Financial Ratio Analyzing

1. Liquidity Ratios

Unit 2021 2022 2023 Q1 2024

Current ratio time 0,31 0,68 0,35 0,29
Quick ratio time 0.23 0.35 0.14 0,02
Cash ratio time 0.03 0.08 0.04 0,01

1.2

0.8
Cash ratio
0.6
Quick ratio
Current ratio
0.4

0.2

0
2021 2022 2023 Q1 2024

In general, VinFast's liquidity ratios have been trending downward from 2021 to Q1 2024. This
indicates that VinFast's ability to pay its short-term debts has been weakening over time.

In 2021-2022 period, Vinfast’s liquidity ratios increased, specifically the current ratio increased
from 0.31 to 0.68; quick ratio increased from 0.23 to 0.35; cash ratio increased from 0.03 to 0.08.
The 21.2% revenue growth indicates that VinFast sold more cars in 2021 than in 2020. This led
to an increase in the company's current assets, including cash, inventory, and accounts
receivable. Revenue growth also helped the company improve its ability to collect receivables,
which contributed to an increase in liquidity ratios.

In 2022 - Q1 2024 period, the current ratio has decreased from 0.68 to 0.29, the quick ratio has
decreased from 0.35 to 0.02, and the cash ratio has decreased from 0.08 to 0.01. There are a few
possible reasons for the decline in VinFast's liquidity:

- Slow revenue growth: VinFast's revenue has been growing more slowly than its short-
term debt. This has left the company with less current assets to pay off its short-term
liabilities. VinFast's net losses of 32,219.0 billion VND, 49,848.9 billion VND and
57,471.7 billion in 2021, 2022 and 2023.
- Inventory growth: VinFast's inventory has grown rapidly from 2021 to Q1 2024. This has
also left the company with less current assets to pay off its short-term liabilities.
 - Operating expense growth: VinFast's operating expenses have grown rapidly from 2021
to Q1 2024. In the period 2022-2023, cash flow used in business activities increases from
35,628.4 billion to 53,649.4 billion VND as VinFast expands the production scale of new
product lines and expands the market. This has left the company with less cash on hand
to pay off its short-term liabilities.

The table below presents the liquidity ratios of TMT Motors for the period 2021-Q1 2024.

Uni
TMT Motors 2021 2022 2023 Q1 2024
t
Current ratio time 1,05 1,02 1,06 1,04
Quick ratio time 0,28 0,19 0,16 0,19
Cash ratio time 0,01 0,01 0,02 0,03

TMT Motors' liquidity ratios are relatively stable. The current ratio ranges from 1.02 to 1.06, the
quick ratio ranges from 0.19 to 0.28, and the cash ratio ranges from 0.01 to 0.03. TMT Motors
maintains a liquidity index above 1, while VinFast's indexes are below 1. Based on the above
analysis, it can be seen that VinFast's liquidity ratios in this period are declining compared to
other businesses industry in the same industry, specifically here is TMT Motors.

2. Profitability Ratios

Unit 2021 2022 2023 Q1 2024

ROA % -38% -44% -44% -10%
ROE % 42% 44% 40% 9%
50%

40%

30%

20%

10%
ROA
0%
ROE
2021 2022 2023 Q1 2024
-10%

-20%

-30%

-40%

-50%
VinFast's ROA experienced a downward trend from -38% in 2021 to -44% in 2022. VinFast's
total assets witnessed a significant increase from 85,321,456,000 VND in 2021 to
113,605,299,000 VND in 2022. This growth was primarily driven by investments in fixed assets,
including new manufacturing facilities and production lines. While total assets were on the rise,
VinFast's net income experienced a downward trend. In 2022, the company recorded a net loss of
49,848,900,000 VND, compared to a net loss of 32,219,000,000 VND in 2021. ROA is
calculated by dividing net income by total assets. As net income declined and total assets
increased, VinFast's ROA consequently deteriorated. The decline in VinFast's ROA from 2021 to
2022 can be attributed to the combined effects of increasing total assets, declining net income,
and the company's continued investments in fixed assets, R&D, and technological advancements.
While these investments are crucial for VinFast's long-term growth, they have also impacted the
company's short-term profitability. In 2023- Q1 2024 period, ROA increased from -44% to -
10%. VinFast's revenue in 2023 has improved with 28,712,100,000 VND, an increase of 91%
when the manufacturer delivered electric cars 5 times more than in 2022. Although still at a loss,
VinFast's gross profit margin improved, from negative 82% in 2022. down to negative 46% in
2023. Gross profit margin in the last quarter of last year alone was negative more than 40%.

VinFast's ROE has experienced some fluctuations during the period of 2021 to Q1 2024. In 2021
and 2022, VinFast's ROE recorded a slight increase from 42% to 44%. This indicates that the
company's ability to generate profits from shareholder equity has improved. But in 2023, ROE
decreased to 40%. This decline could be related to two factors: strong revenue growth (91%
compared to 2022) may have led to an increase in shareholder equity, but net income has not
kept pace with this growth and investments in production expansion or research and
development may have impacted net income in the short term. In Q1 2024, ROE decreased to
9% because total equity decreased from -143,377,986,000 VND to -157,354,547,000 VND while
net income increased slightly from -57,101,541,000 VND to -14,819,204,000 VND.

The table below presents the Profitability ratios of TMT Motors for the period 2021-Q1 2024.

TMT Motors Unit 2021 2022 2023 Q1 2024

ROA % 1.71 1.46 0.1 0.01
ROE % 9.44 10.8 0.65 0.06

When compared to its industry peer (TMT Motors), TMT Motors' ROA has exhibited a
downward trend from 1.71% to 0.01% between 2021 and Q1 2024, while its ROE showed a
slight increase from 9.44% to 10.80% during the same period, followed by a sharp decline to
0.65% and 0.06% in 2023 and Q1 2024, respectively. Notably, VinFast's ROE surpassed TMT
Motors' ROE during 2021-2022, indicating its ability to generate higher profits per unit of
shareholder equity. However, VinFast's ROE experienced a decline in 2023 and Q1 2024, while
TMT Motors' ROE witnessed a steeper drop. TMT Motors maintained positive ROA throughout
the period, while VinFast's ROA remained negative. This suggests that TMT Motors was able to
generate profits from its total assets, while VinFast still struggled to do so. Nevertheless, TMT
Motors' ROA displayed a declining trend, whereas VinFast's ROA showed signs of
improvement.

3. Debt Management

Unit 2021 2022 2023 Q1 2024

Long Term Debt to
% -41% -36% -21% -
Equity
Total Debt to Equity % -61% -49% -50% -

0%
2021 2022 2023
-10%

-20%

-30%
Long Term Debt to Equity
Total Debt to Equity
-40%

-50%

-60%

-70%

The table below presents the Debt ratios of TMT Motors for the period 2021-Q1 2024.

Uni
TMT Motors 2021 2022 2023 Q1 2024
t
Total Debt to
% 580.19 705.07 396 -
Equity

The long-term debt to equity ratio measures the proportion of a company's long-term debt to its
shareholders' equity. A higher ratio indicates a greater reliance on debt financing. VinFast's long-
term debt to equity ratio has consistently been negative throughout the period, implying that the
company has more shareholders' equity than long-term debt. This is a positive sign, reflecting
VinFast's primary reliance on shareholder investments rather than excessive debt. However, it's
important to note the gradual improvement in the ratio from -41% in 2021 to -21% in 2023. This
trend suggests a decreasing debt burden relative to shareholder equity. In contrast, TMT Motors
exhibits significantly higher long-term debt to equity ratios, indicating a substantial reliance on
debt financing. This raises concerns about the company's ability to manage its debt obligations.
The total debt to equity ratio is similar to the long-term debt to equity ratio but encompasses all
forms of debt, not just long-term debt. It provides a broader picture of a company's overall debt
burden. VinFast's total debt to equity ratio, like the long-term debt to equity ratio, has
consistently been negative, indicating that the company has more shareholders' equity than total
debt. This reinforces VinFast's conservative debt financing approach. The total debt to equity
ratio's improvement from -61% in 2021 to -50% in 2023 suggests a decreasing overall debt
burden relative to shareholder equity. TMT Motors' total debt to equity ratios mirror the long-
term debt to equity ratios, highlighting the company's substantial reliance on debt financing.

VinFast's debt ratios have consistently improved throughout the period, demonstrating a
decreasing reliance on debt financing and a growing emphasis on shareholder investments. In
contrast, TMT Motors exhibits significantly higher debt ratios, raising concerns about its ability
to manage its debt obligations. VinFast's financial disclosures indicate a focus on reducing debt
and improving its financial health. This strategy, combined with its improving debt ratios,
positions VinFast favorably for long-term financial sustainability.

4. Market value ratios

Unit Q4 2023 Q1 2024

EPS USD -$0.23 -$0.26
P/E ratio time -36.9 -18.86

P/E ratio
0
Q4 2023 Q1 2024
-5

-10

-15 P/E ratio

-20

-25

-30

-35

-40

The table below presents the Market value ratios of TMT Motors for the period Q4 2023 -Q1
2024.

TMT Motors Unit Q4 2023 2024

EPS USD $0.00173 -$0.00019
P/E ratio time 373.64 -2,608.69

According to a report by SSI Securities Company, the Automobile industry stock price index
decreased by 4% over the same period last year, while the VNIndex index recorded an
impressive growth of 12%. The main reason for this decline is believed to be the weak
purchasing power of consumers in a difficult economic context. Although the Government and
distributors have implemented many measures to support demand, car and motorbike sales still
do not achieve positive results. The decline in sales has negatively affected the business results
of companies in the Automobile industry, leading to investors' psychology of selling off stocks.
Specifically, VinFast announced a net loss in Q4 2023 of -638,936 USD, an increase of 3.4%
compared to the previous quarter. This affected VinFast's market indexes, causing the EPS index
to drop to -$0.23 and the P/E ratio to -36.9 times. VinFast's P/E index during this period is quite
low compared to other businesses in the same industry, specifically TMT Motors. In Q4 2023,
the company's P/E index is quite high at 373.64 times as a result of TMT Motors Company
attracting the attention of investors thanks to the potential cooperation prospect with the joint
venture GM-SAIC- Wuling in assembling low-cost electric vehicles from China in the
Vietnamese market. Although the market index at the end of 2023 is not really good, at the
meeting announcing business results for the fourth quarter of 2023, VinFast Auto Chairman -
Ms. Le Thi Thu Thuy - expressed her expectations for the company's gross profit margin. will
reach a positive level by the end of 2024 and continue to improve in 2025.

In Q1 2024, VinFast's business activities improved with an increase in electric vehicle sales to
the market by 444%, revenue increased by 269.7% compared to the same period in 2023 as the
company implemented its strategy to expand its sales agent network in the US. The above
positive signals have helped improve the market index, the P/E index was more positive when it
increased from -36.9 times to -18.86 times. However, the EPS ratio decreased slightly from -
$0.23 to -$0.26 due to the decline in the number of outstanding shares (2,816,575 shares in Q4
2023 to 2,266,368 shares in Q1 2024). VinFast's market indexes in Q1 2024 are more positive
than TMT Motors. TMT Motors' P/E index dropped sharply to -2,608.69 times, earnings per
share also dropped to negative levels. 2024 is a challenging year for the Vietnamese automobile
market. According to a report by the Vietnam Automobile Manufacturers Association (VAMA),
sales of member businesses continuously decline due to weak consumer demand. However,
many experts have predicted that the auto market will recover in the second half of the year
when loan interest rates cool down, input material prices stabilize and new car models are
launched.

5. Efficiency ratios (Turnover ratio)

Unit 2021 2022 2023 Q1 2024

Total Asset
time 0.19 0.13 0.22 -
Turnover
 Total Asset Turnover
0.25

0.2

0.15
Total Asset Turnover

0.1

0.05

0
2021 2022 2023

The table below presents the Total Asset Turnover ratios of TMT Motors for the period 2021-Q1
2024.

Uni
TMT Motors 2021 2022 2023 Q1 2024
t
Total Asset
time 1.05 0.91 0.93 -
Turnover

Total asset turnover ratio (total assets revenue) is the comparison ratio between total revenue and
average total assets of a business. It can be understood that 1 VND of VinFast's assets can
generate 0.19 VND in 2021, decreasing slightly to 0.13 in 2022, however it can be seen that this
coefficient has gradually increased over time and reached 0.22 by 2023.

The decrease in the total asset turnover ratio in 2022 was primarily attributed to a decline in
profits from 16,028,200,000 VND in 2021 to 14,965,600,000 VND in 2022. VinFast's
operational efficiency during the 2021-2022 period remained relatively stagnant as the company
focused on research and development of new products. TMT Motors also experienced a similar
trend during this period, with its total asset turnover ratio dropping from 1.05 to 0.91. Overall,
2022 presented significant challenges for the Vietnamese commercial vehicle market,
characterized by rising domestic fuel prices, stricter credit restrictions by banks, and peak
interest rates since Q2 2022, which hindered investment in truck purchases.
VinFast's business operations witnessed a remarkable turnaround in 2023, marked by several
milestones, most notably its successful listing on the US stock exchange. This positive
momentum resulted in a substantial increase in revenue from 14,965,600,000 VND in 2022 to
28,712,100,000 VND in 2023. Throughout 2023, VinFast accelerated its growth trajectory
through a multifaceted strategy encompassing the transformation and expansion of its global
retail network, product diversification, and enhanced production capabilities, laying a solid
foundation for 2024 and long-term development goals. These strategic initiatives directly
contributed to the improvement of the total asset turnover ratio.

Conclusion

VinFast's financial ratios reveal a company navigating a dynamic and challenging market
environment. While liquidity ratios indicate a need for improved short-term debt management,
positive developments in profitability metrics like ROA and a conservative debt financing
approach paint a picture of a company with long-term potential.

VinFast's liquidity ratios have been declining, highlighting the need for strategies to manage
short-term debt more effectively. ROA has shown signs of improvement, indicating a growing
ability to generate profits from total assets. Although still negative, VinFast's ROE surpassed
TMT Motors' during 2021-2022, reflecting higher profitability per unit of shareholder equity.
VinFast exhibits a clear focus on reducing debt and improving its financial health, as evidenced
by consistently negative debt-to-equity ratios throughout the analyzed period. Market value
ratios like P/E ratio show improvement in Q1 2024 compared to Q4 2023, reflecting a more
positive investor outlook. The total asset turnover ratio experienced a significant increase in
2023, suggesting improved efficiency in utilizing assets to generate revenue.

The Vietnamese automotive market faces headwinds in 2024, but VinFast's recent performance
suggests a company well-positioned to capitalize on potential recovery. Continued focus on debt
management, operational efficiency improvements, and strategic expansion plans will be crucial
for VinFast to achieve long-term financial sustainability and solidify its position in the
Vietnamese and global automotive landscape.