UNIVERSITY OF ECONOMIC HCM CITY

School of Management

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FINAL EXAM

ANALYSIS OF THE FINANCIAL SITUATION OF

Mobile World Joint Stock Company

Lecturer : Dr. Tran Duong Son

Course : Finace for Managers
Class : K47 - ADC07
MHP : 23D1MAN50213205

Ho Chi Minh City - 2023

 Group’s result

Le Tuan Trinh Thi Dinh Thai Doan Nguyen Le Duc

Attitude
Thinh Thao Phuong Hoang Thuy Duong Thanh
Le Tuan
7 7 7 7 7
Thinh
Trinh Thi
7 7 7 7 7
Thao Phuong
Dinh Thai
7 7 7 7 7
Hoang
Doan Nguyen
7 7 7 7 7
Thuy Duong
Le Duc
7 7 7 7 7
Thanh
Average 7 7 7 7 7

Le Tuan Trinh Thi Dinh Thai Doan Nguyen Le Duc

Attitude
Thinh Thao Phuong Hoang Thuy Duong Thanh
Le Tuan
7 7 7 7 7
Thinh
Trinh Thi
7 7 7 7 7
Thao Phuong
Dinh Thai
7 7 7 7 7
Hoang
Doan Nguyen
7 7 7 7 7
Thuy Duong
Le Duc
7 7 7 7 7
Thanh
Average 7 7 7 7 7

Le Tuan Trinh Thi Dinh Thai Doan Nguyen

Le Duc Thanh
Thinh Thao Phuong Hoang Thuy Duong

Signature
 Tables of Content
1. Introduction...........................................................................................................................1
- Introduction to the research article....................................................................................1
- The process of formation and development of Mobile World Joint Stock Company.......1
+ General information:.................................................................................................1
- Company Introduction:......................................................................................................3
+ Business area:............................................................................................................3
+ Organizational structure:...........................................................................................4
+ Company’s position:..................................................................................................5
2. Ratios analysis.......................................................................................................................6
2.1. Results presentation......................................................................................................6
2.1.1. Liquidity ratios:..................................................................................................6
2.1.2. Capital Structure ratios:......................................................................................7
2.1.3. Profitability ratios:..............................................................................................8
2.1.4. Asset management ratios:...................................................................................9
2.1.5. Management effectiveness ratios:.....................................................................10
2.1.6. Valuation ratios:................................................................................................12
2.2. MWG Time-trend analysis.........................................................................................13
2.2.1. Liquidity ratios:................................................................................................13
2.2.2. Capital Structure ratios:....................................................................................14
2.2.3. Profitability ratios:............................................................................................15
2.2.4. Asset management ratios:.................................................................................17
2.2.5.Management effectiveness ratios:......................................................................18
2.2.6.Valuation ratios:.................................................................................................19
2.3. MWG Peer Group analysis ( MWG - FRT )..............................................................21
2.3.1. Liquidity ratios:................................................................................................21
2.3.2. Capital Structure ratios:....................................................................................22
2.3.3. Profitability ratios:............................................................................................23
2.3.4. Asset management ratios:.................................................................................24
2.3.5. Management effectiveness ratios:.....................................................................25
2.3.6. Valuation ratios:................................................................................................26
3. Bankruptcy analysis...........................................................................................................27
4. Risk analysis........................................................................................................................28
5. Growth analysis..................................................................................................................32
6. Dupont.................................................................................................................................35
7. Intrinsic Value.....................................................................................................................36
8. Limitation...........................................................................................................................38
9. References............................................................................................................................39
1. Introduction

- Introduction to the research article

Many economic experts consider Vietnam's retail market to be one of the most exciting
in the world thanks to the openness of its large economy, large population of over 96 million
people, young population structure and the government is creating many conditions,
loosening policies to attract external resources, promoting the private economy, towards a
market economy.

At the same time, Vietnamese businesses have the strength to capture the psychology of
domestic customers thanks to the easily identifiable supply and demand characteristics.

Therefore, Mobile World Investment Joint Stock Company has been very successful
and has a leading position in many fields, being the only retailer in Vietnam present
throughout the country, with many mobile phones and top selling laptops in Vietnam.

The topic “ Analyzing the financial statements of Mobile World Joint Stock Company ”
was selected for research to help investors assess the overall financial situation and business
performance. From there, the direction of improvement and development is reasonable and
sustainable.

- The process of formation and development of Mobile World

Joint Stock Company

+ General information:

 Company’s name: Mobile World Investment Corporation.

 Stock code: MWG.
 Certificate of business registration number: 0306731335 issued by Binh Duong
Department of Planning and Investment on January 16, 2009.
 Charter capital: 14,638,792,800,000 VND.
 Head office address: 222 Yersin, Phu Cuong Ward, Tx. Thu Dau Mot, Binh Duong
Province, Vietnam.
 Phone/Fax: (+84 8) 8125960 - Fax: (+84 8) 8125962.
 Website: www.mwg.vn.

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 + History:

- In March 2004, Mobile World Co., Ltd was established

2004
- October 2004, the first store was opened

2007 Invested by Mekong Capital, changed to a corporation

- Thegioididong.com stores continuously popped up all over the country

2010 - At the end of 2010, a system purely operating in household equipment retail - Den May Xanh was
launched

2011 At the end of 2011, the number of stores reached 200, 5 times higher than the number in 2009

- In March 2012, opening a supermarket in Bac Giang, becoming the first and only store system to
2012 retail mobile devices in all over 63 provinces
- Dien May Xanh appeared in 9 provinces with 12 shops

- Listed on the HOSE

2014 - The number of thegioididong.com stores increased by 60% and NPAT climbed by 160% over
2013

- Thegioididong chain continues to dominate and increase market share with nearly 900
supermarkets
- Dien May Xanh became the first electronics retailers of Vietnam, with a store system spreading
over 63/63 provinces with more than 250 stores
2016
- Started using a new retail chain: Bach Hoa Xanh mini-stores
- The company had an impressive business result with profit after tax increasing by 47% compared
to 2015
- Enterprise value reached 1 billion USD at the end of 2016

- Thegioididong.com maintained its leading position in market share with 1,000 stores
- Dien May Xanh owned 640 stores nationwide
2017
- Dien May Xanh store chain jumped by 280 stores
- Opening the first Bigphone store in Cambodia

- Thegioididong.com and dienmayxanh.com dominated Vietnam market with 45% of mobile phones
market share and 35% of electronics market share
- Bach Hoa Xanh reached the breakeven EBITDA at store level
2018
- Completed the purchase of Tran Anh retail stores
- Completed the investment in minority shares at An Khang Retail SJC - An Khang drugstore chain
operator

- Mobile World chain has 996 stores, Dien May Xanh has 1018 stores
- Fashion watches and laptops were added into a number of stores to expand market share
2019
- Bach Hoa Xanh chain expands 600 points of sale, bringing the total number of stores to 1008
- At the end of 2019, the first electronics retail store was put into trial in Cambodia

2020 - The Gioi Di Dong and Dien May Xanh continue to strengthen its No. 1 position in the retail of
technology equipment and consumer electronics, continuously widening the gap with other retailers.
- Micro-store model - Dien May Xanh Supermini (SMS) - was put into testing since mid-2020 and
has developed rapidly with 302 stores in 61/63 cities.

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 - Bluetronics became the No.1 retailer of mobile phones and consumer electronics in Cambodia
with 37 stores
- Bach Hoa Xanh became one of the top three biggest retail chains in the food and FMCG segments
with 1,719 stores
- Experimented with the 4KFarm model (transferring technology and supporting farmers to grow
safe vegetables under the "4 No" policies of zero pesticide, non-GMO seeds, zero preservatives and
zero growth substances)

- Company Introduction:
+ Business area:
The main areas of activity in 2020 of the Company and its subsidiaries ("Group of
Companies") are buying, selling, warranty and repair: computer equipment, phones, phone
components and accessories with Mobile World brand, items electricity machinery with the
brand name Dien May Xanh and food, food, beverage and other goods with the brand name
Bach Hoa Xanh.

In MWG's ecosystem, besides the subsidiaries running the retail chains

(thegioididong.com, Dien May Xanh, Bach Hoa Xanh, An Khang pharmacies...), there are
other subsidiaries providing related services such as: after sales - installation services, last-
mile delivery, logistics and warehousing services, distribution of safely grown agricultural
products 4KFarm.....In addition, MWG has expanded to regional markets with the consumer
electronics retail chain in Cambodia and a JV in Indonesia.

+ Organizational structure:
● Organizational structure:

General meeting of
Shareholder
Board of
Supervisor

Board of Director

Board of
Management

3
TGDD-DMX Bach Hoa Electronic & Finance &
ICT HR
Xanh White goods Accounting

● Subsidiaries and Associated company:

Bach Hoa
TGDD-DMX Home
Accessories IT Logistic
online Xanh online Applicanes

SUBSIDIARIES BUSINESS SECTORS

Mobile World JSC E-commerce products

Grocery &
Construction&
Costumer
Big phone An Khang Nulticat After Sale
FMCGs service Experiences
Bach Hoa Xanh Trading JSC Food trade

Tran Anh Digital World., JSC E-commerce products

Laptops Watches Marketing Business
Premises
The Gioi Di dong Information Technology Limited
Information technology
Company
Investor Relation
MWG (Cambodia) CO., LTD Food trade Legal
&Investment

CIRM CO.,LTD Repair of machinery and equipment

ASSOCIATED COMPANY BUSINESS SECTORS

AnKhang Retail JSC Pharmaceutical retail

+ Company’s position:
Mobile World Investment Corporation (MWG) is the leading mobile and electronics
retailer in Vietnam, with a dominant market share of 45% and 35% respectively in 2018. The
company has a vast retail network of over 2,500 stores all over Vietnam, making it easily
accessible to customers throughout the country.

MWG has been consistently recognized for its outstanding business performance and
industry leadership. The company was named in the TOP 50 best big public companies in
Asia by Forbes and was the only Vietnamese representative in the Top 100 Asia-Pacific
Retailers voted by Retail Asia Magazine and Euromonitor.

Since its expansion into groceries and FMCG retailing in 2015, MWG has become a
formidable player in this segment, thanks to its Bach Hoa Xanh (BHX) chain. MWG's
operations can be divided into three main segments: mobile phones, tablets, and laptops with
thegioididong.com (TGDD); electronics, air conditioners, and household appliances
(Consumer electronics) with Dien May Xanh (DMX), including the Tran Anh store chain;
and groceries and FMCGs with Bach Hoa Xanh (BHX). Additionally, MWG owns
BigPhone.com, a store chain retailing mobile devices on international markets, with 10 stores
concentrated in Phnom Penh, Cambodia.

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2. Ratios analysis
Financial ratios are designed to extract important information that might not be obvious
simply from examining a firm’s financial statement. Which company is in a stronger position.
It is tough to answer this without breaking down each firm’s ratio groups. In this essay, we
will thoroughly calculate the financial ratios for Mobile World Group ( MWG ) in the period
2018 - 2022 ( using data from balance sheets and income statements given in Sheet 1 - Excel,
note that VND amounts are in millions ) in advance. Based on the results of the calculation,
we will next conduct: (1) MWG Time-trend analysis with a view to examining how a MWG
ratio(s) have performed historically in particular; (2) MWG Peer group analysis with a view
to using MWG major competitor - FPT Retail ( FRT ) for comparison of results.

2.1. Results presentation

We divided both MWG and FRT financial ratios into 6 major groups each, which are
widely used by many analysts and investors: (1) Liquidity ratios; (2) Capital structure ratios;
(3) Profitability ratios; (4) Asset management ratios; (5) Management effectiveness ratios; (6)
Valuation ratios. Each has been calculated thoroughly in the period shown:

2.1.1. Liquidity ratios:

Liquidity - MWG
Ratios/ year 2017 2018 2019 2020 2021 2022
Current ratio - 1,30 1,23 1,27 1,22 1,71
Quick ratio - 0,33 0,33 0,61 0,54 0,73

Liquidity - FRT
Ratios/year 2017 2018 2019 2020 2021 2022
Current ratio - 1,20 1,16 1,19 1,12 1,12
Quick ratio - 0,58 0,53 0,75 0,58 0,34

A Liquidity Ratio is used to measure a company’s capacity to pay off its short-term
financial obligations with its current assets. In this essay, we mentioned the two most
important liquidity ratios, including Current Ratio (CR) and Quick Ratio (QR).
Current Ratio: measures a company’s ability to pay short-term obligations or those due
within one year.

Current ratio = Current Assets / Current Liabilities

Quick Ratio: also known as the Acid-Test Ratio. It measures the ability to meet short-
term obligations with the most liquid assets, excluding inventory.

Quick Ratio = Current Assets - Inventory / Current Liabilities

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 2.1.2. Capital Structure ratios:

Capital Structure - MWG

Ratios/year 2017 2018 2019 2020 2021 2022
Debt ratio - 0,68 0,71 0,66 0,68 0,57
TIE - Ratio - 9,68 9,89 10,11 10,60 5,45
Debt - to - equity ratio - 2,13 2,43 1,97 2,09 1,33

Capital Structure - FRT

Ratios/year 2017 2018 2019 2020 2021 2022
Debt ratio - 0,78 0,81 0,77 0,84 0,80
TIE - Ratio - 5,54 3,06 1,25 1,42 3,10
Debt - to - Equity Ratio - 3,46 4,15 3,40 5,42 4,11

Capital structure is the index which shows that the combination between debt and
equity to contribute to company's asset and operation, each company will have a different
capital structure even companies in the same industry and are competitors, capital structure is
also expressed as how to use economic leverage, the balance between interest expense and
decrease in the company's weighted average cost of capital (WACC) to increase intrinsic
value. The company is very important, but on the contrary, taking MWG as an example, the
Debt ratio, D/E, TIE - Ratio are very high. Let's start with the first debt ratio

Debt ratio = Total liabilities/Total assets

Expressed as the dependence of total debt on capital and to be more objective this
figure is often compared with rival firms and the same industry.
Next is D/E:

D/E= Total liability/total Shareholder equity

The total debt to equity ratio shows how dependent on debt the company is.
One information related to this ratio is the higher this number, the greater the financial
risk of the company, but once this number is abnormally reduced, it is also possible that the
company is not making optimal use of capital to expand its operations.Index This is often
separated as the ratio of short-term debt and long-term debt to analyze the matter more
closely.
TIE - ratio:

TIE-ratio = EBIT/I

This index is also assessed as a strong or weak level of interest burden, which is also
one of the indicators that banks often evaluate to consider lending to businesses.

2.1.3. Profitability ratios:

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 Profitability - MWG
Ratios/ year 2017 2018 2019 2020 2021 2022
Net profit margin - 3,33% 3,75% 3,61% 3,98% 3,07%
Gross profit margin - 17,68% 19,07% 22,07% 22,47% 23,13%
EBIT margin - 4,88% 5,50% 5,53% 5,81% 5,56%
Operating profit margin - 4,36% 4,93% 4,99% 5,26% 4,93%

Profitability - FRT
Ratios/ year 2017 2018 2019 2020 2021 2022
Net profit margin - 2,27% 1,28% 0,17% 1,97% 1,29%
Gross profit margin - 13,36% 12,69% 13,92% 14,01% 15,59%
EBIT margin - 3,47% 2,48% 0,97% 0,83% 2,38%
Operating profit margin - 2,63% 1,64% 0,10% 2,43% 1,57%

Profitability ratios are a class of financial metrics that are used to assess a business's
ability to generate earnings relative to its revenue,operating costs, balance sheet assets, or
shareholders’ equity over time, using data from a specific point in time. They are among the
most popular metrics used in financial analysis.

Profitability ratios can be a window onto the financial performance and health of a
business. Ratios are best used as comparison tools rather than as metrics in isolation.
Profitability ratios can be used along with efficiency ratios, which consider how well a
company uses its assets internally to generate income (as opposed to after-cost profits).
Related to Profitability ratios, we need to mention: Net profit margin, Gross profit margin,
EBIT, Operating profit margin.

Net profit margin is a financial ratio that measures the percentage of revenue that remains
as profit after all expenses, including taxes and interest, have been deducted. The formula and
calculation used for this process are as follows:

Net Profit Margin = (Net Profit / Total Revenue) x 100

Gross profit margin is a financial ratio that measures the profitability of a company by
calculating the percentage of revenue that remains after deducting only the cost of goods sold
(COGS) from its total revenue. It represents the amount of revenue that is available to cover
operating expenses and generate a profit. The formula and calculation used for this process
are as follows:

Gross Profit Margin = (Gross Profit / Total Revenue) x 100

Operating profit margin is a financial ratio that measures the profitability of a

company by calculating the percentage of operating profit that remains after deducting all
operating expenses from its total revenue. It represents the percentage of revenue that is

7
 available to cover non-operating expenses, such as interest and taxes. The formula and
calculation used for this process are as follows:

Operating Profit Margin = (Operating Profit / Total Revenue) x 100

2.1.4. Asset management ratios:

Asset management - MWG

Ratios/ year 2017 2018 2019 2020 2021 2022
Total assets turnover - 3,40 2,93 2,47 2,26 2,25
Inventory turnover - 4,83 3,83 3,75 3,92 3,74
Account receivable turnover - 40,16 60,86 63,66 51,69 43,29
Current-assets turnover - 4,10 3,50 3,00 2,75 2,76

Asset management - FRT

Ratios/ year 2017 2018 2019 2020 2021 2022
Total assets turnover - 3,39 2,83 2,45 2,78 2,84
Inventory turnover ratio - 6,27 4,93 4,84 5,73 4,45
Account receivable turnover
- 13,76 13,95 10,96 12,91 23,28
ratio
Current-assets turnover ratio - 3,68 3,03 2,63 2,96 3,07

The ratio of a company's sales or earnings to the value of its assets is measured by asset
turnover. Asset turnover is a measure of how effectively a corporation generates revenue
from its assets.

A corporation can profit from its assets more effectively if its capital turnover ratio is
higher. A corporation with a low asset turnover, on the other hand, shows that its assets are
not being used effectively to create revenue.

Total Asset Turnover = Total Sales /( (Beginning Assets + Ending Assets)/2)

Inventory turns are a financial indicator that illustrates how much stock a company sells
in relation to its cost of sales over a specific time period (COGS). The number of days in a
period (often a fiscal year) can then be divided by the inventory turnover ratio to determine
the average number of days it takes for a company to sell its inventory.

Making better judgments about pricing, production, marketing, and purchasing can
benefit businesses. It is one of the metrics for measuring how efficiently a business uses its
resources.

Inventory Turnover = Cost of good sold / Average Value of Inventory

8
 How frequently a business collects its typical balance of accounts receivable is
measured by the accounts receivable turnover ratio. It measures how well a company's
procedures for maintaining customer credit lines and collecting unpaid sums from them work.

A company's accounts receivable turnover ratio will be high for an effective business
and low for an ineffective one. This indicator is frequently used to evaluate how businesses
within the same sector compare to their rivals.

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

The current asset turnover ratio shows how frequently sales of current assets occur over
the course of a specific time period. A higher percentage of sales results from a higher capital
turnover rate. Hence, a company's potential to make money increases as the working capital
turnover ratio rises.

Current Assets Turnover = Liquid Sales / Liquid Liabilities = Net Sales / Current Assets

2.1.5. Management effectiveness ratios:

Management effectiveness - MWG

Ratios/ year 2017 2018 2019 2020 2021 2022
ROA - 11,3% 11,0% 8,9% 9,0% 6,9%
ROE - 38,7% 36,3% 28,4% 27,3% 18,5%
ROIC - 18,77% 17,80% 17,60% 16,25% 13,68%

Management effectiveness - FRT

Ratios/ year 2017 2018 2019 2020 2021 2022
ROA - 7,69% 3,62% 0,41% 5,49% 3,67%
ROE - 35,57% 17,47% 1,97% 30,56% 20,94%
ROIC - 25,80% 7,04% 0,11% -3,71% 8,87%

Even with the best products or services, companies have trouble delivering strong long-
term growth unless their management makes sure that everything operates effectively and
efficiently. Management effectiveness ratios compare financial measures from company
financial statements to evaluate management performance. Of all the fundamental criteria that
long-term investors consider, three of the most important are return on equity (ROE), return
on assets ( ROA), return on invested capital ( ROIC).

Return on assets (ROA) is a metric that indicates a company's profitability in relation to

its total assets. ROA can be used by management, analysts, and investors to determine
whether a company uses its assets efficiently to generate a profit. It's always best to compare

9
the ROA of companies within the same industry because they'll share the same asset base.
ROA factors in a company's debt while return on equity does not. The formula and
calculation used for this process are as follows:

ROA = Net income / Average total assets

Return on equity (ROE) is the measure of a company's net income divided by its
shareholders' equity. ROE is a gauge of a corporation's profitability and how efficiently it
generates those profits.The higher the ROE, the better a company is at converting its equity
financing into profits. The formula and calculation used for this process are as follows:

ROE= Net income/ Average shareholders’ equity

Return on invested capital ( ROIC ) is the amount of money a company makes that is
above the average cost it pays for its debt and equity capital. Comparing a company's ROIC
with its weighted average cost capital (WACC) reveals whether invested capital is being
used effectively. The formula and calculation used for this process are as follows:

ROIC = NOPAT / Invested capital

In which:
NOPAT: Net operating profit after tax
Invested capital = Total debt + equity - cash

2.1.6. Valuation ratios:

Valuation - MWG
Ratios/ year 2017 2018 2019 2020 2021 2022
P/E - 13,01 13,16 13,74 19,70 15,27
P/B - 4,31 4,17 3,48 4,77 2,63
P/S - 0,45 0,49 0,50 0,79 0,47

Valuation - FRT
Ratios/ year 2017 2018 2019 2020 2021 2022
P/E - 14,49 8,06 120,30 17,84 20,94
P/B - 4,51 1,39 2,14 5,19 4,65
P/S - 0,33 0,10 0,17 0,35 0,27

A valuation ratio measures the relationship between the market value of a company or
its equity and some fundamental financial metric (e.g., earnings). The point of a valuation
analysis is to show the price you are paying for some stream of earnings, revenue, or cash

10
flow (or other financial metric). In this essay, our group will fundamentally mention 3 most
important ratios over the valuation, including P/E, P/B, P/S.

The price-to-earnings ( P/E) ratio is the ratio for valuing a company that measures its
current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also
sometimes known as the price multiple or the earnings multiple. A high P/E ratio could mean
that a company's stock is overvalued, or that investors are expecting high growth rates in the
future. The formula and calculation used for this process are as follows:

P/E = MVS / EPS

In which:
MVS: Market value per share
EPS: Earnings per share

The price-to-book (P/B) ratio measures the market's valuation of a company relative to
its book value per share ( BVPS ). The market value of equity is typically higher than the
book value of a company's stock. The price-to-book ratio is used by value investors to
identify potential investments. The formula and calculation used for this process are as
follows:

P/B = MVS / BVPS

In which:
MVS: Market value per share
BVPS: Book value per share

The price-to-sales (P/S) ratio shows how much investors are willing to pay per dollar of
sales for a stock. A low ratio could imply the stock is undervalued, while a ratio that is
higher-than-average could indicate that the stock is overvalued. The formula and calculation
used for this process are as follows:

P/S = MVS / SPS

In which :
MVS: Market value per share
EPS: Sales per share

2.2. MWG Time-trend analysis

2.2.1. Liquidity ratios:

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 Chart 1: Liquidity - Time-trend analysis 2018-2022 for
Mobile World Investment Corp.

The trend in MWG's liquidity ratios in Vietnam from 2018 to 2021 was mostly stable,
but there was a significant upward trend in both the current and quick ratios in 2022. MWG
achieved its highest current ratio of 1.71 and its highest quick ratio of 0.73 in 2022.

From 2018 to 2021, MWG's current ratio remained stable, oscillating around 1.2 to 1.3.
This indicates that MWG had enough current assets to meet its short-term obligations without
relying heavily on external financing or incurring significant debt. However, in 2022, the
current ratio surged by over 29% to stand at 1.71. It was clear that the company had a higher
proportion of current assets relative to its current liabilities, suggesting that MWG improved
its liquidity position and was better able to meet its short-term obligations.

In 2018 and 2019, the quick ratio stayed unchanged at 0.33. In 2020, it rose to 0.61,
indicating that the company had a higher proportion of quick assets to meet its short-term
obligations. However, the quick ratio plunged to 0.54 in 2021, suggesting that the company
had a lower proportion of quick assets relative to its short-term obligations. That decrease
could be due to a decrease in the company's cash or cash equivalents, or an increase in its
short-term obligations. Nevertheless, in 2022, the quick ratio of MWG showed a significant
upward trend again, reaching 0.73, indicating that MWG had a higher proportion of quick
assets to meet its short-term obligations.

From the analysis, in the aggregate, it is clear that MWG's liquidity ratios have
experienced an upward trend since 2021, with the current and quick ratios reaching their
highest values in 2022. This indicates that MWG has improved its ability to meet its short-
term obligations and generate cash to pay off its debts, which is a positive sign for the
company's financial health. We expect this trend to continue in the future, indicating that
MWG is likely to maintain a strong liquidity position.

12
 2.2.2. Capital Structure ratios:

Chart 2: Cappital Structure - Time-trend analysis 2018-2022 for

Mobile World Investment Corp in Excel.

This chart evaluates the D/E, debt ratio, and TIE ratios related to the capital structure of
MWG in the last 5 years (2018–2022). Overall, D/E, debt ratio TIE-ratio tended to change
differently; D/E fluctuated quite a lot over the period, but debt ratio stability was always
created; it changed very little, specifically in 2022, and TIE-ratio was stable in the period
2018–2021 and decreased sharply in 2022. The peaks of D/E, debt ratio, and TIE ratio were
2.43 and 0.71.10.6, respectively, but in different years.

The increase and decrease of D/E are always shown; from 2018-22019 it increased
slightly from 2.13 to 2.43 but decreased from 2.43 to 1.97 in 2019-22020 showing that this
period was difficult for MWG in terms of debt utilization and equity decreases. 2.09 was the
number that showed the good return on debt and equity for MWG. In 2022, this index
dropped sharply to only 1.33; this plummeted by up to 63% in the D/E index, partly showing
that the use of capital to expand its operations was not as effective as the theory presented.

The debt-ratio had been stable near 0.7 during 2018–2021, which shows that MWG had
managed this metric very well during this time. If this ratio is too high, the company may face
many difficulties. in finance. In 2022, the debt ratio decreased slightly to 0.57; this is
probably the difference between pre-made stabilizations.

The TIE-ratio was probably moving close to the debt ratio, stable for a period of time
(2018-2021) near 10 during which MWG's ability to pay interest was very good. The
outstanding point was probably 5.45 in 2022, a sharp drop of nearly 50% compared to 2021
where the peak of this index was made. An increase in interest rates but a decrease in EBIT
was probably the reason for this sharp decline.

13
 From the above trend analysis, we can see that 2022 is the meeting point of changes in
D/E, debt ratio, and TIE ratio. We can see that the problem of debt is high, EBIT is
decreasing, and equity is decreasing, creating financial danger for MWG this year. In the
future, these indicators may increase or decrease, but the magnitude of change will not
be large.

2.2.3. Profitability ratios:

Chart 3: Profitability - Time-trend analysis 2018-2022 for

Mobile World Investment Corp in Excel in Excel.

The supplied diagram compares profitability ratios over a five-year period, starting in
2018 and ending in 2022, including net profit margin, operating profit margin, and EBIT
margin. Overall, it is clear that from 2018 to 2021, all of the profitability ratios had a constant
trend, and in 2022, they started to slightly fall. Additionally, as seen in 2021, at 5.81%,
5.26%, and 3.98%, respectively, the EBIT margin, operating profit margin, and net profit
margin held the highest proportions.

As can be seen, over the time displayed, MWG's EBIT margin improved progressively
from 4.88% in 2018 to 5.81% in 2021, demonstrating an improvement in operating profit for
the company. The operating profit of the corporation could not be increasing as much as it did
the year before, as the EBIT margin in 2022 marginally declined to 5.56%. The company has
produced profit before interest and taxes relative to revenue and has well managed costs,
according to MWG's EBIT margin, which has generally been relatively constant. This might
be a message of hope for stakeholders and investors, showing the possibility for sustained
profit growth.

Over the previous five years, MWG's operating profit margin has changed somewhat,
rising from 3.33% in 2018 to 3.75% in 2019, then falling to 3.61% in 2020. The operating
profit margin improved to 3.98% in 2021, suggesting an improvement in the business's

14
operating profit. However, the operating profit margin suddenly fell to 3.07% in 2022,
indicating that the company's operational costs may have gone up and reduced earnings. The
operating profit margin trend for MWG from 2018 to 2022 is not as encouraging as the EBIT
margin trend because it does not demonstrate a steady improvement.

MWG's net profit margin has marginally grown over the last five years, rising from
4.36% in 2018 to 5.26% in 2021, showing an improvement in the company's profitability.
The net profit margin, however, dropped to 4.93% in 2022, potentially as a result of factors
like greater competition or higher operating costs. The upward trend in MWG's net profit
margin demonstrates that the business has been able to turn a profit even after deducting all
costs, such as taxes and interest payments. To preserve long-term profitability, the company
may need to concentrate on cost management and maintaining its competitive position in the
market, as indicated by the minor decline in 2022.

Overall, the investigation led us to the conclusion that MWG's profit margin had
marginally declined from 2021 to 2022. There may be a chance for MWG's profit margin to
keep increasing in the future if the company keeps managing operating costs successfully and
keeps its competitive position in the industry.

We can observe from the trend analysis above that the convergence of changes in D/E,
debt ratio, and TIE ratio occurs in 2022. We can see that MWG is in financial jeopardy this
year due to a significant debt problem, declining EBIT, and declining equity. These indices
may rise or fall in the future, but the change won't be very significant.

2.2.4. Asset management ratios:

15
 Chart 4: Asset Manageement - Time-trend analysis 2018-2022 for
Mobile World Investment Corp in Excel.

In terms of receivables turnover, the period from 2018 to 2020 is a period of strong
growth in this cycle. From 2018 to 2019, MWG's receivables turnover increased sharply from
40 to 60, increasing by nearly 50%. Although growth continued from 2019 to 2020, the rate
was lower than in previous years.Thereby, it can be seen that this is the period when the
collection of receivables at MWG takes place very quickly and gets faster year by year. This
means that MWG has no bad receivables. But since 2021, this rotation has dropped sharply,
or it can be said that in 2020 this rotation peaked, and in the following years this number will
plummet. This will be further reinforced when 2022 is lower than 2021. If this momentum
continues, it is likely that in 2023 this number will continue to fall and MWG will have more
bad debts. If, fortunately, by 2022, this number is already at its lowest, then in the following
years MWG will be lighter in collecting receivables.

In general, MWG's inventory turnover ratio does not fluctuate much. Except for 2019,
when this ratio dropped to 1.0 compared to the previous year, the other ratios over the years
only differed by 0.1 and 0.2. This proves that in the past years, the speed of goods in and out
of the warehouse has been very stable. Following this trend, the company does not have to
worry about an excess or shortage of inventory in the future.

In terms of total asset turnover, it is similar to inventory turnover. Both are quite stable
in the years from 2019 to 2022. Total asset turnover ratios are not much different from year to
year, only between 0.1 and 0.2 over the years. Similar to inventory turnover, because the
fluctuation of total asset turnover is quite stable, the company is likely not to have to worry
about using excess or shorting assets in the future.

Finally, about short-term asset turnover. Unlike the receivables turnover from 2018 to
2020, this is the time when MWG's short-term asset turnover dropped sharply from 2018 to
2019 from 4.1 to 3.5; by 2020, this figure is only 3.0. This number continues to decrease in

16
2021, when it is only 2.75. When this turnover has a continuously decreasing figure, it means
that the management of the problem of using short-term assets has problems. MWG's
liquidity is no longer high, leading to the unsecured payment of short-term debts. But there is
a good sign that in 2022 this figure will increase slightly to 2.76; it can be believed that in
2021 this number has bottomed, and the following years will be the development year of
MWG's receivables turnover.

2.2.5.Management effectiveness ratios:

Chart 5: Manageement Effectiveness - Time-trend analysis 2018-2022 for

Mobile World Investment Corp in Excel.

The provided line chart makes a comparison of management effectiveness ratios,

including ROA, ROE, and ROIC, over a period of 5 years, commencing in 2018 and
culminating in 2022. Overall, a closer glance at the chart reveals that all the measures of
management effectiveness experienced a downward trend. It is also clear that from 2021 to
2022, management effectiveness ratios plunged to a record low in the period shown, standing
at 6.9%, 18.5%, and 13.68%, respectively.

As is observed, in the period shown, ROA of MWG mainly underwent the downtrend.
In 2018 and 2019, ROA stabilized around 11, meaning that with an asset value of 100 VND,
the corporation generated a net profit of 11 VND. In 2020 and 2021, the figure went down by
roughly 18%, to exactly 8.9% and 9% in the order given, showing that the profit generated
from the investment was lower than it had been before. That trend continued in 2022, even
worse. The figure showed that in 2022, the ROA of MWG was just 6.9%, which declined by
well over 30% (as compared to 2020 and 2021) and more than 43% (as compared to 2018 and
2019). That actually gave the investors an idea that the way MWG managed its assets and
converted the money it invested into net income was not as effective as it had been in the
previous years.

17
 ROE matched this trend also, particularly in 2018 and 2019, when the ROE of MWG
stood at 38.7% and 36.3%, reflecting that the corporation managed its equity to generate net
profit very effectively. Let’s assume that in 2018 and 2019, the corporation had equity of 100
VND, at which point it could generate a net profit of 38.7 VND and 36.3 VND, respectively.
That was a very high figure, as we could see in the period shown. However, with respect to
ROE in 2020 and 2021, the figures dove to 28.4% and 27.3%, respectively, showing that the
equity management effectiveness of MWG was not really as good as we had seen so far. Not
only that, in 2022, ROE hit a record low, decreasing by 52 percent, meaning that if the
corporation had equity of 100 VND, at that time they were just making a net profit of 18.2
VND, which was much lower than what the figure showed in 2018.

This trend was also true for ROIC; ROIC reflected how well a corporation managed its
capital to generate profit. It is seen that from 2018 to 2021, the ROIC ratio fundamentally was
in a slight downtrend, ranging from 18.77% to 16.25%. This showed that during that period,
MWG still managed its capital well to make a net profit, even though the figure decreased
slightly yearly. However, in 2022, the ROIC of MWG overcame a major loss of 15.8% (as
compared to the ROIC in 2021), meaning that the capital management actually had some
weaknesses, resulting in a plunge of the ROIC to 13.68% in 2022.

In conclusion, it is easy to perceive that MWG experienced a period in which the

corporation did not manage its investments effectively, resulting in a long-term downtrend in
management effectiveness ratios, particularly a plunge by 2022. This trend will continue in
the future.

2.2.6.Valuation ratios:

Chart 6: Valuation - Time-trend analysis 2018-2022 for

Mobile World Investment Corp in Excel.

The provided diagram makes a comparison of valuation ratios, including P/E, P/B, and
P/S, over a period of five years, commencing in 2018 and culminating in 2022. Overall, it is

18
readily apparent that all the valuation ratios stabilized from 2018 to 2020 prior to rocketing in
2021 and then experiencing a plunge in 2022. Besides that, as is observed, in 2021, P/E, P/B,
and P/S comprised the highest amounts of each, at exactly 19.7; 4.77; and 0.79 in the order
given.

From 2018 to 2020, the P/E of MWG kept intact with the figure standing at roughly 13,
which showed that the valuation of MWG stock experienced a medium valuation period
among investors, but in 2021, it is indicated that the figure went up significantly to 19.7,
meaning that MWG was being highly valued by the investors at that time. However, in 2022,
P/E fell by over 29% to stand at 15.27. In another word, that indicated P/E in 2021 hit the
peak in the period shown, and P/E in 2022 overcame a major loss. For that reason, in 2022, it
was transparent that investors started to undervalue MWG.

P/B kept unchanged at about 4.2 in 2018 and 2019, which showed that the valuation of
MWG stock experienced a medium valuation period among investors, and then went down
quite a lot to 3.48 in 2020, meaning that in this year, instead of spending roughly 4.2 VND to
exchange 1 MWG stock with the book value standing at 1 VND, the investors undervalued
MWG and just agreed to buy 1 for 3.48 VND. However, in 2021, the P/B rocketed to 4.77,
forming the peak in the period shown, but then in 2022, the figure plummeted by up to 45%,
representing just 2.63, showing that investors really undervalued MWG stock when it comes
to P/B. That means the investors just spent 2.63 VND for 1, hitting the lowest number in the
period given.

This situation was also true for the P/S ratio: if, from 2018 to 2020, investors spent 0.45
VND, 0.5 VND, and 0.49 VND, respectively, to buy 1 MWG stock, which generated a sale of
1 VND, after that, in 2021, investors overvalued this stock, accepting to buy 1 for 0.79 VND,
accounting for the highest price. However, P/S matched the general trend, going down to
merely 0.47 in 2022, showing how investors started to not really overvalue this stock relative
to its sales.

From the analysis, in the aggregate, we realized that in 2022, the valuation ratios of
MWG declined rapidly as compared to 2021. Since then, investors have started to undervalue
MWG stock. Actually, that has increased the signal for the constant decrease in the MWG
valuation ratios for years to come. In short, we believe that the valuation ratios over MWG
have experienced a downtrend since 2021 and that this trend will continue in the future.

2.3. MWG Peer Group analysis ( MWG - FRT )

2.3.1. Liquidity ratios:

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 Chart 7: Liquidity - Peer Group Analysis of MWG - FRT in 2022 in Excel.

Overall, in 2022, MWG was more highly valued than its biggest rival (FRT).

In 2022, MWG had a higher current ratio of 1.71, while FRT's ratio was 1.12, indicating
that MWG had a higher proportion of current assets relative to its current liabilities compared
to FRT. Similarly, in 2022, MWG's quick ratio was 0.73, which was roughly 2.1 times higher
than FRT's quick ratio of 0.34. This suggests that MWG had a higher proportion of quick
assets to meet its short-term obligations compared to FRT. As a result, it can be inferred that
MWG exhibited superior liquidity efficiency compared to FRT in 2022.

However, it is important to note that while the current and quick ratios are useful
indicators of liquidity, they do not provide a complete picture of a company's financial health.
Other factors such as operational efficiency, profitability, debt levels, and cash flow should
also be considered when evaluating a company's overall performance and valuation.
Therefore, to draw a more comprehensive conclusion about the relative valuation of MWG
and FRT, these additional factors need to be analyzed. Nevertheless, based on the liquidity
ratios alone, MWG appears to be more favorably valued than FRT in 2022.

2.3.2. Capital Structure ratios:

20
 Chart 8: Capital Structure - Peer Group Analysis of MWG - FRT in 2022 in Excel.

As the information about capital structure mentioned, the capital structure is the index
that shows that the combination of debt and equity contribute to a company's assets and
operations. Each company will have a different capital structure, even companies in the same
industry that are competitors, so that in the overall, we can see that clearly FRT had a
triangular area representing a larger capital structure than MWG but have a different shape of
triangle capital structure between MWG and FRT.

Debt-to-equity in 2022 for MWG and FRT were 1.33 and 4.11, respectively; FRT's
index was 2.87 higher than MWG's. Regarding this indicator, its being much larger than
FRT's MWG is not too important as long as it can be controlled because the two enterprises
have different sizes and different capital use strategies.

It's similar to D/E; in debt ratio, FRT was slightly better than this index with MWG
specifically 0.8 and 0.57.

With the size of MWG and FRT, it is quite different through the indicators of total debt,
total equity, assets... but in terms of the TIE-ratio, there is a problem. The TIE-ratio = EBIT/I,
worth Perhaps the difference between MWG and FRT was very large, but in 2022, the TIE-
ratio of MWG was 5.45 and FRT was 3.1, only a difference of nearly 2.3.

It can be said that in 2022 MWG was somewhat less competitive than FRT in
controlling the TIE. Just relying on the D/E and debt ratios makes it very hard to draw the
conclusion that in 2022 MWG or FRT will use the debt to develop better or related works,
which will require more indexing to analyze and, in the risk analysis part, a thorough
analysis.

2.3.3. Profitability ratios:

21
 Chart 9: Profitability - Peer Group Analysis of MWG - FRT in 2022 in Excel.

Overall, in 2022, it is clear that all profitability ratios of MWG were significantly higher
than those of FRT.

In 2022, the EBIT margin of MWG was 5.56%, while FRT's EBIT margin was 2.38%.
This indicates that MWG had a higher ability to generate profits on revenue compared to FRT
in that year. The operating profit margin of MWG was 4.93%, while FRT's operating profit
margin was 1.57% in that year. This indicates that MWG had a higher ability to generate
profits from its business operations compared to FRT. The figures show that MWG had much
better cost management and business operations ability, with its revenue being much higher
than FRT (roughly 3.13 times higher). The net profit margin of MWG was 3.07%, while the
net profit margin of FRT was 1.29%. This means that the net profit margin of MWG was
about 2.38 times higher than that of FRT. This indicates that MWG was more capable of
generating higher net profits compared to FRT in that year. Moreover, the Gross profit
margin of MWG was 23.13%, while FRT's Gross profit margin was 15.59%. This indicates
that MWG had a higher ability to generate gross profit compared to FRT in that year.

In Short, in 2022, with respect to the comparison over profitability ratios between
MWG and FRT, MWG undoubtedly out-valued FRT and it is clear that investors believed
that MWG was worth investing further than FRT.

2.3.4. Asset management ratios:

22
 Chart 10: Asset Management - Peer Group Analysis of
MWG - FRT in 2022 in Excel.

Regarding asset management of enterprises, it will usually be compared by 4 factors

including: Current Asset Turnover, Inventory Turnover, Receivables Turnover, Total Asset
turnover. Looking at the overall assessment, the area of the chart to evaluate the governance
of MWG and FRT seems to be approximately equal. This shows that the asset management of
the two stable companies is quite similar. Now considering each item separately, the
management of the two companies will be somewhat different. First, for Current Asset
Turnover, this is about how much current assets are used to generate revenue. Therefore, the
higher this ratio, the better the company's current asset management. Looking at the
comparison picture, we can see that FRT has a current asset turnover ratio that is about 1,112
times higher than MWG. It can be said that current asset management FRT is doing better
than MWG. Next is the total asset turnover. Similar to current asset turnover, total asset
turnover measures the efficiency of using total assets to generate revenue. In this ratio, FRT is
also obviously higher than MWG because the management of current turnover of FRT is
higher. But in this ratio MWG is only about 0.79 times lower than FRT. Through two current
asset turnover and total asset turnover, it can be seen that the use of revenue-generating assets
of FRT is more effective than MWG. For the inventory turnover ratio, it shows how long the
inventory management is in stock. Like the above ratio, this number is usually as high as
possible, but it should not be too high because it easily leads to a shortage of goods for the
business. In this section, FRT is still higher than MWG and about 1.19 times higher. It can
also be seen that FRT's inventory management is also better than MWG. Finally, there is the
receivables turnover ratio, which shows how well the business manages its receivables. The
higher this ratio, the better the business manages the collection of receivables. In this section,
MWG is much higher than FRT, 1.86 times higher. This shows that MWG manages the
collection of debts quite well, avoiding causing bad receivables. In general, the asset
management of FRT and MWG is almost the same, but there is not much difference in each
item, so MWG does not have to worry about changing its management to surpass FRT.

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 2.3.5. Management effectiveness ratios:

Chart 11: Management Effectiveness - Peer Group Analysis of

MWG - FRT in 2022 in Excel.

Overall, in 2022, it is clear that the ROA and ROIC of MWG were much higher than
those of FRT, yet the ROE was lower.

In this scenario, the higher ROA and ROIC of MWG compared to FRT (6.9% and
13.68% to 3.67% and 8.37%, respectively) suggests that MWG was generating more profits
with the assets it had. Particularly, concerning ROA, it is clear that MWG could generate a
net profit of 6.9 VND when they had an asset of 100 VND, but for FRT, the number was
merely 3.67 VND, and it was roughly 2 times lower as compared to that of MWG. Similarly,
with respect to ROIC, MWG made up to 13.68 VND with 100 VND of invested capital,
whereas the figure for FRT was humbly at just 8.37 VND, much lower as compared to that of
its rival. In the aggregate, we can conclude that in 2022, MWG was more efficient than FRT
in utilizing its assets to generate profit.

However, the lower ROE of MWG compared to FRT indicates that FRT was generating
more profit per dollar of shareholder investment. In another word, this means that MWG was
not as effective in generating profits for its shareholders. This is evidenced by the fact that in
2022, the ROE of MWG stood at 18.5%, meaning that the corporation could generate a profit
of 18.5 VND with 100 VND of equity, whereas the figure for FRT represented 20.94%,
indicating that with 100 VND of equity, the company generated a 20.94 VND profit, roughly
13% higher.

In short, even though the ROE of MWG was lower than that of FRT, the gap was very
small ( 18.5% versus 20.94% respectively ). Besides that, it was clear that in 2022, the ROA
and ROIC of MWG was much higher as compared to FRT( almost 2 times higher in the order

24
given ). Therefore, in the aggregate, we conclude that in 2022 MWG managed its assets more
effectively as compared to FRT.

2.3.6. Valuation ratios:

Chart 12: Valuation - Peer Group Analysis of

MWG - FRT in 2022 in Excel.

Overall, in 2022 MWG is less valued as compared to its biggest rival ( FRT ).

P/E: in 2022 MWG’s P/E was 15.27, while FRT represented 20.94, meaning that FRT
outperformed MWG relative to its valuation among investors.

P/B: similarly, MWG’s P/B stood at 2,26 whereas this of FRT was roughly 1,8 times
higher, at exactly 4,65, indicating that investors could spend 4.65 VND to buy 1 FRT Book-
value share but only 2.26 VND for 1 MWG Book- value share. Indeed, that was a huge gap,
showing that the valuation over FRT is much higher than MWG .

P/S : By contrast, FRT’s P/S was just around 0,27, but the figure for MWG was up to
0,47. When P/S ratio was lower than its average industry ratio, particularly P/S of FRT, we
had here 2 cases: (1) FRT was underrated and it was therefore worth investing; ( 2) FRT
actually had some weaknesses in terms of its financial or operating performance. Putting the
comparison of P/E, P/B together, it can be concluded that FRT was lean into the former case
mentioned above.

In Short, in 2022, with respect to the comparison over valuation ratios between MWG
and FRT, FRT undoubtedly outvalued MWG and it is clear that investors believed that FRT
was worth investing further than MWG.

25
3. Bankruptcy analysis
Altman's Z-score model is considered one of the most effective bankruptcy prediction
models through five financial ratios from financial information including working capital,
total assets, retained earnings, earnings before interest and taxes (EBIT), market
capitalization, the book value of total debt, and total sales.

Probability of a company going bankrupt:

Altman Z-Score = (1,2 x A) + (1,4 x B) + (3,3 x C) + (0,6 x D) + (0,999 x E)

Bankruptcy Analysis - MWG

Bankruptcy/year 2017 2018 2019 2020 2021 2022
Z1 - 0.19 0.16 0.17 0.15 0.33
Z2 - 0.10 0.09 0.09 0.08 0.07
Z3 - 0.15 0.13 0.13 0.11 0.13
Z4 - 2.01 1.71 1.76 2.27 1.97
Z5 - 3.08 2.45 2.36 1.95 2.39
Z - 5.15 4.23 4.17 3.98 4.51

➢ Safe zone (Z> 2.99): Enterprises located in a safe zone are not in danger of
bankruptcy yet

➢ Gray Zone (1.8< Z < 2.99): Enterprises located in the warning zone may be at risk
of bankruptcy

➢ Hardship Zone (Z<1.8): Enterprises are at high risk of bankruptcy.

In 5 years, the bankruptcy risk of MWG is low (Z is higher than the minimum number
of the safe zone). But it can be seen that the Z-index of MWG tends to decrease. The z-score
decreased from 5.15 in 2018 to 4.23 in 2019, 4.17 in 2020, and continued to decline to 3.98 in
2021. This shows that the business needs to be more cautious in considering their financial
and business issues. However, by 2022, the z-score increased to 4.51, which is approximately
1.13 times higher than the previous year.

If we look more deeply into the Z-index model, we can see that all four indexes Z1, Z2,
Z3, Z4, and Z5 have the participation of total assets, reducing these indexes while in the
financial statements. MWG's total assets increase year by year, so the Z-index tends to
decrease naturally. Therefore, MWG needs to review which assets are not necessary for
business and gradually liquidate those assets to reduce total assets (related to Z5) and also
have more cash to increase working capital. company action. If possible, MWG should
reduce long-term assets because short-term assets contribute to increasing the value of Z1.

To increase Z2, MWG can increase the company's retained earnings by reducing
dividends to shareholders. However, it is not advisable to reduce the dividend too much
because doing so will inadvertently make Z4 decrease.

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 Bankruptcy Analysis - FRT
Bankruptcy/year 2017 2018 2019 2020 2021 2022
Z1 - 0.16 0.13 0.15 0.10 0.10
Z2 - 0.07 0.03 0.00 0.04 0.04
Z3 - 0.10 0.06 0.03 0.02 0.07
Z4 - 1.26 0.32 0.61 0.87 0.97
Z5 - 2.96 2.52 2.72 2.09 2.88
Z - 4.33 3.12 3.35 2.84 3.86

Similar to MWG, the Z-score of FRT decreased over the course of 4 years (2018-2021)
and increased again in 2022, with values of 4.33, 3.12, 3.35, 2.84, and 3.86, respectively.
However, by 2021, FRT's Z-score was 2.84 in the gray zone (1.8< Z < 2.99), indicating that
FRT is in a warning area with a risk of bankruptcy, while MWG's Z-score was 3.98 in the
safe zone (Z> 2.99), this means that the bankruptcy risk of MWG is low. This suggests that
FRT needs to take more cautious measures in considering its financial and business issues.

4. Risk analysis
Risk can be evaluated by the microenvironment and macroenvironment. Let's start with
the microenvironment, specifically some financial ratios, that can get through the aspect of
the financial risk of the company.

MWG

Financial risk / Year 2017 2018 2019 2020 2021 2022

Debt-to-Equity(D/E) Ratio - 2,13 2,43 1,97 2,09 1,33

FRT
Financial risk / Year 2017 2018 2019 2020 2021 2022

Debt-to-Equity(D/E) Ratio - 3,46 4,15 3,40 5,42 4,11

Starting with the increase and decrease of the debt-to-equity ratio over the years of
MWG, this ratio has been kept stable near the number 2, specifically in 2018 this index was
2.13 in 2019 and 2.43 next. 2020 1.97 was the ratio of total debt to total equity of MWG, but
the difference of the analysis over the years is that in 2022 this index decreased to 1.33,
looking back a bit at the nature of this index, the ratio The total debt to equity ratio shows
how dependent on debt the company is. The reason for this decrease is that MWG's debt has
decreased this year but owner's equity is still normal. The higher this number, the greater the
financial risk of the company, but once this number is abnormally reduced, it is also possible
that the company is not making optimal use of capital to expand its operations.Regarding this
D/E reduction, it can also be said that MWG is carrying out a debt restructuring campaign,

27
transferring a part of short-term debt from banks and bonds to long-term debt, the purpose is
to reduce financial pressure in the future. a short period of time during periods of high-
interest rates. but in this index total debt is very important but let's make it more clear by
separating long-term debt to look at the company. Many opinions often say that short-term
debt is very dangerous but it is somewhat less dangerous than long-term debt because
corporations will manage to pay it in a year. But about long-term debt, more than one year is
the time for businesses to pay, interest costs will be accompanied by a long time, especially
the current inflation situation. Below is the value of long-term debt of MWG over the years.

Balance Sheet - MWG 2017 2018 2019 2020 2021 2022

II. Non-current
1.199.933 1.210.063 1.122.137 1.126.677 0 5.901.250
liabilities

5,901,250 million is a number worth seeing after the stability that MWG creates.

Looking at FRT's competitors, this company's D/E ratio is higher than MWG's but the
stability has been shown over the past 5 years. 2020 is a difficult year for businesses due to
the epidemic situation, but a little bit about MWG's indicators in these years Debt-to-asset
ratio has remained very stable as shown by the increasing total assets and total liabilities
while FRT failed to do so, it can be seen that MWG handled the risks in 2020 very well,
indicators such as Interest coverage and Net profit margin are 10.11 and 3.61% respectively.

Why MWG handled the risk well in 2020, look at the Interest coverage is 10.11, Interest
coverage is the index that equals EBIT/I from the number 10.11 can assume that in that time
the stables also stayed through the covid pandemic when the risk, the uncontrollable has
existed. Continue with the Net profit margin the index equals Net profit attributable to parent
company shareholders divided Net sales revenues and show that the business is enough to
generate retained earnings for the company, in some cases in corporate resources where these
retained earnings are not enough to manage the company will start issuing bonds, and form
scandals in bonds…
MWG
Interest Coverage - 9,68 9,89 10,11 10,60 5,45
Net profit margin - 3,33% 3,75% 3,61% 3,98% 3,07%

According to Tuoi Tre newspaper, MWG Group ended the first 11 months of 2020 with
net revenue of VND 99,304 billion and completed 90% of the revenue plan, but with a
reduction in the target because 2020 was a difficult year. 2020 was a year where most
businesses "shrunk" but MWG stretched and succeeded.

Also shows this, while competitor FRT is somewhat underwhelming in risk

management and business in 2020, specifically, FRT's Net profit margin index decreased by
more than 7 times compared to last year.

FRT

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Net profit margin - 2,27% 1,28% 0,17% 1,97% 1,29%

The Debt-to-asset ratio figures of MWG have remained stable over the years but have
changed in nature.

Risk analysis - MWG

Financial risk / Year 2017 2018 2019 2020 2021 2022

Debt-to-asset ratio - 0,68 0,71 0,66 0,68 0,57

Risk analysis - FRT

Financial risk / Year 2017 2018 2019 2020 2021 2022

Debt-to-asset ratio - 0,78 0,81 0,77 0,84 0,80

The change in nature comes from 2022, the risk is partly reflected here, the components
that make up the Debt-to-Asset ratio, which are total assets and total liabilities, both increase
in the years 2018 to 2021 but In 2022, these two components will decrease together. In the
matter of debt, it is often said that MWG's short-term debt accounts for too much of a
company's short-term debt, but MWG's business is to borrow debt at low-interest rate and
lend it back at a higher interest rate is The benefits of MWG and the reason for short-term
debt are too much. Here is some information about MWG's business in 2022.

According to Tien Phong Vietnam Newspaper, TGDD has cut more than 7,000 of its
employees within 3 months, the total loss of BHX chain stores is 7200 billion VND, An
Khang pharmacy is also a loss.

According to Investment Newspaper, MWG failed to fulfill the revenue plan, achieving
64.6% of revenue, with business not as planned and the amount of additional debt, especially
long-term debt incurred a lot. Take a look at MWG's debt solvency and quick ratio Which
index shows the in the short term whether the corporation can afford to meet its payment
obligations (current assets minus inventory and divided by current liabilities).

Risk analysis - MWG

Financial risk / Year 2017 2018 2019 2020 2021 2022

Quick ratio - 0,33 0,33 0,61 0,54 0,73

Interest Coverage - 9,68 9,89 10,11 10,60 5,45

Risk analysis - FRT

Financial risk / Year 2017 2018 2019 2020 2021 2022

Quick ratio - 0,58 0,53 0,75 0,58 0,34

Interest Coverage - 5,54 3,06 1,25 1,42 3,10

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 In 2022, MWG's Interest Coverage decreased very sharply, almost 2 times compared to
2021 and previous years, the reason was that interest expenses increased but profit before tax
and interest decreased.The reason must be partly from the slowdown in retail sales and rising
inflation, the financial risk shown in this number is very clear.With the current quick ratio,
MWG is still safe because for large enterprises these indicators are very important, so keeping
it stable is inevitable. One more important indicator to assess corporate financial risk is the
Degree of combined leverage ratio, which shows both financial strength and good corporate
performance (Δ%EPS/Δ%SALES) below. data about this indicator.

It is easy to see that 2022 is not a good year of MWG with an index of -18.286%, the
reason why this index is negative and large is due to the relatively large change of EPS in
2022, which can be inferred from Reducing MWG's EPS in 2022 is a high risk of investing in
the company's shares at this time, because EPS partly assesses the company's performance
through this index can see the difficulty of MWG.

Risk analysis - MWG

Financial risk / Year 2017 2018 2019 2020 2021 2022

Degree of combined
- -1,648 1,599 -0,403 0,204 -18,286
leverage ratio

Risk analysis - FRT

Financial risk / Year 2017 2018 2019 2020 2021 2022

Degree of combined
- -1,649 -10,553 62,098 2,712 -1,785
leverage ratio

A quite volatile figure during this time, but looking back at the industry and macro
issues: through MWG's financial statements over the past year. 5 years seems to be a
saturated period for MWG in particular and the retail industry in general, there is a lot of
competition from online stores, inflation is happening and people are reducing spending on
non-essential issues. Therefore, MWG will still face many difficulties in 2023, some major
financial activities related to MWG may take place related to the issue of stock offering of
BHX , BHX is acquired to overcome the current difficulties.

5. Growth analysis
MWG
2017 2018 2019 2020 2021 2022
EBIT 3,042,514 4,222,736 5,621,584 6,003,739 7,146,012 7,418,499
NOPAT 2,349,665 3,181,263 4,232,884 4,229,815 5,342,857 5,222,234
SGR 53.81% 47.10% 34.81% 34.49% 25.61%

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Sale growth rate - 29.60% 17.95% 6.10% 13.06% 8.52%
Profit margin
- 30.51% 33.19% 2.18% 25.04% -16.31%
rate
CAGR 12.35%

FRT
2017 2018 2019 2020 2021 2022
EBIT 442,025 530,446 413,186 142,109 187,643 717,151
NOPAT 352,912 424,268 312,304 4,759 -178,490 589,135
SGR 53.27% 28.16% 0.90% -14.56% 34.40%
Sale growth rate - 15.18% 6.92% -12.88% 52.83% 33.85%
Profit margin rate - -38.75% -88.40% 1695.10% -12.03%
CAGR 16.37%

NOPAT × Ratio Retained Earnings

Sustainable Growth Rate (SGR) = × 100
Equity at the beginning of the year

“Sustainable growth rate” reflects whether the profit after tax is retained every year to
supplement equity. Enterprises are considered to have stable and sustainable growth when the
value of the indicator "sustainable growth rate" is high and gradually increases (or stabilizes)
over time. This means that the enterprise has an annual growth in equity based on business
results (additional profit after tax) and not from other sources (issuance of shares, additional
capital contribution, etc.). MWG's SGR has been decreasing year after year. This is also
concerning. If this tendency continues, the company may go out of business. Since 2018,
when MWG had a good SGR (53.81%), this statistic has decreased to 30% in only 4 years,
and MWG's SGR is only 25.61% in 2022. At this rate, MWG's SGR may be negative in the
next 2 to 3 years, which is exceedingly worrisome. From 2018 to 2021, we can clearly see
that FRT's SGR is declining, dropping from a rather high level of 53.27% in 2018 to merely -
14.56% in 2021. In just three years, the FRT sustainable growth index has dropped by
67.83%, which is a concerning trend. Nonetheless, the SGR index grew to 34.4% in 2022,
which is a very stable sign but still causes investors concern. It can be observed that the FRT
SGR index has been highly volatile over the years, moving up and down wildly.

The sustainable growth rate of enterprises depends mainly on the revenue growth rate
and the profit growth rate. Therefore, in addition to considering the sustainable growth rate,
analysts also consider the following criteria:

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 ● Sales Growth Rate:

The Sales Growth Rate reflects the increase in net revenue of a business over time is
high or low.
Total Revenue∈ year −Total Revenue last year
Sale Growth Rate = × 100
Total Revenue last year

By looking at the variation over time of the net sales growth rate, the user of the
information can assess the stability in terms of size and consumption market, business status
(favorable, or difficult), business scale (expansion, income), as well as the development trend
of the business. The sales growth rates of both MWG and FRT display a substantial negative
trend from 2018 to 2020. The sales growth rate for MWG fell by 23.5% (from 29.6% to
6.1%). FRT is not faring much better, falling 28.06% (from 15.18% to -12.88%). Both MWG
and FRT's sales growth rates will rise in 2021. The MWG index only climbed by around 6%,
while the FRT index increased by about 65.71%, which is an exceptionally outstanding
figure. However, by 2022, both MWG and FRT's sales growth rates will be cut in half
compared to 2021. MWG fell from 13.06% to 8.52%, while FRT fell from 52.83% to 8.52%.
33.85%. In other words, both MWG and FRT's sales peaked in 2021, and at this rate, 2023
will be a year of a sharp fall in growth for both companies.

● Profit Growth Rate:

Total Profit∈ year −Total Profit last year

Profit Growth Rate = × 100
Total Profit last year

By considering the profit growth rate, information users can recognize the quality of
business activities, the quality of cost management, the current business status, etc. of the
enterprise.

A general assessment of the growth rate of enterprises is done by combining the

comparison tool with the graph tool (chart): Compare the values of the indicators reflecting
the sustainable growth rate, speed profit growth, and net sales growth to look at volatility, and
use graphs (or charts) to reflect the change in growth over time.

From 2018 to 2019, MWG's profit growth rate improved marginally by 3%.
Nevertheless, it fell dramatically in 2020, going from 33.19% to just 2.18%. Thankfully, in
2021, this figure had increased significantly, but the good news was fleeting; in 2022, this
number fell to -16.31%. For MWG, this figure was quite worrying. Unlike MWG, FRT
experienced exponential growth of more than 1000% in 2021 after allowing its profit growth
rate to bottom out in 2020. Then, just like MWG in 2022, FRT likewise met the same demise
in regards to MWG. negative expansion. Looking at the earnings growth of both companies,
we see that the slowdown and decline is a trend, not just the way each company is
performing.

Ending Value N1
CAGR =( ) -1
Starting Value

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 It is used to describe the growth over a period of some business element, e.g. revenue,
suppliers, registered users. Overall, between 2017 and 2022, both companies have positive
CAGRs. This shows that both companies are having stable revenue growth that is not yet
alarming.

6. Dupont
Dupont - MWG
Ratios/ year 2017 2018 2019 2020 2021 2022
ROE - 38.7% 36.3% 28.4% 27.3% 18.5%
Net profit margin - 3.33% 3.75% 3.61% 3.98% 3.07%
Total assets turnover - 3.40 2.93 2.47 2.26 2.25
Financial Leverage - 3.42 3.31 3.18 3.04 2.68

Chart 13: Dupon 2018-2022 for

Mobile World Investment Corp in Excel.

Dupont is a method used to evaluate ROE- Return on Equity and the indicators that
make up ROE from a multi-faceted perspective. In general, MWG's ROE has decreased
gradually over the years from 2018 to 2022, respectively. was 38.7% ,36.3%, 28.4, 27.3 and
the index in 2022 was 18.5%, as the above analysis Net profit margin, Total assets turnover ,
Financial Leverage all tended to decrease over the years, thus leading to Falling ROE, profit
reduction of subsidiaries, reduction of personnel, downsizing of business establishments
partly affected MWG's ROE in 2022, which was probably the saturation phase of MWG. But
reducing debt ratio, changing capital structure, and shrinking business facilities also help

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 MWG overcome the general difficult situation ahead. In 2023, perhaps MWG will partly
handle difficulty.

7. Intrinsic Value

MWG
2017 2018 2019 2020 2021 2022
Depreciation 682,173 1,086,551 1,289,774 1,922,815 2,724,140 2,768,050
OCF 3,084,943 4,375,450 5,663,005 6,328,140 8,237,176 8,393,550
Capital Expenditure 1,877,285 3,235,436 3,940,262 5,026,641 3,008,391
NWC 3,149,046 5,442,562 6,569,530 7,894,721 9,362,099 18,577,343
FCF 204,649 1,300,601 1,062,687 1,743,157 -3,830,085

MWG
2017 2018 2019 2020 2021 2022
Depreciation -126,048 590,177 740,941 720,218 1,093,874 1,473,858
OCF 242,781 1,033,595 1,086,251 834,852 1,173,392 2,104,322
Capital Expenditure 231,803 1,157,951 727,263 1,230,432 1,952,041
NWC 434,556 806,367 865,109 797,551 1,115,224 1,007,111
FCF 429,981 -130,442 175,147 -374,713 260,394

MWG
2017 2018 2019 2020 2021 2022
Debt Cost 3.43% 6.20% 4.00% 3.55% 2.74% 8.20%
ROE - 38.66% 36.30% 28.36% 27.32% 18.50%
Equity 5,908,916 8,983,035 12,143,592 15,481,690 20,378,246 23,932,582
Debts 6,798,892 7,038,984 14,203,425 16,732,507 24,614,161 16,611,512
Tax 22.77% 24.66% 24.70% 29.55% 25.23% 29.61%
WACC - 23.73% 18.35% 14.93% 13.50% 13.29%

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Share outstanding - 443,126,893 442,689,942 452,605,894 712,833,495 1,463,376,716
EPS - 6,689 8,665 8,654 6,897 2,810
P/E - 0.08 0.07 0.05 0.04 0.04
Intrinsic Value - 661.40 689.80 521.18 335.25 135.90

FRT
2017 2018 2019 2020 2021 2022
Debt Cost 1.69% 1.37% 1.71% 0.89% 0.66% 1.86%
ROE 35.57% 17.47% 1.97% 30.56% 20.94%
Equity 796,454 1,158,767 1,279,363 1,225,130 1,679,274 2,049,336
Debts 4,671,657 6,983,285 7,905,439 12,773,258 20,034,697 12,447,742
Tax 20.16% 20.02% 24.42% 96.65% 195.12% 17.85%
WACC 1.15% 6.00% 3.55% 0.20% 1.78% 4.27%
Share outstanding - 68,000,000 78,981,792 78,981,792 78,981,792 118,472,535
EPS - 5114 2697 266 5618 3295
P/E - 0.29 0.17 0.07 0.04 0.00
Intrinsic Value - 1,568.54 469.61 18.09 225.98 8.10

The more free cash flow a corporation has, the better because this is the cash flow that
may be used to pay dividends and creditors. Free cash flow was extremely high for MWG
from 2018 to 2021; from that year to the next, it climbed by around 6 times. The sum climbed
again in 2021, approximately 35% greater than the entire year of 2019, after a minor decline
in 2020. However, this cash flow was negative in 2022, which meant that MWG lacked the
funds necessary to pay its creditors and shareholders. This had a devastating impact on the
company's underlying worth in the perspective of shareholders and creditors. For FRT, free
cash flow fluctuates quite erratically. From 2018 to 2019, free cash flow decreased by 130%.
But from 2019 to 2020, the increase is about 234%. Then in 2021, it dropped to 314% again.
By 2022, this number will increase to about 170%. The fact that the company's free cash flow
fluctuates continuously with the numbers increasing each year quite a lot, showing that the
company cannot guarantee the payment of debt and dividends to shareholders. This also
makes the company's value in the eyes of people become quite reduced.

The intrinsic value of the company represents the value of the company in the eyes of
investors, the higher this number, the easier the company is to be noticed by investors.
MWG's intrinsic value increased slightly from about 2018 to 2019. After that, the company's
value decreased continuously from year to year from 2020 to 2022. At 2022, the intrinsic
value of MWG is only about 1/5 times compared to the previous year. 2019 this. If this
continues, investors will give up their investment in MWG, which may make MWG difficult
in the long run. FRT is not much better than MWG. Just from 2018 to 2020, the intrinsic
value of the company has decreased by about 86 times. Fortunately in 2020 this number
increases slightly to about 12 times. But by 2022, it will continue to decrease by about 27
times, the intrinsic value of FRT is now even lower than in 2020. FRT is now more alarming

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than MWG, when the intrinsic value of FRT at this time is quite low. and greatly reduced. If
only MWG or FRT is selected, then MWG will be selected more because the intrinsic value
of the current MWG is higher than FRT.

8. Limitation
Although my team has tried to provide the necessary information for the financial report,
there are still some limitations:
- Quality of Underlying Data (are not foolproof)
- The resources of the team are insufficient (such as money,...)
- Reliance on historical data: Financial analysis is based on past financial data, which
may not accurately reflect future performance. Market conditions, economic trends,
and other external factors can change rapidly and have a significant impact on a
company’s financial results.
- Limited information: Financial statements only provide a limited amount of
information about a company’s operations and financial performance.
- Assumptions and subjectivity: Financial analysis often involves making assumptions
and interpretations, which can introduce subjectivity into the process.
- Does not consider future events: Financial analysis is backward-looking and does not
take into account future events, the prediction of future results is only relative.

9. References
1. Website of Mobile World Investment Corporation (MWG) - https://mwg.vn.
2. Tienphong.vn - "Thế giới di động sa thải hơn 7.000 nhân viên".
3. Baodautu.vn - "Dragon Capital bán ra 5,3 triệu cổ phiếu MWG khi Công ty bắt đầu tăng
trưởng âm".
4. Website of FPT - https://fpt.com.vn/vi.
5. Rong Viet Security - Báo cáo tài chính các năm của MWG
6. Definitions of financial ratios from Investopedia - https://www.investopedia.com
7. KB Securities VietNam - "Groceries and consumer electronics stores - the main growth
force" - (Dao Phuc Phuong Dung - Analyst).

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