Group Assignment

FIN202

Công ty cổ phần chăn nuôi

C.P. Việt Nam
Part 1: Introduction
1. Introduce:
Vietnam Livestock Corporation was established under Decision No.
862/NN-TCCB/QD dated June 21, 1996 on the basis of organizing and
rearranging businesses with close economic, industrial, and trade,
information, science and technology, research, ... operating in the field of
livestock nationwide, directly under the Ministry of Agriculture and Rural
Development. In 2013, the Corporation was equitized according to Decision
No. 1893/QD-TTg dated December 14, 2012 of the Prime Minister. In July
2013, Vietnam Livestock Corporation-JSC officially operated as a joint stock
company after successfully implementing the equitization plan through the
initial public offering of shares. On October 26, 2015, shares of Vietnam
Livestock Corporation-JSC (stock code VLC) were officially traded on
UPCom, Hanoi Stock Exchange.

2. History
- June 21, 1996: Vietnam Livestock Corporation was established.

- In 2005: Vietnam Livestock Corporation switched to operating under the

Parent Company - Subsidiary model.

- In 2010: The parent company - Vietnam Livestock Corporation switched to

operating under the State-owned One Member Limited Company model.

- May 3, 2013: Hanoi Stock Exchange held an auction to sell shares for the
initial public offering (IPO) of Vietnam Livestock Corporation - One Member
Limited Liability Company.

- June 26, 2013: The Corporation held a General Meeting of Shareholders to

establish a Joint Stock Company with a charter capital of 631,010,000,000
VND.

- July 1, 2013: Vietnam Livestock Corporation - Joint Stock Company officially

operates under the Joint Stock Company model.

- October 5, 2015: Corporation shares were approved for first trading

registration on UPCoM with stock code VLC.
 - October 26, 2015: VLC's first trading day on UPCoM with a closing price of
13,800 VND/share.

- 2016: Vilico was honored to be awarded the Second Class Labor Medal by
the state
- 2017: Vilico became a subsidiary of GTNfoods Joint Stock Company

3. Main areas of activity:

- Raising cattle and poultry
- Buy and sell livestock breeds and livestock products
- Marine aquaculture
- Investment consulting and livestock development
- Trading in handicrafts and consumer goods

4. Company shares:

TÊN CỔ ĐÔNG SỐ CỔ TỶ LỆ TÍNH ĐẾN

PHIẾU % NGÀY
Công ty Cổ phần Sữa Việt Nam 183,105,468 84.99 19/09/2023
Phạm Thị Linh (Vợ của ông Đỗ Hoàng 7,907,187 3.67 19/09/2023
Phúc)
Đỗ Hoàng Phương (Con của ông Đỗ 7,812,500 3.63 19/09/2023
Hoàng Phúc)
Trần Công Chiến 150,000 0.07 19/09/2023
Đào Duy Linh 4,250 0.0 19/09/2023
Bùi Xuân Hải 3,250 0.0 19/09/2023
Lê Nhân Đức 1,250 0.0 19/09/2023
Nguyễn Duy Lý 1,000 0.0 19/09/2023

Part 2: Financial statement analysis

Balance Sheet
Total current assets

- Current assets have decreased from 2022 to 2021 and 2020. In 2022, they
accounted for 33.29% of total assets, but in 2020, they make up 65.69% of total
assets.

Cash and Cash Equivalents

- Cash and cash equivalents decreased year-on-year (2022: 1.02% 2021: 3.94%
2020: 4.3%) suggesting the company may have accumulated more cash or liquid
assets over time. This can be a negative sign for liquidity.
Short-term Accounts Receivables

- There's a significant increase in short-term accounts receivables between 2022:

6,15% and 2021: 1,53%. This might be due to changes in sales or payment terms
with customers.

Inventories

- The inventory value remains relatively stable over the three periods.

2022: 0,00% 2021: 0,01% 2020: 0,01%

Short-term financial Investment

- There is a gradual decrease in short-term financial investments, which could

indicate a shift in investment strategies or capital allocation.

Fixed Assets

- Fixed asset values decreased over three years, possibly indicating increased
capital expenditures or asset acquisitions.

Long-term Financial Investments

- Long-term assets in progress fluctuated steadily in all 3 years. This may represent
projects that are underway and nearing completion.

Long-term Financial Investments

Long-term financial investments increased significantly in 2022. This could indicate

an increase in corporate capital or a change in portfolio composition.

Total current liabilities

- Short-term debt has increased significantly in three periods. This increase indicates
that the company has increased its short-term obligations, which can be a negative
financial sign.

Short-term payables to suppliers

- Short-term payables to suppliers did not increase significantly, possibly due to

poorer management of payables or changes in procurement practices.
Short-term Expenses

- There is a small amount of short-term expenses in periods 1 and 3, indicating

relatively stable expenses or a decrease between the two periods.

Owner Equity

- Total equity decreased from 96,07% in 2020 to 95,16% in 2021, and 92,63% in
2022. The decrease was the result of conversions between specific components,
changes in accumulated profits and losses.

Investment and Development Fund

- The investment and development fund has decreased over time, possibly indicating
changes in investments or fund utilization.

Undistributed Profit After Tax

- Undistributed profit after tax has decreased over the three periods, primarily due to
changes in the current period's profit.

Income Statement
Net Sales

2022: 3,631,691,568 (100.00%)

2021: 3,587,576,373 (100.00%)

2020: 3,492,950,505 (100.00%)

Net sales have remained relatively stable over the 3 years.

Cost of Goods Sold (COGS)

- The cost of goods sold has also remained stable, although it increased as a
percentage of net sales in 2020, indicating potentially higher production costs.

Gross Profit

- Gross profit has shown stability but decreased as a percentage of net sales in
2020, which may be due to increased COGS.

Financial Activity Revenue

- Financial activity revenue has increased significantly over the three periods,
indicating strong financial activities or investments.

Financial Expenses

- Financial expenses have decreased over time, which may be related to increased
borrowing or interest costs.

Business Operating Expenses

- Business operating expenses have increased over the three years, which can be a
positive sign indicating cost control.

Net Profit

- Net profit increased sharply over three years.

Earnings Before Taxes (EBT):

- Earnings before taxes have generally increased over the three years.
Net Income

2022: 197,739,529,009

2021: 92,654,392,332

2020: 96,588,394,449

Analysis: Net income has shown fluctuations but increased over the three years,
indicating improved profitability.

Ratios analysis:
I. Liquidity ratio:

Liquidity ratios indicate a firm’s ability to pay short-term obligations with short-term assets
without endangering the firm. In general, higher ratios are a favorable indicator.

Current ratio
- VLC Enterprise is an enterprise whose structure mainly operates on equity and not much
debt. In 2020, the current ratio of the enterprise will be very high, up to 16.7. In 2021, the
current ratio will decrease to 13, and by 2022, it will decrease to only 4.5. The numbers show
us that over the years there has been a change in operating structure based on both sources
of money: equity and debt.

Quick ratio
- The quick ratio is an index calculated by short-term assets minus inventory. The index
shows the ability of a business to quickly pay when an event occurs and evaluates the
payment ratio if the business cannot sell inventory. In 2020, VLC's quick payment index
reached 16.7; in 2021, it decreased to 13.05; and it decreased sharply in 2022, with an index
of 4.51. We can see that after reducing inventory, VLC's quick ratio is very high, capable of
paying debts in the short term with little risk.
⇒ Through the two ratios, we can see that there is not much difference between the two
coefficients in the same year. From there, it can be concluded that in the past year,
businesses have been changing their operating structure from equity to both sources of
money: equity and debt. Besides, we can see that after subtracting inventory, the payment
ratio is almost equivalent. So it can be concluded that this may be an enterprise that does
not do much business but operates more on financial and investment activities.

II. Efficiency ratio

Inventory turnover
- Inventory turnover is calculated as the cost of goods sold divided by inventory. The
enterprise's inventory turnover ratio in 2020 was 39.77; in 2021 it was 39.16; and entering
2022, this index increased sharply and reached 57.97. In 2020 and 2021, this index will have
a sideways cycle, while there will be a strong change in 2022. When increasing the inventory
turnover ratio, businesses tend to reduce production activities. Seeing that revenue from
production activities does not have much fluctuation, the cost of goods sold remains
unchanged, but inventory has decreased sharply, it can be concluded that the business is
changing the way it operates, not focusing on production. Besides, we see that businesses
are not able to control costs well when the quantity of goods decreases but costs remain
unchanged.

Accounts receivable turnover

- Accounts receivable turnover is one of the most important ratios to measure business
performance. In 2020, the receivables turnover ratio was 2.4, while in 2020, the ratio jumped
to 8, and in 2022, the ratio decreased sharply to only 1.4. Combined with financial statement
analysis, we see that the reason for this spike is that 2021's receivables are paid on time. In
2020, receivables reached 50 billion, and in 2022, they were 151 billion, a very high amount
compared to corporate assets. Drawing from this coefficient, we can conclude that in 2021,
the business had good control over receivables with quick capital recovery and could rotate
cash flow for reinvestment.

Days’ sales of inventory

- From the very low inventory turnover ratio of the business, it can be seen that the number
of days’ sales of inventory is very low. In 2020 and 2021, the business only took 9 days, and
in 2022, the day's sales of inventory were reduced to only 6 days. This is an unbelievable
number of days to sell inventory for a livestock business.

Days’ sales outstanding

- In contrast to the number of days' sales of inventory, the number of days' outstanding it
takes to collect a business's receivables is very large. In 2022, it took businesses 259 days
to collect debt, and in 2020, it also took 151 days.

Total assets turnover

- Total asset turnover is calculated as net revenue divided by total assets. In general,
businesses do not use assets effectively to generate net revenue. However, VLC's strategy
and vision are quite good, as the business has used assets well in investment activities.

Fixed assets turnover

- Looking at the fixed asset turnover ratio in 2020 and 2021, it only stopped at 5.44 and 6.6,
respectively; however, this coefficient increased in 2022, reaching 23.19. Based on this
coefficient, we can conclude that the business is using fixed assets effectively to grow
revenue. However, financial reports show us that revenue from business activities is
ineffective when revenue from business activities has accumulated losses.

⇒ The efficiency of the business's financial investment activities is very good. However, we
see that the business operations of the enterprise are unstable, and the enterprise has not
fully exploited its fixed assets.

III. Leverage ratios

Leverage ratios indicate whether a firm is using the appropriate amount of debt financing. In
general, higher ratios indicate a greater potential return and greater bankruptcy risk.

Total debt ratio

- In 2020, VLC's debt ratio reached its lowest level, at only 0.4. In 2021, the index will
increase insignificantly, only reaching 0.5 and 0.7 in 2022. The coefficient shows that the
total assets of the enterprise are many times greater than the debt of the enterprise.
Businesses do not operate based on debt sources. From there, we can assess that the level
of risk is low for investors.

Debt to equity ratio

- Based on the financial statements, we can see that the equity structure is many times
larger than the debt source. The debt-to-equity ratio in 2020 is 0.04, in 2021 it is 0.05, and in
2022 it is 0.079. By 2022, the debt ratio increases, showing that businesses are mobilizing
more money to invest in business or financial activities.

Equity multiplier
- The equity multiplier ratio is calculated as total assets divided by total liabilities. Over the
years, the enterprise's coefficient has remained at 1, indicating that there has not been much
change in the enterprise's cash flow structure.

Times interest earned

- In 2020 and 2021, VLC's profit ratio was 14. The business performed well in 2022, when
the ratio increased to 40.1. A higher TIE ratio shows that a business can generate more
cash to pay interest and continue to reinvest in the business's operations to generate profits.
For financial providers, this is a business with potential, good profitability, and high debt
repayment ability.

Cash coverage
- The cash coverage ratio shows a business's ability to pay cash to attract investors or seek
funding. The calculation shows a business's ability to pay off its debts through its available
cash. The business's coefficient in 2020 is 13 and will grow strongly in 2022, reaching 40.
Thereby, it shows that in 2022, the company will operate well, meeting the needs and
desires of investors and loan providers. get a loan.

IV. Profitability ratio

Profitability ratios indicate whether a firm is generating adequate profit from its assets. In
general, higher ratios indicate better performance.

Gross profit margin

- Managers can assess whether or not the company is turning a profit, whether it has room
to develop, and whether or not the profit fits the company's needs by using the gross profit
margin coefficient. Are not. The company's gross margin coefficient has risen to 99%
throughout time. The production operations of the firm will perform poorly in 2022 due to
rising production costs and falling output, although this will have little impact on the
enterprise's coefficient. As a result, it is clear that corporate income and profits are highly
efficient in their corporate finance and investment operations rather than being dependent on
production activities. In addition, the trend of the coefficient remaining constant year after
year and getting better indicates that the company is running smoothly and that its risk
management strategy is effective.

Operating profit margin

- The operating profit margin of the company is well-evaluated because it has increased from
2020 to 2022 and has stayed consistent throughout time. The index reached 86% in 2022,
indicating the viability of the company. is lucrative and exhibits excellent capital resource and
operating cost control and management. Investors are able to observe that the organization
can turn a profit from its overall revenue, with a high proportion of profits that can satisfy
investors.

Net profit margin

- The coefficient that most closely represents an enterprise's financial performance is its net
profit margin. The business generated 83% in 2020, 78% in 2021, and 88% in 2022—a
considerable increase—demonstrating the business's stable net profit index and ongoing
development at a stable level. The index's upward trend over time indicates that the
company is expanding swiftly and running efficiently.

Return on assets
- Investors can obtain information on gains made from capital invested through the ROA
index. The pace at which assets are growing faster than the rate at which investors retain
earnings, however, has resulted in a downward trend in the ROA coefficient of enterprises in
recent years. As a result, investors must invest more money in order to possess a single
dong of assets. From then, it becomes evident that investors' hopes would probably drop.

Return on equity
- In addition to ROA, the enterprise's ROE index has declined over time. Consequently,
decreasing the potential for investors' capital to be profitable. If a company's return on equity
(ROE) is less than 10%, it likely has low profitability and may have trouble winning over
investors.

V. Market- Value Indicators

EPS
- The after-tax profit an investor will receive from a share, or the profit on their initial capital
expenditure, is known as earnings per share. In recent times, the value of a stock has
declined, indicating that the company's business circumstances are not particularly
conducive to attracting investment.

Price to earning ratio

- An index called PE assesses the correlation between a stock's market value and its
earnings per share. The amount of money spent per share rises as profits per share decline.
Because profits per share fall as market value rises, this makes it even harder for
businesses to raise capital. This results in higher risks and lower profits, which makes it
harder to win over investors.

Market to book per share

- The PB of the company is 13, which is comparatively high considering its profitability. This
could be the result of the stock price rising faster than business activity growth, which
caused P to increase faster than E. This would have raised the ratio and indicated an
overpriced stock price.
Dupont analysis:

For 3 years ROE was higher than ROA, showing that the company used equity capital
effectively to generate profits for shareholders.
Statement of Cash flows:
The company has invested a lot of money in projects to develop and expand their business
but has not yet reaped profits from these activities. Reporting losses at "Profit from
operating activities before changes in working capital" is a long-term investment
strategy to create future profits for the business.

The fluctuation in non-financial assets (such as receivables) in the last 2 years 2022 and
2021 recorded negative numbers, showing that the company is having difficulty collecting
money from customers or may be increasing its work. debt structure.

Fluctuations in inventory and Fluctuations in accounts payable show that the Company
is managing inventory effectively, is not facing a large surplus, and They are slow in paying
off debts to use this loan to create cash flow for other activities. This can play an important
role in maintaining normal business operations and investing in growth.

Taxes and other costs related to business activities are paid and well controlled by the
company.

Net cash flow from operating activities (104,576,185,168): This is net cash flow from
operating activities, including all of the above factors. This amount is positive, which means
that the company has generated positive cash flow from their operations.

Money for purchasing fixed assets and long-term assets is the amount of money the
company has spent to purchase fixed assets and long-term assets. The negative level within
3 years, especially 2022, recorded a large negative number, indicating that the company has
invested heavily in fixed or long-term assets and upgraded infrastructure.

Money from liquidation is a positive cash flow that shows the company has gained from
selling or liquidating fixed, unnecessary or non-performing assets. In 2022 The company has
collected positive numbers from term deposit investments over the last 2 years.

Net cash flows for the year (-12,774,953,096): This is the total net cash flow for the whole
year. Cash and cash equivalents at the beginning of the year (38,848,075,241) and at the
end of the year (26,073,122,145): This large decrease in cash flow shows that the company
has spent a larger amount of money than it had collect.
Part 3: Conclusion
In general, through the analyzed indicators and financial statements, we can see the
business, financial, and investment activities of the enterprise. Although it is a manufacturing
enterprise, the numbers reflect that this is an enterprise that focuses mainly on investment
activities. The business's ability to profit from investment activities is impressive, but its
business operations are inefficient and do not make the most of current fixed assets. The
business's ability to generate profits can meet the expectations of investors, finance
providers, and lenders. The business's indexes give us a high impression compared to other
businesses in the same industry, but investors need to pay attention to the business's
financial statements, which still leave many hidden details when many important
explanations are missing. The explanation of expenses and the cash flow of the business
have not been listed in detail.