Name: Nguyen Thi Ngoc Diep

Class: CQ57/51.06
Number: 06

CORPORATE FINANCE
Financial Statement Analysis

Overall analysis of balance sheet

- Vinamilk is the largest dairy company in Vietnam with a market share of
37%, it accounts for 45% of the market for liquid milk, 85% of the market
for condensed milk and yogurt, so Vinamilk has the ability to set the selling
price in the market.
- Asset classes:
+ Short-term assets: Cash and cash equivalents, Short-term financial
investment, Short-term reveivables, Inventory, Other current assets
+ Long-term asset: Long-term receivables, Fixed assets, Investment properties,
Long-term assets in progress, Other long-term assét
- It is easy to see that short-term assets account for the largest proportion of
total assets of the enterprise
Fixed assets declare the status of long-term assets that make up the main
production capacity of the enterprise such as factories, machinery, equipment,
production lines. Therefore, for a manufacturing enterprise, this is a very
important factor and creates the production strength of the business. Therefore,
the composition of fixed assets accounts for a high proportion of long-term
assets, but also accounts for:
+ more than 35% of the total assets of the whole enterprise in 2018; 45% in
2019; 39% in 2020; 32% in 2021
- Evaluation of the growth rate of short-term receivables: the following year's
growth is steady compared to previous years. In which, there are short-term
trade receivables  the credit level of the business is high
  Reasonable, flexible trade policy and high reputation of the business in
commercial activities with partners
- Evaluation of the growth rate of long-term receivables: sudden decrease
from 2018-2021 (from VND 88 billion to VND 16.7 billion)
 Volatile situation in capital structure
- In 2020:
+ Debt ratio (30.5%) decreased, reducing debt leverage ratio compared to
2019 (33.5%)

+ Besides, the company's profitability decreased from 59.45% to 57.13%.

Return on sales increased to 18.84% indicating that the company has a lower
expense growth rate than revenue growth rate.
+ Self-financing ratio in 2020 (69.5%) is higher than in 2019 (66.5%)
+ Return on total assets decreased from 23.61% to 23.2%.
+ Return on equity decreased from 35.5% to 33.4%  management and
equity use efficiency are reduced
+ Vinamilk sells slowly, a lot of inventory are in stock
- In 2019 Vinamilk was evaluated as a reputable export enterprise of Vietnam
with international business orientation, sustainability and long-term. It can
be said that in addition to the huge numbers that Vinamilk has been
accumulating, they have acquired extremely valuable assets for their
business.
 - Evaluation of Vinamilk's debt growth in 2021: increase  liabilities
increase  the level of leverage of the business will be higher
Table: Net sales and profit period 2018-2021
Unit: billion VND

Net sales and profit period 2018-

2021
70
60
50
40
30
20
10
0
2018 2019 2020 2021

Net sales EBT EBIT

From this table, we can see that net sales, EBT, EBIT increased gradually over the
years, but the amount of change is not much. In 2021, due to the impact of the
Covid pandemic and natural disasters, purchasing power decreased, besides, the
competition of businesses also greatly affected the Vietnam market.
Overall analysis of the Statement of income
- In 2019, Vinamilk’s net sales reached VND 56318 billion, up 1.07%
compared to 2018; up 1.06% in 2020 compared to 2019; up 1.02% in 2021
compared to 2020
 Comment: This growth rate stems from Vinamilk's consolidation of business
results of GTNFoods and Moc Chau Milk joint stock companies from the first
quarter of 2020. At the same time, the order to lift social isolation also has a
positive impact on business situation. On the export side, although still affected by
the Covid-19 epidemic, Vinamilk is always actively looking for opportunities to
approach potential markets. The results recorded during this period, Vinamilk
exported milk to the Middle East with a contract worth about 20 million USD, in
addition, it also exported condensed milk to China, nut milk and milk tea to the
Korean market contributed quite a lot to Vinamilk's net sales.
Consolidated gross profit margin in the second quarter of 2020 reached about
46.1%, down 61 basis points compared to the first quarter of 2020. This is because
the cost of imported materials used in the second quarter of 2020 is higher than the
first quarter of 2020.

  2018-2019 2019-2020 2020-2021

5,34170553 4,70021845
the inventory turnover 4,672570195 2 1
11,1787307 11,8373616
receivables turnover 10,43315822 3 3

Overview of the statement of cash flow

- The financial balance of the business is quite stable and safe
- Vinamilk's dairy business is the main source of income
- Compared to the company's profit data, it shows that the ratio of profit to
invested capital is quite high, so the company's financial health is good.
Analyze the relationship between financial statements
- In 2020, net sales decreased by nearly 5% and inventory increased by 14%.
Due to the epidemic situation, it is difficult to export and sell goods at first
- Revenue decreased, so receivables also decreased
- Both business activities and profits increased, showing that the business is
quite efficient
- Total assets increase over the years, showing that the business is expanding
its operation scale. But the decrease in revenue is the result of investing in
redundant assets or not exploiting the full capacity of machinery and
equipment, the area of warehouses and factories.
- The level of stock price stability and shareholder stability is great over the
years
- Rate of share ownership of foreign investors in investment funds
 + Currently, the enterprise does not limit the ownership rate for foreign
investors or raise the ownership level of foreign investors to 100%, just need
the Board of Directors to issue a resolution without the need for a General
Meeting of Shareholders.
+ In the second phase of 2019, Vinamilk plans to pay dividends to existing
shareholders at the rate of 10%, from each share will receive 1,000 VND
with the number of outstanding shares is 1.74 billion shares, equivalent to
1.74 billion VND.
  2018 2019 2020 2021
current ratio 1.9324 1.7117 2.0873 2.1156
quick ratio 1.4130 1.3667 1.7422 1.7188
0.9583579 1.366735 1.36944
cash ratio 1 1.0455649 1 7
debt ratio 0.2969 0.3349 0.3053 0.3278
equity ratio 0.7031 0.6651 0.6947 0.6722
0.2969198 0.3348693 0.305277 0.32779
debt to equity ratio 5 6 7 9
3.9327017 3.7813791 4.304685 4.79429
fixed assests turnover 9 7 5 4

- Current ratio ≈ 2
- Quick ratio ≈ 1
- Cash ratio > 1
- Debt ratio < 1  Vinamilk has more assets than liabilities
- Equity ratio < 1
- Debt equity ratio < 1  Assets of the business are financed mainly by equity 
business has less difficulty in finance
- Fixed assets turn over ≈ 4
 Vinamilk's ratios are always at a safe point  The enterprise has the ability to
fulfill its debt repayment obligations when due, its business activities are quite
stable and it is competitive in the market.