Fundamental of Financial Management

Vietnam National University – HCMC International University
SCHOOL OF BUSINESS ADMINISTRATION
FUNDAMENTAL OF FINANCIAL MANAGEMENT

Lecturer: Le Dang Thuy Trang
FINANCIAL ANALYSIS REPORT

Student name
Phạm Thị Thạch Thảo .................................................. BAFNIU17060
Nguyễn Thị Anh Thư .................................................... BAFNIU17013
Lý Kim Phụng ............................................................... BAFNIU17004
Lê Đăng Quang……………………………………….……BAFNIU17065
Vũ Đức Hiền ………………………………………….……BABAIU16071
FINANCIAL ANALYSIS REPORT OF VINAMILK COMPANY
TABLE OF CONTENTS
INTRODUCTION ......................................................................................... 3
REPORT SUMMARY .................................................................................. 8
BALANCE SHEET ................................................................................. 9
INCOME STATEMENT .......................................................................... 13
STATEMENT OF CASHFLOW ............................................................... 15
RATIOS ANALYSIS ..................................................................................... 7

SUMMARY OF THE RATIOS TABLE ....................................................... 7
PROFITABILITY RATIO .......................................................................... 7
ASSET UTILIZATION RATIO ……………………………….....…………..…….10
LIQUIDITY RATIO ......................................................................................... 11
SOLVENCY RATIO ....................................................................................... 12
MARKET RATIO .................................................................................... 13
RATIO COMPARISION ……………………………………………………....... 14

PROFITABILITY RATIO ......................................................................... 14
ASSET UTILIZATION RATIO …………………………………….………….15
LIQUIDITY RATIO ......................................................................................... 15
SOLVENCY RATIO ....................................................................................... 16
MARKET RATIO .................................................................................... 17
2017’s & 2016’s RATIO COMPARISION ………………………....…....……….. 19

SUMMARY .................................................................................................. 21
APPENDIX .................................................................................................. 22
BALANCE SHEET ................................................................................. 22
INCOME STATEMENT ………………………………………..…………….23
CASH FLOW STATEMENT .................................................................... 24
REFERENCE .............................................................................................. 26
2
I. INTRODUCTION
(Indicator: Vũ Đức Hiền)
a. Industry:
In recent years, dairy has become one of the most fastest growing sectors in the
food industry of Vietnam. Along with the common trend of developing countries,
Vietnam dairy’s demand is significantly increasing as a crucial supplementary nutrition
source.
One of the most leading dairy companies in Vietnam, Vietnam Dairy Product
Joint-stock Company (Vinamilk), has gained noticeable successes in the Vietnamese
fresh milk market.
Vinamilk is the largest dairy company in Vietnam. Based on the UNDP 2007 Top
200 largest firms in Vietnam report, it is also the 15th largest company in Vietnam and
the most valuable public company listed in Vietnam. In 2010, it is the first company in
Vietnam to be included in the Forbes Asia's 200 Best Under A Billion list that highlights
200 top-performing small- and mid-sized companies with annual revenue under US$1
billion.
However, the economy of the world generally and of Vietnam particularly are
quite unstable. In addition, with the increasingly fierce competition with the birth of many
companies in the same industry has significantly influenced the development of the
company.
b. Main Business Line:

- Producing, trading milk and dairy products
- Producing and trading beverage
- Breeding dairy cows, producing fresh milk material (in 100% capital owned
companies)
Over 200 Vinamilk products are contributed to 30 countries and 18 millions products are
consumed.
3
Vinamilk always brings the international quality nutrition solutions to meet the needs of
all consumers with delicious, nutritious and healthy products attached to leading brands:
Vinamilk milk, Vinamilk yogurt, Ong Tho condensed milk and Southern Star, powdered
milk Dielac, Vfresh Juice…
Vinamilk products mainly serve in Vietnam market with all lines product. Domestic
market takes account of 80% of Vinamilk’s total revenue. For foreign market, the main
markets of Vinamilk are Middle-East area, South-East Asia, and Africa. Main exported
products are powdered milk and condensed milk.
c. Competitive Advantages:
- The leading position supported by the well-established brand: Since its establishment
in 1976, Vinamilk has built a strong brand name for dairy products in Vietnam. The
Vinamilk brand has been used since the start of the company and is now a well-known
dairy brand in Vietnam and has become one of the best-selling dairy products for the
children's market segment. From 6 to 12 years old in Vietnam in 2007.
- Wide distribution and sales network: to December 31, 2009, Vinamilk has sold the
product through 240 distributors along with more than 140,000 outlets in all 64
provinces and cities nationwide. Experienced sales teams including 1,787 salespeople
across the country
- Sustainable relationships with suppliers, ensuring a reliable source of milk.
 Market-oriented research and development capacity.
 Good management experience is proven by the results of sustainable business.
 International standard equipment and technology: import technology from
European countries such as Germany, Italy and Switzerland for application in the
production line. We are the only company in Vietnam that owns the Niro spray
drying system in Denmark, the world leader in industrial drying technology.
 A diverse and powerful products (nearly 200 categories) featuring product lines
targeting specific target audiences such as children, adults and the elderly, as
well as household and Business establishments such as coffee shops. In
addition, through the provision of diverse products to consumers with different
packaging sizes, the company has brought to the market in Vietnam dairy
products convenient to easily carry.
d. Competitors:
Vinamilk's main competitors:
 Dutch Lady Vietnam (a division of Friesland Foods)
4
 Nestlé Vietnam
 Abbott
 Mead Johnson
 Friso
 Nutifood
e. Vision, Mission, Core-value:

- Vision: To become a world grade brand in food and beverage industry, where people
put all their trust in nutrient and health products.
- Mission: To deliver the valuable nutrition to community with their respect, love and
responsibility.
- Core-value:
 Integrity: integrity and transparency in actions and transactions
 Respect: self-respect, to respect colleagues. To respect the Company and
partners. Co-operate with respect
 Fairness: be fair with employees, customers, suppliers and other parties
 Ethics: respect the established ethical standards and act accordingly
 Compliance: comply with legal regulations, the Company’s Code of Conduct,
and the Company’s procedures and policies
5
II. REPORT SUMMARY

 The main objective of this report is to evaluate financial health of Vinamilk under
Vietnamese circumstances and give some recommendations for creditors or
banks, and investors.
 The report includes:

• The financial statements of Vinamilk in recently 5 years.
• The financial ratios of Vinamilk
• Trend analysis & compare financial ratios of Vinamilk over 5 years
6
III. RATIOS ANALYSIS

(Indicator: Phạm Thị Thạch Thảo)
 Summary of the ratios table
VINAMILK
Ratios 2017 2016 2015 2014 2013
Trailing EPS VND 7,094 7,298 7,297 6,874 8,411
Book value per share VND 16,450 15,437 17,435 19,678 21,051
(BVPS)
P/E Times 29.4 19.5 17.5 13.9 16.1
P/B Times 12.68 8.14 7.3 4.9 6.4
Gross profit margin % 47.48 47.73 40.6 35.2 36.1
Net profit margin % 20.14 20.01 19.4 17.4 21.1
ROE % 44.49 43.16 38.3 32.6 39.6
ROA % 32.15 32.89 29.2 25.0 30.7
Short-term ratio Times 1.99 2.89 2.8 2.9 2.6
Liabilities to assets % 31.14 23.73 0.24 0.23 0.23
Debt to equity % 2.27 7.41 0.03 0.03 0.02
 Profitability Ratio
Profitability ratios measure the company’s ability to generate earnings relative to

sales, assets and equity. These ratios assess the ability of the company to generate
earnings, profits and cash flows relative to some metrics, often the amount of money
invested. They highlight how effectively the profitability of the company is being
managed.
VINAMILK
Profitability Ratios 2017 2016 2015 2014 2013
Gross profit margin % 47.48 47.73 40.6 35.2 36.1
Net profit margin % 20.14 20.01 19.4 17.4 21.1
ROE % 44.49 43.16 38.3 32.6 39.6
ROA % 32.15 32.89 29.2 25.0 30.7
Short-term ratio Times 1.99 2.89 2.8 2.9 2.6
EPS VND 7,094 7,298 7,297 6,874 8,411
 Gross profit margin =

Gross profit margin measures how much of every dollar of revenues is left over
after paying cost of goods sold (COGS)
7
Year 2013 2014 2015 2016 2017
Gross profit margin 36.1% 35.2% 40.6% 47.73% 47.48%
 Net profit margin =

Net profit margin measures a company's profitability, which can help managers
analyze company performance.
Year 2013 2014 2015 2016 2017
Net profit margin 21.1% 17.4% 19.4% 20.01% 20.14%
60.00%
50.00% 47.73% 47.48%
40.60%
40.00% 36.10% 35.20%
30.00%
21.10% 20.01% 20.14%

19.40%
20.00% 17.40%
10.00%
0.00%
2013 2014 2015 2016 2017
Gross profit margin Net profit margin
 Return on Equity (ROE) =

The return on equity (ROE) measures the rate of income earned on the amount
invested by the stockholders.
Year 2013 2014 2015 2016 2017
ROE 39.6% 32.6% 38.3% 43.16% 44.49%
8
 Return on Total Assets (ROA) =

The return on total assets (ROA) is a measure of the profitability of total assets.
Year 2013 2014 2015 2016 2017
ROA 30.7% 25.0% 29.2% 32.89% 32.15%
50.00%
45.00% 44.49%
43.16%
40.00% 39.60%
38.30%
35.00%
32.60% 32.89% 32.15%
30.00% 30.70%
29.20%
ROE
25.00% 25%
ROA
20.00%
15.00%
10.00%
5.00%
0.00%
9
 Asset Utilization Ratio
The asset utilization ratio calculates the total revenue earned for every VND of assets
Vinamilk owns. The asset utilization ratio is used to compare Vinamilk’s efficiency over 5
years.
1. Asset turnover ratio =

The asset turnover ratio indicates how much Vinamilk is generating in revenues
for every VND invested in total assets.
2. Fixed asset turnover ratio =

The fixed asset turnover ratio indicates how much Vinamilk is generating in
revenues for every VND invested in fixed assets.
VINAMILK
Asset Utilization Ratios 2017 2016 2015 2014 2013
Asset turnover ratio Times 1.59 1.65 1.51 1.44 1.38
Fixed asset turnover ratio Times 5.39 5.66 4.69 3.93 3.55
Asset Utilization Ratios

6
0
2013 2014 2015 2016 2017
Asset turnover ratio Fixed asset turnover ratio
10
 Liquidity Ratio
Liquidity reflects the ability of Vinamilk to meet its short-term obligations using
assets that are most readily converted into cash. Assets that may be converted
into cash in a short period of time are referred to as liquid assets; they are listed in
financial statements as current assets. Current assets are often referred to as
working capital because these assets represent the resources needed for the day-
today operations of the company's long-term, capital investments. Current assets
are used to satisfy short-term obligations, or current liabilities.
Liquidity ratios provide a measure of the company’s ability to generate cash to

meet its immediate needs.
1. The current ratio is the ratio of current assets to current liabilities and it
indicates the company's ability to satisfy its current liabilities with its current
assets
Current ratio =
2. The quick ratio is the ratio of quick assets (generally current assets less
inventory) to current liabilities; Indicates the company's ability to satisfy current
liabilities with its most liquid assets
Quick ratio =
VINAMILK
Liquidity Ratios 2017 2016 2015 2014 2013
Current Ratio Times 1.88 2.67 2.8 2.8 2.6
Quick Ratio Times 1.6 2.19 2.15 2.18 2.0
Liquidity Ratios
2.8 2.8 2.67
3 2.6
2.18 2.15 2.19
2 1.88
2 1.6
0
2013 2014 2015 2016 2017
Current Ratio Quick ratio
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 Solvency Ratio
Solvency ratio is a key metric used to measure Vinamilk’s ability to meet its debt
and other obligations. The solvency ratio indicates whether Vinamilk’s cash flow is
sufficient to meet its short-term and long-term liabilities.
1. Liabilities to assets=
Liabilities to assets measures the extent of Vinamilk’s leverage.
2. Liabilities to equity =
Liabilities to equity used to evaluate Vinamilk’s financial leverage. The
Liabilities to equity is also referred to as a risk or gearing ratio.
VINAMILK
Solvency Ratios 2017 2016 2015 2014 2013
Liabilities to assets % 31.14 23.73 23.85 23.17 23.20
Liabilities to equity % 45.22 31.12 31.32 30.33 30.25
Solvency Ratios
50.00% 45.22%
45.00%
40.00%
35.00% 30.25% 30.33% 31.32% 31.12% 31.14%
30.00%
23.20% 23.17% 23.85% 23.73%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013 2014 2015 2016 2017
Liabielities to assets Liabilities to equity
12
 Market Ratio
Market value ratios are used to evaluate the current share price of Vinamilk's stock. These
ratios are employed by current and potential investors to determine whether Vinamilk's
shares are over-priced or under-priced.
1. Price-earnings (P/E) ratio =

The price earnings ratio compares the market price of Vinamilk’s stock to
its earnings per share. This ratio reveals the multiple of earnings that the
investment community is willing to pay to own Vinamilk’s stock.
2. Price to Book (P/B) ratio =

Price to Book (P/B) ratio measures the difference between the book value and the
total share price of Vinamilk company.
VINAMILK
Market Ratios 2017 2016 2015 2014 2013
Price-earnings (P/E) ratio Times 29.40 19.5 17.5 13.9 16.1
Price to Book (P/B) ratio Times 12.68 8.14 7.3 4.9 6.4
EPS VND 7,094 7,298 7,297 6,874 8,411
Market Ratios
9,000 35
8,000
30
7,000
25
6,000
5,000 20
4,000 15
3,000
10
2,000
5
1,000
0 0
2013 2014 2015 2016 2017
EPS Price-earnings (P/E) ratio Price to Book (P/B) ratio
13
IV. RATIO COMPARISION

(Indicator: Phạm Thị Thạch Thảo + Nguyễn Thị Anh Thư)
1. Profitability Ratio
As the graph shows in part III, page 10, the gross profit margin of the Vinamilk
company fluctuated between 2013 and 2017. It is a slight decrease approximately
1% from 36.10% to 35.20% in 1 year 2013-2014. Then the gross profit margin
increased considerably from 2014 to 2016 and reached a peak of 47.73% in 2016.
After 1 year, it decreased a little bit about 0.25% and got the margin in 2017 is
47.48%. In contrast, the net profit margin of the Vinamilk company increased
slightly from 2013 to 2017. Before increasing gradually by 2.74% from 17.40% to
20.14% in 4 years 2014-2017, the net profit margin had a dramatical fall nearly 4%
from 2013 to 2014.
Overall, the amount of both ROE and ROA increased gradually from 2013 to 2017.
Between 2013 and 2014, the ROE dropped rapidly by 7% from 39.60% to 32.60%.
After that it grew up considerably by 11.89% and reached a peak of 44.49% in
2017. Likewise, the ROA also fell dramatically in 1 year 2013-2014 from 30.70%
to 25%, approximately 6%. Whereas the ROE increased from 2014 to 2017, the
ROA just increased from 2013 to 2016 with the change by 7.8% and reached a
peak of 32.80%. Then it decreased slightly between 2016 and 2017 from 32.80%
to 32.15%.
Comment:
Profitability that the company Vinamilk has performed in the period 2013-2017 is
very good on all index and demonstrate the sustainable growth trends over the
years.
In the years from 2013-2017, the financial ratio in 2014 & 2017 of Vinamilk had a
slight drop. In 2014, it was due to the decreased in purchasing, and the policy of
imposing a ceiling price for milk powder products from June 2014. The Revenue is
nearly 36 billion USD due to the contribution of foreign companies that have
invested in Vinamilk such as factories Driftwood (USA) and Miraka Limited (New
Zealand). Thanks to the new lines of products that helped the company to compete
in a higher product segment. The Dielac products Grow for children at the age of
1-10 has offset the revenue. In 2017, The price of whole milk powder increased
from $1,974/ton to $2,782/ton has negative impact on the profit margin of the
company. The average selling price is increased by 3% in 2017 so Vinamilk
maintained its double-digit growth rate and revenue increased by 9.08% over the
previous year. Gross margins ratio fell to 47.48% compared to the highest level in
14
history of 47.73% in 2016. Gross profit ratio has increased from 36.1% to 47.48%
due to lower material costs and the reclassification of advertising expenses from
cost of goods sold to cost of sales.
2. Asset Utilization Ratio
It can be seen from the graph in page 12 that the asset turnover ratio grew slightly
from 2013 to 2016 about 0.3 times. Then it dropped with a small change from 2016
to 2017 approximately 0.05 times. In 2016, the asset turnover ratio was highest
and in 2013 was lowest. On the other hand, the fixed asset turnover ratio fluctuated
between 2013 and 2017. It rose rapidly from approximately 3.5 times to over 5.5
times in 4 years 2013-2016 and reached a peak of 5.66 times in 2016. Then the
fixed asset turnover ratio dropped slightly from 5.66 times to 5.39 times. The ratio
in 2013 was the smallest amount of other years.
Comment:
Asset utilization ratios’ Vinamilk has increased in the period 2013-2017 show that
Vinamilk is being more efficient with each VND of assets it has.
Total sales of Vinamilk has risen from 30,948,602 million VND in 2013 to
51,041,076 million VND in 2017, because business efficiency, the market
conditions and consumer product are favorable. But, total assets of Vinamilk
increased slightly from 22,875,414 million VND in 2013 to 34,667,319 million VND
in 2017. Through the analysis results, we see that Vinamilk use the assets of the
company in the production and business operation is very efficient. Fixes assets
of Vinamilk grew from 8,918,417 million VND in 2013 to 10,609,309 million VND in
2017. This shows that Vinamilk manage and invest their assets very closely, they
can calculate the benefits that brought to the company when making investments.
3. Liquidity Ratio
The diagram in page 13 indicates the change of current ratio and quick ratio
between 2013 and 2017. It can be seen from the chart that the current ratio
fluctuated during the period. Before staying unchanged in 2014-2015 at 2.8 times,
the ratio had a slight rise by 0.2 times from 2.6 to 2.8 in 2013-2014. Then it dropped
considerably from a peak of 2.8 times to 1.88 times, nearly 1 times between 2015
and 2017. The current ratio in 2017 was the lowest of all. In the contrary, the quick
ratio decreased gradually during the period in the overview. It was a slight rise from
2 to 2.18, 0.18 times from 2013 to 2014. After that it fell a little bit to 2.15 in 2014-
15
2015 and reached a peak of 2.19 in 2016. In 1 year 2016-2017, the quick ratio
decreased considerably from 2.19 to 1.6, nearly 0.6 times and became the lowest
ratio during the period.
Comment:
Vinamilk’s liquidity ratio is greater than 1 that shows Vinamilk is more liquid and
has better coverage of outstanding debts.
Current asset of Vinamilk has risen from 13,018,930 million VND in 2013 to
20,307,435 million VND in 2017 and current liabilities of Vinamilk has increased
from 5,307,061 million VND in 2013 10,794,261 million VND in 2017. It meant that
Vinamilk had current assets higher than current liabilities, which indicated that the
Vinamilk’s ability to service short-term obligations is favorable.
Inventories of Vinamilk has grown from 3,217,483 million VND in 2013 to

4,021,059 million VND in 2017, but the difference between current asset and
inventories is still greater than current liabilities, so quick ratios of Vinamilk are
above 1 from 2013 to 2017, which indicates that Vinamilk would be able to pay for
its obligations if it was due at that period. By that way, this created crucial
advantage in raising capital for business activities as well as increased credibility
for suppliers of the company.
4. Solvency Ratio
Generally, while liabilities to assets increased from 2013 to 2017, liabilities to

equity fluctuated. From 2013 to 2016, liabilities to assets increased slightly from
30.25% to 31.12% before grew rapidly in 2016-2017 by 14.1% from 31.12$ to
45.22%. Therefore, the amount of liabilities to assets in 2017 was the highest
amount of all. However, liabilities to equity began at 23.20% and then declined
slightly by 0.03% to 23.17% from 2013 to 2014. It got slight growth from 23.17%
to 23.85% between 2014 and 2015 before falling in 2016 with a change by 0.12%
from 23.85% to 23.73%. After that the proportion of liabilities to equity grew sharply
by 7.41% from 23.73% to 31.14%. Therefore, the liabilities to equity in 2017 was
the largest amount throughout the whole period.
Comment:
Solvency ratio shows the ability of the financial autonomy of Vinamilk is very good
Vinamilk's Liabilities to Assets ratio fluctuated at from 23% to 31%, because total
liabilities of Vinamilk has risen from 5,307,061 million VND in 2013 to 10,794,261
16
million VND in 2017, this represents that the company has advocated to use the
debt in a reasonable and stable level over time. Consequently, the bank’s loan for
Vinamilk is very safety.
Vinamilk's liability to equity ratio over the years tend to stabilize at a level below
32% except 2017. This shows that the company operated by the conservative
strategy and limited the financial risks.
Vinamilk strategically used its own capital in the investment rather than borrowing
from banks. The short-term debt of the company is mainly the accounts payable.
Vinamilk's financial ability is very good and their risk of debt distress is low. But by
using too much stockholder’s equity will affect the ability to increase the company
profits and dividends for shareholders.
5. Market Ratio
As the graph shows in page 15, the EPS fluctuate while both the price-earning
ratio and Price to Book ratio changed similarly which increased rapidly between
2013 and 2017. The EPS started in 2013 with nearly 8,500 VND and then
decreased rapidly to approximately 7,000 VND after 1 year. From 2014 to 2015,
the EPS had a slight rise by 200 VND before stabling in 2015-2016 with the amount
of around 7,300 VND. In the last year of the period, the EPS declined slightly to
7,000 VND. Regarding the price-earning ratio, after dropping gradually from about
15 times to over 13 times in 2013-2014, it rose significantly between 2014 and
2016 from over 15 times to 20 times, changed 5 times. After that it increased
rapidly from 20 to nearly 30 times in 2016-2017 and reached a peak of
approximately 27 times. Similarly, the Price to Book ratio also decreased slightly
from 2013 to 2014. From 2014 until 2016, the ratio rose steadily from over 5 times
to 8 times by approximately 3 times. After that it grew considerably from around 8
to 13 times in 2016-2017 and became the highest ratio throughout the whole
period.
Comment:
P/E of Vinamilk currently are at very high levels. This is because the investors are
expected in the development of the company in the future due to the excellent
profitability and investment projects of Vinamilk. It also expresses that the business
is in good heatlh and its risk is low. Investing in Vinamilk’s stock is quite safety but
their profit from dividends to investors is not high.
17
Besides, the ratios of P/B of Vinamilk in 2013 – 2017 at very high levels. It means
that Vinamilk had been successful overall in creating value for its stockholders in
these five years. The reasons for this are that investors are expecting potential
growth of the company in the future with impressive profitability and investment
projects are implemented.
18
V. 2017’s & 2016’s RATIO COMPARISON

(Indicator: Lê Đăng Quang)
From 2016 to 2017, there were changes in types of ratios:
 Profitability Ratio:
+ Gross profit margin slightly decreased by 0.25% from 47.73% to 47.48%
=> Vinamilk really needs to improve gross profit margin.
+ Net profit margin slightly increased by 0.13% from 20.01% to 20.14%.
=> Vinamilk needs to improve this area more.
+ ROE increased by 1.33% from 43.16% to 44.49%.
=> Vinamilk did a great job in this area.
+ ROA decreased by 0.74% from 32.89% to 32.15%.
=> Vinamilk really needs to improve ROA.
+ EPS decreased by 204 VND from 7,298 VND to 7,094 VND.
=> Vinamilk really needs to improve EPS.
 Reasons: the cost of goods manufacturing is too high or the price of goods sold is
too low.
 Asset Utilization Ratio:

+ Asset turnover ratio slightly decreased by 0.06 times from 1.65 to 1.59 times.
=> Vinamilk really needs to improve asset turnover ratio.
+ Fixed asset turnover slightly decreased by 0.27 times from 5.66 to 5.39 times.
=> Vinamilk really needs to improve fixed asset turnover ratio.
 Reasons: typical jobs and business strategies are the factors affecting so much on
these ratios and moreover, the ability of controlling the assets also plays an important
role.
 Liquidity Ratio:
+ Current ratio sharply decreased by 0.79 times from 2.67 to 1.88 times.
=> Vinamilk can both improve or falter it because Vinamilk is a strong company so
it still works well even though the ratio is less than 1.
+ Quick ratio sharply decreased by 0.59 times from 2.19 to 1.6 times.
=> Vinamilk extremely needs to improve quick ratio.
 Reasons: the change of these ratios depends on types of business work, date of
solving the debt in the period of time.
 Solvency Ratio:
+ Liabilities to asset sharply increased by 7.41% from 23.73% to 31.14%.
=> Vinamilk needs to keep it stable, not too high or too low.
+ Liabilities to equity sharply increased by 14.1% from 31.12% to 45.22%.
=> Vinamilk extremely needs to falter liabilities to equity.
19
 Reasons: these ratios depend on the income from raising the business capital not
involved in accounts payable.
 Market Ratio:
+ P/E ratio sharply increased by 9.9 times from 19.5 to 29.4 times.
=> Vinamilk did an excellent job in this area.
+ P/B ratio sharply increased by 4.54 times from 8.14 to 12.68 times.
=> Vinamilk did an excellent job in this area.
+ EPS decreased by 204 VND from 7,298 VND to 7,094 VND.
=> Vinamilk really needs to improve EPS.
 Reasons: they are affected by company’s areas of working, level of risk, financial
sources and potential of growth.
20
VI. SUMMARY
In the financial analysis above, we can see that the financial health of Vinamilk keeps
a stable situation over the previous 4 years from 2013 to 2016 and has some changes in
2017. From the creditor point of view, it is remarkable to point that Vinamilk's liquidity
fluctuated in safety range between 2.2 and 2.8 before dropping in 2017 and both the two
liquidity ratios at a high level are more than 1. This showed a good sight for creditors that
they can be assured of solvency, repayment and interest payments of Vinamilk.
On the other hand, from the investor standpoint, it can be clearly seen that the
indicators of profitability (ROA 32.15% and ROE 44.49%) of the company are always high
while the P/B ratio (the average of 7.884 times) and the P/E ratio (the average of 19.28
times) is fairly slow. In addition, the structure of assets and capital has high sustainability.
This also the key point for choosing investment of investors who can invest long-term or
short-term investment. This showed that both two types of investment are good for
investing Vinamilk.
The following information will illustrate this:
 Creditor or bank:
o Vinamilk's liquidity fluctuated in safety range between 2.2 and 2.8.
o Both 2 Liquidity ratios at a high level are more than 1.
 The creditors can be assured of solvency, repayment and interest payments of the
company.
 Investors:
o The indicators of profitability (ROA 32.15% and ROE 44.49%) of the company
are always high.
o While the P/B ratio (the average of 7.884 times) and the P/E ratio (the average
of 19.28 times) is fairly slow.
o The structure of assets and capital has high sustainability.
 Investors can invest long-term or short-term investment that are good.
21
VII. APPENDIX
*Note: For Income Statement & Cash Flow Statement, Unit (million VND)
22
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VIII. REFERENCE
 http://vietnamembassy-usa.org/vi/node/678
 http://www.amchamvietnam.com/1010/vietnam-dairy-products-joint- stock-
co-vinamilk-to-issue-new-shares/
 https://www.vinamilk.com.vn/static/uploads/bc_thuong_nien/1412564299-
c48e4d8fcfae78aa5c64b53c71a60b1197e34f65e52269b47dc7801b30f006d
4.pdf
 http://www.vnbusinessreg.com/dairies-battle-vietnam-market-share/
 https://brokingrfs.cimb.com/YJ9li1blJIghoVzeCWUTaWtLH4AMD7T3ACeyk
0crz1LWgsazfjXtVwA08xOduBvd7z476lvpIT01.pdf
 http://finance.vietstock.vn/VNM/financials.htm
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Fundamental of Financial Management

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Vietnam National University – HCMC International University

SCHOOL OF BUSINESS ADMINISTRATION

FUNDAMENTAL OF FINANCIAL MANAGEMENT

FINANCIAL ANALYSIS REPORT

INCOME STATEMENT .......................................................................... 13

STATEMENT OF CASHFLOW ............................................................... 15

RATIOS ANALYSIS ..................................................................................... 7

PROFITABILITY RATIO .......................................................................... 7

ASSET UTILIZATION RATIO ……………………………….....…………..…….10

LIQUIDITY RATIO ......................................................................................... 11

SOLVENCY RATIO ....................................................................................... 12

MARKET RATIO .................................................................................... 13

RATIO COMPARISION ……………………………………………………....... 14

ASSET UTILIZATION RATIO …………………………………….………….15

LIQUIDITY RATIO ......................................................................................... 15

SOLVENCY RATIO ....................................................................................... 16

MARKET RATIO .................................................................................... 17

2017’s & 2016’s RATIO COMPARISION ………………………....…....……….. 19

INCOME STATEMENT ………………………………………..…………….23

CASH FLOW STATEMENT .................................................................... 24

b. Main Business Line:

e. Vision, Mission, Core-value:

II. REPORT SUMMARY

 The report includes:

III. RATIOS ANALYSIS

Profitability ratios measure the company’s ability to generate earnings relative to

 Gross profit margin =

Year 2013 2014 2015 2016 2017

Gross profit margin 36.1% 35.2% 40.6% 47.73% 47.48%

 Net profit margin =

Year 2013 2014 2015 2016 2017

Net profit margin 21.1% 17.4% 19.4% 20.01% 20.14%

50.00% 47.73% 47.48%

21.10% 20.01% 20.14%

Gross profit margin Net profit margin

 Return on Equity (ROE) =

Year 2013 2014 2015 2016 2017

ROE 39.6% 32.6% 38.3% 43.16% 44.49%

 Return on Total Assets (ROA) =

Year 2013 2014 2015 2016 2017

ROA 30.7% 25.0% 29.2% 32.89% 32.15%

 Asset Utilization Ratio

1. Asset turnover ratio =

2. Fixed asset turnover ratio =

Asset Utilization Ratios

Asset turnover ratio Fixed asset turnover ratio

Liquidity ratios provide a measure of the company’s ability to generate cash to

Current Ratio Quick ratio

Liabielities to assets Liabilities to equity

1. Price-earnings (P/E) ratio =

2. Price to Book (P/B) ratio =

EPS Price-earnings (P/E) ratio Price to Book (P/B) ratio

IV. RATIO COMPARISION

2. Asset Utilization Ratio

Inventories of Vinamilk has grown from 3,217,483 million VND in 2013 to

Generally, while liabilities to assets increased from 2013 to 2017, liabilities to

V. 2017’s & 2016’s RATIO COMPARISON