.1 Comment 80

4.1.1 Comment on the organization of the accounting apparatus 80

4.1.2 Comment on the financial position of the company 80

4.2 Recommendations 82

CONCLUDE 85

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EBIT : Profit before interest and before tax

VAT : Value added

GVHB: Cost of goods sold

Board of Directors: Board of Directors

HTK : Inventory

Business results : Business results

NPAT : Profit after tax

Bank debt: Short-term debt

NV : Employee

NVL : Materials

ROA : Return on total assets

ROE : Return on equity

ROS : Return on sales

CIT: Enterprise income

Limited : Limited Liability

Fixed assets: Fixed assets

Assets: Short-term assets

XDCB : Basic construction

JSC : Joint Stock Company

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2

LIST OF TABLES

Table 3.1 Changes in assets in the period of the first quarter of 2020 -

Table 3.2

Vertical asset fluctuations from the first quarter of 2020 to

Table 3.3 Movement of capital in the period of the first quarter of

Table 3.4

The situation of vertical capital fluctuations in the period

of the first quarter of 2020 - the second quarter of 2021 57

Table 3.5

Horizontal analysis of business results for the period of the first quarter of 2020 - the second quarter of 2021 59

Table 3.6 Longitudinal analysis of business results for the period of

the first quarter of 2020 - the second quarter of 2021 54

Table 3.7 Summary of cash flow results for the period of the first

quarter of 2020 - the first quarter of 2021 57

Table 3.8

Analysis of financial indicators of Hoa Sen Group Joint Stock Company in the period of the first quarter of 2020 - the second quarter of 2021

59

Table 3.9 Financial index of Hoa Phat Group Joint Stock Company

Table 3.10 Financial index table of Vietnam Steel Corporation in the

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Graph 3.3 Movements of cash and cash equivalents in the period of

Graph 3.6 Movement of long-term assets in the period of the first

quarter of 2020 - the second quarter of 2021 22

Graph 3.7 Movements of fixed assets in the period of the first quarter

Graph 3.8 Movements of long-term unfinished assets in the period of

Graph 3.9 Changes in asset structure in the period of the first quarter

Graph 3.10 Changes in liabilities in the period of the first quarter of

Graph 3.11 The situation of short-term debt fluctuations in the period

of the first quarter of 2020 - the second quarter of 2021 38

Graph 3.12 Changes in long-term debt in the period of the first quarter

Graph 3.13 Changes in equity in the period of the first quarter of 2020

Graph 3.14 Changes in capital structure in the period of the first

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4

Graph 3.15 Changes in gross profit in the first quarter of 2020 - second

Graph 3.16 Fluctuations in net revenue for the period of the first

Graph 3.17 Changes in net profit for the period of the first quarter of

Graph 3.18 Changes in financial income in the first quarter of 2020 -

Graph 3.19 Changes in selling expenses in the period of the first

Graph 3.21 Fluctuations in financial income for the period of the first

Graph 3.22

The situation of fluctuations in profit after corporate income tax in the period of the first quarter of 2020 - the second quarter of 2021

54

Graph 3.23

Fluctuations in short-term ratio, quick ratio and instant ratio in the period of the first quarter of 2020 - the second quarter of 2021

64

Graph 3.24 Fluctuations in financial leverage ratios in the period of the

first quarter of 2020 - the second quarter of 2021 67

Graph 3.25 Changes in inventory turnover in the period of the first

Graph 3.26 Changes in receivables turnover in the period of the first

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6

CHAPTER 1 THEORETICAL BASIS ON ANALYSIS OF FINANCIAL

STATEMENTS IN ENTERPRISES 1.1 Financial statements and the meaning of financial statement analysis in the market economy

1.1.1 Financial report

Financial statements (financial statements) are a general picture reflecting the situation of assets, capital sources, revenue, expenses, business results and financial relationships of an enterprise (enterprise) at a point in time or period

1.1.2 Importance of financial statement analysis in a market economy

- Financial statement analysis concepts

Analysis of financial statements of enterprises is essentially the analysis of financial indicators on the reporting system or financial indicators that sources of information from the reporting system in order to assess the financial position of enterprises, providing information to all stakeholders objects with different needs

- The meaning of financial statement analysis in the market economy

Analysis of financial statements in enterprises shows how enterprises use financial resources, factors of production so that there are measures to better use financial resources and production factors to achieve efficiency higher economic returns Therefore, financial statement analysis needs to be considered a regular and important requirement for enterprises in the market economy Analysis of financial statements of enterprises is an effective and indispensable tool for different managers

in the market economy, such as: For business owners and business administrators, for officials and employees, for investors, for lenders, for suppliers, for regulators

1.2 How to analyze corporate financial statements?

Financial statement analysis method is a system of tools and measures to approach and study events, phenomena, internal and external relationships, movements and transformations of investment activities financial and other activities, criteria to assess the situation of investment activities, financial activities, business activities and other activities of enterprises in order to make reasonable decisions

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1.2.3 Balanced contact method

The basis of this approach is the quantitative balance between the two sides of business factors and processes Based on the balance relationships will determine the influence of factors on the fluctuation of the indicator reflecting the object of analysis

1.2.4 Dupont financial modeling method

The Dupont financial modeling method aims to evaluate the interaction between financial ratios by turning a composite indicator into a function of a series of variables That allows to analyze the effect of such ratios on the composite ratio

1.2.5 Graph method

This method is used to illustrate the financial results obtained during the analysis with charts, diagrams, etc The graph method helps the analyst to clearly and intuitively show the movements of the objects research and quickly analyze and orient financial indicators to find out the causes of the change in indicators, thereby promptly taking measures to improve the efficiency of production and business activities

1.3 Content analysis of corporate financial statements

Depending on the position and purpose of using the analyst's information, the content

of financial statement analysis may not be the same between different analysis groups, but in general, financial statement analysis in enterprises includes the main contents the following weaknesses:

- General analysis of financial situation

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8

General analysis of the financial position to make an initial assessment of the financial position of the enterprise Through this work, managers can determine the financial status and strength of the business, know the level of financial independence as well as the financial difficulties that the business has to face, especially in the field of finance payment area Thereby, managers can make necessary decisions on investment, cooperation, joint venture, association, purchase, sale, lending, etc

- Financial structure analysis

Enterprise financial structure is considered from the perspective of both asset structure, capital structure and the relationship between assets and capital Financial structure analysis is the consideration of the situation of capital mobilization and use and the relationship between the mobilization situation and the capital use situation

of the enterprise Thereby helping managers understand the situation of asset allocation and asset financing sources, know the causes and signs affecting the financial balance to make decisions to adjust the mobilization policy operate and use their own capital, ensuring enterprises have a healthy and efficient financial structure and avoid business risks At the same time, the content of this analysis also contributes to reinforce the conclusions drawn when assessing the overall financial situation

- Analyze the situation of securing capital for business activities

To ensure sufficient capital for business activities, enterprises must have financial measures to mobilize and form capital sources The capital source of the enterprise is formed from equity, borrowed capital and capital occupied in the payment process In essence, the process of analyzing the situation of ensuring capital for business activities is the analysis of the financial balance of the enterprise, that is, considering the balance relationship between the assets and the source of the enterprise's assets

- Analysis of the situation and solvency

The situation and solvency of enterprises clearly reflect the quality of financial activities and operational efficiency of enterprises If financial performance is good, solvency is high, enterprises will have less debt, less capital appropriation as well as less capital appropriation On the contrary, if the financial performance is poor, it will

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9

lead to the insolvency of enterprises, misappropriation of mutual capital, and the long-lasting and lingering debts of receivables and payables

- Analyze business performance

Business efficiency is a general economic indicator that reflects the level of use of physical and financial resources of an enterprise to achieve the highest efficiency Therefore, analyzing business performance is a basic content of enterprise financial analysis, contributing to improving the competitiveness of enterprises in the market Through the analysis of factors affecting business performance, enterprises will help businesses know the causes affecting business performance and profitability, thereby taking appropriate measures to improve business efficiency

- Analysis of enterprise value on the basis of balance sheet

According to international and regional practices, there are three main methods of enterprise valuation: asset method, income method, and market comparison method Within each method there are many different calculation techniques With the source

of the document is the financial statements, specifically the balance sheet, enterprises can determine the value of enterprises according to the accounting books - Financial risk analysis

When considering financial risk, it is often necessary to consider debt payment risk and the effect of debt structure on the return on equity of the enterprise Analytical criteria such as solvency criteria, profitability ratios also reflect financial risks To analyze the financial risks of enterprises, we can use the following criteria for analysis:

- Analyze financial risks through indicators reflecting business performance: Effective use of loan interest, return on capital (ROI)

- Analysis of financial risks through financial leverage: Debt ratio, financial leverage, sensitivity of financial leverage:

- Forecasting targets on financial statements

Forecast financial statements are the basis for managers to come up with appropriate and effective business plans to ensure the security of financial activities and improve capital efficiency When making forecasts, it is required that analysts have high professional qualifications and practical experience, understanding of business

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activities of enterprises in the current and future environment Scientific forecasting methods must be based on an objective basis, ensuring high reliability of forecast indicators

1.4 Organization of financial statement analysis in the enterprise

Organizing the analysis of financial statements in enterprises is the setting up of the sequence of work steps to be carried out in the analysis process In order to analyze the financial statements of an enterprise to really promote the effect of the criteria in the decision-making process, the analysis of financial statements must be organized scientifically, reasonably, in accordance with the business characteristics of the enterprise and the mechanism activities, economic and financial management mechanisms and suitable to the interests of each audience Analysis of financial statements in enterprises is usually carried out through the following stages: - Analytical planning phase: This is the first and important stage that greatly affects the quality, time and content of the work analysis Planning analysis includes defining goals, building a system of analytical indicators.- Giai đoạn tiến hành phân tích: This is the stage of implementation and implementation of the work recorded in the plan, in fact, this is a harmonious combination of people, analytical methods, and documents used to achieve information from the targets built

End stage:

This is the final stage of the analysis In this stage, it is necessary to carry out the following specific tasks: Write an analysis report, complete the analysis file

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CHAPTER 2: INTRODUCTION OF HOA SEN GROUP JOINT STOCK

COMPANY 2.1 About the company

Hoa Sen Group Joint Stock Company (Hoa Sen Group), formerly known as Hoa Sen Joint Stock Company, was established on August 8, 2001 After 17 years of establishment and development, from a small private joint stock company with an initial charter capital of VND 30 billion, Hoa Sen Group has risen to become a steel and sheet metal manufacturing and trading enterprise 1 Vietnam and a leading exporter of steel sheet and steel in Southeast Asia Hoa Sen Group currently owns 11 large factories and a system of more than 400 distribution - retail branches spread across the country, Hoa Sen Group's products are exported to 75 countries and territories worldwide gender

2.2 Line of business

- Producing roofing sheets of galvanized steel, zinc-aluminum alloy, galvanized coating and other alloys

- Producing steel purlins, galvanized purlins

- Producing black steel pipes, galvanized steel pipes, galvanized steel pipes of other alloys

- Producing galvanized wire mesh, galvanized steel wire, steel wire of all kinds

- Production of PVC ceiling panels

- Producing all kinds of building materials

- Buying and selling construction materials, production materials and consumer goods

- Warehouse rental and freight services

- Industrial and civil construction

- Producing cold rolled steel in coils

- Leasing machinery, equipment and other tangible goods

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3.2 Analysis of balance sheet

3.2.1 Analysis of asset movements

The balance sheet (Appendix 1) generally reflects the total value of assets owned by the company and the source of those assets at a given time Therefore, analyzing the balance sheet helps us get an overview of the company's financial position

Quarter 2 (2021) and quarter 2 (2020)

Quuarter 2 (2021) and quarter 3 (2020)

Difference % Difference % Difference %

receivables 1,670,105 126.7 1,672,522 127.1 1,491,325 99.6

1 Short-term

receivables from 1,679,115 161.6 1,690,017 164.4 1,498,999 123.0

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4 Provision for

short-term bad debts (15,248) 148.2 (8,237) 47.6 (6,731) 35.8

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100.0 (154,054) (100.0)

Original price

(202,430)

-100.0 (176,595)

100.0 (176,595) (100.0)

Accumulated

depreciation 20,559

100.0 17,393

100.0 22,541 (100.0)

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15

quarter 4 (2020)

Quuarter 2 (2021) and quarter 2 (2020)

1 Short-term receivables from customers 940,040 52.9 294,378 12.1

2 Prepayment to short-term sellers 11,609 11.6 (110,135) (49.6)

3 Other short-term receivables 12,417 7.2 9,023 5.2

4 Provision for short-term bad debts 158 (0.6) 158 (0.6)

2 Provision for devaluation of inventory (20,991) 46.6 (14,442) 28.0

1 Short-term prepaid expenses 1,204 0.9 9,119 6.8

2 VAT is also deductible 118,611 15.7 198,539 29.3

3 Taxes and other amounts receivable

B LONG-TERM ASSETS (500,954) (5.7) (237,196) (2.8)

I Long-term receivables (16,630) (9.0) (7,272) (4.1)

1 Other long-term receivables (16,630) (9.0) (7,272) (4.1)

2 Provision for long-term bad debts (444,269) (5.8) (229,563) (3.1)

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1 Cost of construction in progress (5,000) (18.9) 0 0.0

IV Long-term financial investment (11,722) (3.3) 11,180 3.4

1 Held-to-maturity investment (38,795) (14.2) (15,756) (6.3)

1 Long-term prepaid expenses 4,207,403 23.7 4,618,512 26.6

2 Deferred tax assets 4,708,357 52.2 4,855,708 54.7

(Source: Appendix 1 – Consolidated financial statements for 2021, 2020)

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change in total assets

(Source: Appendix 1 – Consolidated financial statements for 2020,2021)

According to the graph 3.1 “Changes in total assets (capital source) for the period of the first quarter of 2020) – the second quarter of 2021, we see that the total assets of the company from the first quarter of 2020 to the first quarter of 2021 fluctuated slightly, then increased sharply and significantly until the second quarter of 2021

Specifically, based on Table 3.1, "The asset volatility in the second quarter of 2021 has increased sharply compared to the third quarter of 2020 has increased by VND 5533 billion,

ie an increase of about 33.66% compared to the fourth quarter of 2020 In addition, the second quarter of 2020 2021 will increase by VND 4986 billion, or about 29.36% over the same period last year The reason for the outstanding economic growth is that HSG has boosted production and export business at factories across the country This has had a strong impact on the company's asset volatility To better understand the company's volatility, we

go into a detailed analysis of the assets and their impact on the financial position of the company

Short-term assets

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short-term asset volatility

Based on graph 3.2, we can see the slight fluctuation from the first quarter of 2020 to the first quarter of 2020 with not much increase or decrease However, in the second quarter of

2022, there was a remarkable growth, more specifically, in the second quarter of 2021, it increased by about VND 6635 billion, which means that the second quarter of 2021 has increased to 93.55% compared to the first quarter of 2020 Compared to the same period last year, the second quarter of 2021 has increased by VND 6080 billion, an increase of about 79.45% compared to the same period last year, the second quarter of 2020 This is mainly due to the significant increase in cash and cash equivalents To understand why there is volatility in short-term assets, we need to look at the factors that affect it Current assets changed mainly due to the following items:

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19

Cash and cash equivalents

Graph 3.3: Movements of cash and cash equivalents in the period of the first quarter of 2020

Movements in cash and Cash equivalents

Movements of cash and cash equivalents had slight fluctuations, not too strong from the first quarter of 2020 to the first quarter of 2021 But by the second quarter of 2021, there was a strong fluctuation, more specifically, cash and cash equivalents increased to nearly VND 335 billion, accounting for 88.16% compared to the second quarter of 2020 because the company sent a quite a large amount of money into the bank right at the time of the second quarter of 2021 This is a not small proportion due to the change of many factors, so the volatility of cash and cash equivalents changes continuously

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Based on graph 3.4 “The fluctuation of short-term receivables from the first quarter of 2020

to the second quarter of 2021, we see that short-term receivables tend to increase between quarters But it is worth mentioning that it is the second quarter of 2021 because it has increased by a fairly large amount, increasing to nearly 1672 billion dong, accounting for 127.05 percent compared to the second quarter of 2020 The reason is due to the outstanding increase of short-term receivables from customers in parallel with the provision for short-term bad debts However, the larger the receivables, the more capital is occupied by the enterprise (stagnation in the payment stage), affecting the efficiency of capital use of the enterprise The company needs to take measures to ensure the ability to recover debts and avoid affecting the company's finances

In order to have more accurate conclusions about the causes and effects of short-term receivables on the financial position of the company, we will study more closely in the following sections

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Through graph 3.5, we see that inventories increased slightly from the first quarter of 2020

to the first quarter of 2021, but the special thing in the second quarter of 2021 was a very high increase of nearly 4731 billion VND, equivalent to 110.77% compared to the first quarter of 2020 Compared to the same period last year, the second quarter of 2021 has increased by VND 4008 billion, ie an increase of 80.27%, an impressive figure The reason

is that enterprises import a lot of raw materials at high cost

Because too much inventory will affect the current solvency of the business, stagnation of capital, cost of storage and affect the quality of goods if stored for too long But if the inventory is too small, it will not be able to meet the future consumption demand, if there is

a sudden increase in customer demand, it will not be able to promptly meet the needs of customers Therefore, to solve the question of how much inventory is enough, is it reasonable, we will look more closely in the analysis of the inventory ratio

Other current assets

The value of this item affects current assets as well as total assets, but fluctuations in this item account for a small proportion and have a negligible effect, so we may not consider the variation in this item action of this item

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Quý 1/2020 Quý 2/2020 Quý 3/2020 Quý 4/2020 Quý 1/2021 Quý 2/2021

Long-term asset volatility

Based on chart 3.6, we see that long-term assets tend to decrease over the years with a not too large amount However, considering the time of the second quarter of 2021, it decreased really significantly, specifically, long-term assets in the second quarter of 2021 decreased by nearly VND 1390 billion, accounting for 14.44% compared to the first quarter of 2020 Compared to the same period last year, the second quarter of 2021 has decreased by 1094 billion dong, or about 11.73% compared to the second quarter of 2020 As cash and cash equivalents increased, short-term receivables, inventories, and other short-term assets all increased This shows that the company is reducing investment in long-term development and focusing on short-term development resources Movements in long-term assets are influenced by the following items: long-term receivables, fixed assets, investment properties, long-term unfinished assets, long-term financial investments and long-term assets is different Because some items have a small weight, they do not significantly affect the volatility of long-term assets, so we only analyze the following two items:

Fixed assets

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volatility of fixed assets

Based on the graph 3.6, we see that long-term assets decreased significantly over quarters,

so fixed assets also decreased Specifically, in Table 3.7, the fixed assets of the quarters have decreased by a small amount, but almost gradually decreased each quarter, but comparing the difference between the second quarter of 2021 and the first quarter of 2020, the second quarter has decreased decreased by an amount of 1184 billion VND, about 14.21% compared to the first quarter of 2020 Fixed assets decreased over the years, showing that the company did not focus on investing in procurement of equipment, machinery and factories to serving production and business This affects the company's production results and it can be seen that the company is gradually not focusing on long-term production It is possible that enterprises invest in repairing and upgrading fixed assets, causing the cost to increase, reducing accumulated depreciation

Long-term unfinished assets

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Graph 3.8: Movements of long-term unfinished assets in the period of the first quarter of

Quý 1/2020 Quý 2/2020 Quý 3/2020 Quý 4/2020 Quý 1/2021 Quý 2/2021

volatility of long-term unfinished assets

Based on graph 3.8, we can see that the volatility of long-term unfinished assets in the second quarter of 2021 has decreased sharply, specifically, it has decreased by 96 billion VND, accounting for 14.79% of the decrease compared to the first quarter of 2020 and the causes of human This increase or decrease is mainly due to the implementation of investment projects of the company

3.2.1.2 Vertical analysis

Table 3.2: Vertical asset movements from the first quarter of 2020 to the second quarter of

2021 Unit: billlion dong

1

Quarter

2

Quarter

3

Quarter

4

Quarter

1

Quarter

2

A - 7,099 7,653 7,392 9,025 8,878 13,733 42.4 45.0 44.9 50.8 51.1 62.5

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0.10

0.12

0.15

0.12

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0.44

0.25

0.30

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5,531

5,806

6,067

6,354 -6,661

31.4

32.6

35.3

34.2

36.6

30.3

0.14

0.10

0.13 0.00

0.37

0.35

0.38

0.31

-III

Investment 0 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00

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The proportion of short-term assets in total assets of the company tends to increase, by the second quarter of 2021, accounting for 62.51% of total assets, an increase of more than 20% from the time of Q1 2020 (42.45%) and up 17.45% over the same period last year (45.06%

in Q2 2020) The proportion of short-term assets increased Because, cash and cash equivalents increased significantly compared to the previous quarters, accounting for 5.2%

of short-term assets and 3.25% of total assets, especially increasing to 335 billion (equivalent to 88%) ) compared with the same period last year The reason for the increase

in this item is that the company deposited a larger amount of money than previous years from business activities into the bank this quarter (662 billion) The deposit level in the

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previous quarters of the company was around 200-500 billion It is not reasonable for the company to deposit such a large amount of money in the bank because the interest rate earned from business activities is much higher than the interest rate that the company earns from bank deposits, effective The company's capital efficiency is not high The company should put this money into production and business activities will be more reasonable Short-term receivables of enterprises in the second quarter of 2021 (accounting for 13.6% of total assets) increased steadily compared to other quarters, increasing by 1672 billion over the same period last year (equivalent to 127%) but overall Accounts receivable structure is relatively low and reasonable compared to the business's operations

The inventory item had a sudden increase, accounting for 65.6% of short-term assets and 40.98 percent of total assets, nearly doubling compared to all previous quarters and specifically an increase of VND 4008 billion (equivalent to an increase of VND 4008 billion) 80.26%) over the same period last year The reason for the sudden increase in the inventory item was that the enterprise imported more raw materials (approximately 3 times higher than other quarters under consideration) while the price of raw materials was continuously increasing For a manufacturing business, inventory accounting for a large proportion will sometimes bring a lot of disadvantages and this is also unreasonable However, if you look closely in the past 2 years, the demand for flat steel in Europe and North America is increasing very high Having the advantages of price, quality and supply ability, the company has expanded into these markets The company's export volume has grown very strongly and almost all of its inventory has been increased to fulfill orders from these markets In this case, although the proportion of the enterprise's inventory is very much, the structure is still very reasonable

The proportion of long-term assets decreased steadily over quarters, from 57.55% of total assets in the first quarter of 2020 to 37.49% in the second quarter of 2021 Of which, fixed assets accounted for 86.8% of the total assets long-term assets and 32.55% of total assets and tended to decrease steadily over the quarters The steady decrease in fixed assets was due to a steady increase in the accumulated depreciation of tangible fixed assets (increasing

by 20.4% over the same period last year) because the company depreciated more, the company also did not lease assets this quarter Although there is a steady increase in the historical cost of tangible fixed assets, this increase is insignificant compared to the two items that are decreasing deeply above

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The company's asset structure is gradually shifting from long-term to short-term mainly because the company deducts more depreciation Company in general has grown and developed much more in the past 6 quarters This shows that although the asset structure gradually changes from long-term to short-term, it does not have too much impact on the long-term development orientation of the company

General comment on the company's asset situation in the period of Q1/2020 - Q2/2021 Q2 2020: Total assets increased compared to Q1, cash items and cash equivalents, receivables, fixed assets, long-term unfinished assets all decreased, while inventories increased significantly This will affect the current solvency of the company However, the company has borrowed a sum of money to invest in Yen Bai Hotel projects and site clearance for Hoa Sen Ha Nam project, which is a positive sign for the company's upcoming production and business activities company

Q2 2021: The company's asset situation is better, with a sharp increase compared to the second quarter of the same period last year and also a strong increase compared to other quarters Cash items and cash equivalents, short-term receivables, inventories, and other short-term assets all increased, only long-term assets are still on a downward trend due to depreciation increase every year In particular, the cash and cash equivalents and inventory items had a very high growth This is a very positive sign, marking a very good growth in production and business activities of the company in the last quarter Improve the current solvency of the company In addition, the company also expanded the site clearance project

of Hoa Sen Phu My project This is also a positive sign for the company's upcoming business activities

In general, the company's asset structure is shifting from long-term to short-term, but this shift does not affect too much on the company's sustainable development orientation, production and business activities of the company The company has been and is on a strong growth momentum is a testament to that However, the above analysis only helps us to understand a part of the company's financial status To get a fuller view of the company's financial position, we need to analyze the capital sources that form the assets and the structure of the capital sources

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3.2.2 Analysis of capital fluctuations

Capital is the source of assets, so in addition to analyzing asset fluctuations, we also have to analyze capital fluctuations as well as each item in capital Thereby seeing the level of financial independence, helping to better assess the financial capacity of the business

Quarter 2 (2021) and Quarter 2 (2020)

Quarter 2 (2021) and Quarter 3 (2020)

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A LIABILITIES 2,715,171 24.3 3,621,886 35.3

I Short-term debt 3,085,213 34.3 3,810,727 46.1

1 Short-term payables to sellers 3,502,058 239.5 3,925,985 378.1

2 Buyers pay short-term advance 198,751 95.2 92,378 29.3

3 Taxes and other payables to the

4 Payable to employees (206) (0.3) (13,723) (15.4)

5 Short-term expenses (286,311) (59.6) (299,899) (60.7)

6 Other short-term payables 690,362 159.4 528,539 88.8

7 Borrows and short-term (1,059,919) (17.6) (473,828) (8.7)

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financial leases

8 Bonus and Welfare Fund 42,495 98.7 (3,046) (3.4)

II Long-term liabilities (370,042) (17.0) (188,841) (9.5)

1 Loans and long-term financial

1 Other funds under equity (5,317) (15.0) (13,600) (31.0)

2 Undistributed after-tax profit 1,483,099 76.0 995,786 40.8

- Accumulated undistributed

NPAT at the end of the previous

period

1,027,577 128.3 (39,134) (2.1)

- Undistributed NPAT this period 455,522 39.6 1,034,920 180.9

3 Capital for capital construction

4 Non-controlling shareholder

TOTAL FUNDING 4,207,403 23.7 4,618,512 26.6

Since total capital is equal to total assets, the volatility of total capital is the same as that of total assets Therefore, we go into the analysis of items affecting capital

- Liabilities must pay

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Graph 3.10: Changes in liabilities in the period of the first quarter of 2020 - the second

2021

Graph 3.11 shows that short-term debt volatility has increased slightly from the first quarter

of 2020 to the first quarter of 2021, but in the second quarter of 2021, it has increased significantly, specifically here it has increased to VND 3622 billion, or increased 35.28% compared to the first quarter of 2021 Compared to the same period last year, the second quarter of 2021 has increased to VND 2745 billion, or about 24.63% compared to the second quarter of 2020 This is due to the increase in short-term debt It proves that the enterprise still has many debts to pay, reducing the financial reserve fund

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