Assignment 1:

This document is just only for reference, and you can change the structure of your
assignment.

Part I

1. Introduction of the company

+ Name, headquarters (short paragraph for history)

It will help if you visit the company’s website for reference.

+ Products/services (market)

It will help if you visit the company’s website for reference.

2. Financial Ratio Analyzing

+ Liquidity Ratios

Based on the estimated current ratio, it has been found that over the three quaters in 2022,
Masan's current ratio reduction to decrease; that is 0.99 times in the first quarter of 2022,
0.7 times in the second quarter and 0.58 times in the third quarter. This means that for
each vnd of short-term debt, the company has only VND 0.99 (or 0.7; 0.58) times in
short-term assets that can be converted into cash to repay the debt without significant
reducing it. tell the value of the property. This is a rather low rate compared to the
industry average. Masan should use long-term funding instead of short-term financing to
purchase inventory or finance projects is another way to increase a company's liquidity
ratio.

Likewise the current ratio, Masan's quick ratio, has also decreased over the three quaters
of 2022. In details, quater 1 2022 were 0.65 times, quater 2 were 0.44 times, quater 3 0.35
times were respectively. This ratio is very low compared to the industry average, this
indicates that the company would have trouble paying its debts and that it might be in
danger of going out of business.

Among the liquidity ratios, it has also been found that the cash ratio of Vincom Retail has
also decreased over the three quaters of 2022. In details, quater 1 2022 were 0.32 times,
quater 2 were 0.19 times, quater 3 0.1 times were respectively. The cash ratio is
extremely low, which shows that the ability of this business to pay short-term debts with
cash and cash equivalents will be difficult.
+ Profitability Ratios

Explain in detail (example)

It can be seen easily that there is a dramatic decrease in 2017 of three of them ROA,
ROE and ROI because of the drop in net earnings of Johnson & Johnson in 2017 from
16,585,439,560 million USD to 1,303,571,429 million USD. The route of decline net
earnings was the sudden deep dive of two items which come from income statement:
Current United States taxes on international operations and Provision for taxes on
income. Both of them had increased fourfold from 3,604 million to 13,967 million at the
end of 2017. Annual report of Johnson & Johnson can explain clearly about this matter.
It is related to the new law Tax Cuts and Jobs Act (TCJA) and SEC Staff Accounting
Bulletin 118 (SAB 118). On December 22, 2017, the United States enacted into law new
U.S. tax legislation, referred to as the TCJA. This law includes provisions for a
comprehensive overhaul of the corporate income tax code, including a reduction of the
statutory corporate tax rate from 35% to 21%, effective on January 1, 2018. This new
legislation also eliminated or reduced certain corporate income tax deductions as well as
introduced new provisions that taxed certain foreign income not previously taxed by the
United States. The TCJA also includes a provision for a tax on all previously
undistributed earnings of American companies located in foreign jurisdictions.
Undistributed earnings in the form of cash and cash equivalents are taxed at a rate of
15.5% and all other earnings are taxed at a rate of 8.0%. This tax is payable over 8
years and will not accrue interest. In December 2017, the SEC provided regulatory
guidance for accounting of the impacts of the TCJA, referred to as SAB 118. Under the
guidance in SAB 118, the income tax effects, which the accounting under ASC 740 is
incomplete, are reported as a provisional amount based on a reasonable estimate. The
reasonable estimate is subject to adjustment during a “measurement period”, not to
exceed one year, until the accounting is complete. The estimate is also subject to the
finalization of management’s analysis related to certain matters, such as developing
interpretations of the provision of the TCJA, changes to certain estimates and amounts
related to the earnings and profits of certain subsidiaries and the filing of tax returns. As
a result of the enactment of the TCJA, the Company recorded a provisional tax cost of
$13.0 billion in the fourth quarter of 2017. This provisional charge was assessed as of
January 18, 2018 and consisted of a $10.1 billion charge on previously undistributed
foreign earnings as of December 31, 2017.(source from former student)

It can be seen that the decline of earnings would affect a lot to the liquidity ratio
as ROE and ROA had impressed decrease, however, we just saw a little down of ROI
because ROI is the ratio just bases on the operating income and operating expense that
not related provision as net income-the item includes all of kinds of expenses and
provision.

+ Debt Management (explain)

+ Market value ratios (explain)

+ Efficiency ratios (turnover ratio)

Part II

1. Introduce the bonds issue in the corp.

Choose company details Long term debt (choose several debentures or notes)

Then, you list some necessary information of these bonds: Bonds (name), maturity,
rating, and yield.

2. The bond’s terms and bond yield (read more in your textbook)

+ The relationship between collateral and bonds’ yield (read more in your textbook)

For reference: https://www.investopedia.com/terms/c/collateraltrustbond.asp

+ Risks in investing these bonds (read more in your textbook)

Link for reading:

https://www.investopedia.com/ask/answers/05/bondrisks.asp

https://www.davyselect.ie/investment-choices/risks/risks-of-investing-in-bonds.html

Explain in Vietnamese

https://www.saga.vn/6-rui-ro-lon-nhat-khi-dau-tu-trai-phieu~42727

+ The value of bonds, time value of money, and its applying

Bond formula

Calculate the bond prices that are chosen from the beginning

Compare with the market price for the period and give the conclusion

4. Conclusion

5. References