GROUP ASSIGNMENT

ANALYZING FINANCIAL STATEMENT OF

VINAMILK

Lecturer: REGINA KALANGEG PUMA-AT

Hồ Bách Thu Nguyên
Class: FIN 301 T
MEMBER: Nguyễn Dũng (9238)
Lê Kim Hiền (9781)
Trần Thị Hiếu Kiên (0710)
Nguyễn Thị Như Thảo (6338)
 ANALYZING FINANCIAL STATEMENT OF VINAMILK COMPANY

TABLE OF CONTENTS

Part 1. Introduction.................................................................................page 3
Part 2. Financial Statement.....................................................................page 7
Part 3. Financial Ratio Analysis..............................................................page 8
3.1. Liquidity ratios.....................................................................page 8
3.2. Asset management ratios.....................................................page 9
3.3. Debt management ratios......................................................page 12
3.4. Profitability ratios..............................................................page 13
Part 4. Comparative Financial Statement.............................................page 15
Part 5. Common-size Financial Statement............................................page 18
Part 6. Conclusion.................................................................................page 22
Part 7. Recommendation.......................................................................page 22

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 ANALYZING FINANCIAL STATEMENT OF VINAMILK COMPANY

1. Background company

1.1. General introduction

Vinamilk company's full name is Vietnam Dairy

Products Joint Stock Company. This is an
enterprise specializing in manufacturing and
trading milk and dairy products as well as related
equipment and machinery in Vietnam. According
to statistics of the United Nations Development
Program, this is the 15th largest company in
Vietnam in 2007.

Vinamilk is currently a leading enterprise in the field of manufacturing dairy products in

Vietnam. Products bearing this brand account for most of the market share across the
country, specifically as follows:

• 54.5% domestic dairy market share,

• 40.6% market share of powdered milk,

• 33.9% market share of drinking yogurt;

• 84.5% market share of edible yogurt

• 79.7% market share of condensed milk

Products from Vinamilk brand are distributed evenly throughout 63 provinces and cities
across the country with 220,000 points of sale. Besides, Vinamilk Vietnam is also
exported to 43 countries around the world such as the US, France, Canada, Poland,
Germany, Japan, the Middle East, etc. After more than 40 years of establishment and
development, the company has built 14 production factories, 2 logistics enterprises, 3
branch sales offices, 1 dairy factory in Cambodia (Angkormilk), 1 representative office in
Thailand.

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1.2. History of formation and development

 Formation period from 1976 to 1986

In 1976, Vietnam Dairy Products Company (Vinamilk) was officially established with
the original name Southern Coffee and Milk Company. The company belongs to the
General Department of Food Industry in the South.

In 1982, Southern Milk - Coffee Company was transferred to the Ministry of Food
Industry and renamed as Dairy - Coffee - Confectionery Enterprise I.

 The renovation period 1986 - 2003

In March 1992, the Union of Milk - Coffee - Confectionery I officially changed its name
to Vietnam Dairy Products Company (Vinamilk) - under the Ministry of Light Industry.
The company specializes in the production and processing of dairy products.

In 1994, Vietnam Dairy Products Company built another factory in Hanoi to develop the
market in the North more conveniently. This event has raised the total number of
factories of the company to 4. The construction is part of the expansion and development
strategy to be able to meet the demand for dairy products of the people in the North.

In 1996, Joint Venture with Quy Nhon Frozen Joint Stock Company to establish Binh
Dinh Dairy Joint Venture Enterprise. This joint venture has helped the company
successfully penetrate the Central market in the most favorable way.

In 2000, Can Tho Dairy Factory was built in Tra Noc Industrial Park. In May 2001, the
company inaugurated a Dairy Factory in Can Tho.

 The period of equitization from 2003 to present

In November 2003, the company was transformed into Vietnam Dairy Products Joint
Stock Company. The company's trading code on the Vietnamese stock exchange is:
VNM. In the same year, the Company inaugurated a new Dairy factory in Binh Dinh and
Ho Chi Minh City. Ho Chi Minh.

In 2004, the company acquired shares of Saigon Dairy Products Joint Stock Company,
increasing its charter capital to VND 1,590 billion. In 2005, the company continued to
buy shares of joint venture partners in Binh Dinh Dairy Joint Stock Company. In June
2005, the company inaugurated the Nghe An Dairy Factory.

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On January 19, 2006, the company was listed on the Ho Chi Minh Stock Exchange. At
that time, the capital of the State Capital Investment and Trading Corporation held
50.01% of the Company's charter capital. On August 20, 2006, Vinamilk officially
changed the company's brand logo.

In 2009, the enterprise has developed 135,000 distribution agents, 9 factories and many
dairy farms in Nghe An, Tuyen Quang. In 2012, the company continued to change the
brand's logo.

In the period of 2010 - 2012, the enterprise built a liquid milk and powdered milk factory
in Binh Duong province with a total investment of 220 million USD. In 2011, Da Nang
dairy factory was put into operation with an investment capital of up to 30 million USD.

In 2016, inaugurated the first dairy factory abroad, which is Angkormilk Dairy Factory in
Cambodia. By 2017, continue to inaugurate Vinamilk Organic Dalat farm - the first
organic dairy farm in Vietnam.

1.3. Company Vision, Mission an Core Values

Vision: To become a world grade brand in food and beverageindustry, where people put
all their trust in nutrient and health products.
Mission: To deliver the most valuable nutrition to community with ourrespect, love and
responsibility
Core Values:

 Integrity: Integrity, transparency and morals can be found inwhatever we do.

 Will: We dare to think, to do, to take responsibilities and toovercome challenges to
realize the committed targets
 Creativity: We always highly appreciate the passion, unique discovery and
innovative solutions.
 Efficiency: We always focus on added-values in all ourworks, investments and
business activities.
 Respectability: Self-respecting, equality anddedication to the growth of the
company are what wereally appreciate at Vinamilk.
 Harmony of interests: Interests of Vinamilk are also theinterests of its employees,
partners, government andsociety.
 Openness: Constructive and straight communication isthe base for our team to
become more united andstronger.

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1.4. Products

Up to now, Vinamilk Dairy Company has provided more than 250 different types of
products, with the following main product lines:

• Liquid milk with brands: ADM GOLD, Flex, Super SuSu.

• Yogurt with brands: SuSu, Probi. ProBeauty

• Milk powder for children and adults: Dielac, Alpha, Pedia. Grow Plus, Optimum Gold,
Ridielac nutritional powder, Diecerna special treatment for diabetes, SurePrevent,
CalciumPro, Mama Gold.

• Condensed milk: Phuong Nam star, Ong Tho.

• Ice cream and cheese: Subo yoghurt ice cream, Delight ice cream, Twin Cows, Ice
cream kid, Oze Ice cream kid, Bow tie beef cheese.

• Soy milk – beverage: Vfresh juice, Icy bottled water, GoldSoy soy milk.

2. Financial Statement
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2.1. Balance sheet

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 ANALYZING FINANCIAL STATEMENT OF VINAMILK COMPANY

2.2. Income statement

3. Financial Analysis

3.1. Liquidity ratios

Ratio Formula Calculatio Analysis

n
2020 2019
1. Current Current = = The current ratio in 2019 and
ratio Assets/ 29,632,809 24,690,283 2020 were 1.71 and 2.09
Current 14,209,236 14,438,986 respectively, which meant that
Liabilities = 2.09 = 1.71 the current ratio increased by
0.38 times compared to that in
the previous year. In other
words, in 2019 100 VND of
current liability was assured by
1.71 dong of current asset
whereas in 2020 it was only
assured by 2.09 dong. Therefore,
the ability to pay short-term
obligation in 2020 was better

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than in 2019. The reason is that

the growth in current assets was
higher than that of the current
liabilities. Vinamilk in 2020 and
in 2019 can payable current
liabilities out of current assets.
2. Quick Quick = = With a quick ratio of higher than
Ratio assets/ 24,760,658 19,738,521 1, Vinamilk appears to be well
Current 14,209,236 14,438,986 positioned to cover its current
Liabilities = 1.74 = 1.37 liabilities and has liquid assets
available to cover each dollar of
short-term debt. A quick ratio of
1.74 in 2020 indicates that the
company has 1.74 dong of
liquid assets available to cover
each 100 dong of its current
liabilities. Likewise, Vinamilk
had 1.37 dong in quick assets
for each VND of current
liabilitites in 2019. This ratio of
2020 is more than 2019 which
proves that Vinamilk in 2020
and in 2019 can payable current
liabilities out of quick assets.

3.2. Assets management ratios

Ratio Formula Calculation Analysis

2020 2019
1. Account Net sales 52,335,220 = There is 9.81 times to
=
receivable (Net credit 5,335,735 49,822,326 company collect
turnover sales) / = 9.81 4,637,582 receivables in 2020.
Accounts = 10.74 Meanwhile, there is 10.74
receivable times to collect
receivables in 2019. The
account receivable
turnover in 2020 is lower
in 2019, it means
Vinamilk has a poor credit
recovery process from
transactions or related
debts in 2020. This shows

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that the credit policy of the

business is not good or the
customer is unable to pay
the debt.
2. Average 365 days/ 365 365 Vinamilk needs 37 days to
= =
Collection Accounts 5,335,735 4,637,582 collect receivables in a
Period Receivable = 37 = 34 year in 2020, while in
turnover 2019 company needs 34
ratio days to collect receivables.
Because of the decreasing
in account receivable
turnover in 2020, the
average collection period
is higher than the 2019.
3. Net sales/ 52,335,220 = There are 10.74 times that
=
Inventory Inventories 4,872,151 49,822,326 Vinamilk company turn its
turnover = 10.74 4,951,762 inventories to sales in
ratio = 10.06 2020. Meanwhile, there
are 10.06 times that
Vinamilk company turn its
inventories to sales in
2019. In 2020, the
inventory turnover ratio of
the company (10.74) is
higher than the ratio of the
inventory in 2019 (10.06).
The reason is that the
revenue of 2020 increased,
along with the decrease in
inventory, leading to an
increase in cost of goods
sold. It means inventories
turnover ratio is still in a
reasonable and stable
level, consistent with the
inventory management
policy of the company.
The company does not
allow any significant
slowdown in inventory.
4. Days 365 days/ 365 365 From the calculations
= =
sales in Inventory 10.74 10.06 above, Vinamilk shows a
inventory turnover = 34 = 36 shorter period – about 34
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turnover ratio days – to clear its stock in

ratio 2020. And compared with
2019 (36 days), the day
sales in inventory in 2020
is shorter than in 2019. It
means the company has
good performance when it
sells a lot of inventory
products in 2020.
5. Fixed Net sales/ = = The fixed asset turnover
Assets Net fixed 52,335,220 49,822,326 ratio for the year is 2.7
Turnover asset 19,356,366 20,384,251 times, meaning that for
Ratio = 2.70 = 2.44 every 100 dong invested in
fixed assets, a return of 2.7
dong is earned in 2020.
And the fixed asset
turnover ratio for the year
is 2.44 times, meaning that
for every 100 dong
invested in fixed assets, a
return of 2.44 dong is
earned in 2019.
Furthermore, fixed asset
turn over in 2020 is higher
than the fixed assets turn
over in 2019 (2.44), this
suggests that efficiency of
assets use of company as
well.
6. Total Net sales/ = = The total asset turnover
Asset Total assets 52,335,220 49,822,326 ratio for the year is 1.07
Turnover 48,989,175 45,074,534 times, meaning that for
ratio = 1.07 = 1.11 every 100 dong invested in
total assets, a return of
1.07 dong is earned in
2020. And the fixed asset
turnover ratio for the year
is 1.11 times, meaning that
for every 100 dong
invested in fixed assets, a
return of 1.11 dong is
earned in 2019.
Furthermore, total asset

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turn over in 2020 is lower

than the total assets turn
over in 2019. It means
Vinamilk uses it total asset
to generate sales is not
good.
3.3. Debt management ratios

Ratio Formula Calculation Analysis

2020 2019
1. Total Total 15,248,015 15,390,489 In 2020, Total
= =
debt to total Liabilities/ 48,989,175 45,074,534 liabilities accounted
capital ( Total = 0.3113 = 0.3414 for 31.13% of the
Liabilities company's capital
+ Equity) and in 2019, it
accounted for
34.14%. It shows
that the financial
autonomy of
enterprises is very
low. The ratio in
2020 has decreased
compared to 2019,
proving that
Vinamilk is reducing
its dependence on
the use of capital
from outside to
finance short-term
and long-term assets,
thereby reducing the
risk to the solvency
of the company.

2. Long- Long- = = In 2020, long-term

term debt to Term 1,038,779 951,503 debt accounted for
equity Liabilities/ 1,038,779+ 33,741,160
951,503+29,684,045
2.29% of equity and
(Long- = 0.0299 = 0.0311 in 2019 accounted
Term for 3.11%. It can be
Liabilities seen that Vinamilk's
+ Equity) level of long-term
loan financing is
very low. The ratio

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in 2020 has
decreased compared
to 2019, thereby
showing that the
company's financial
risks are decreasing.
Long-term debt
accounts for a very
low proportion of
total debt of
enterprises

3.4. Profitability Ratios

Ratio Formular Calculation Analysis

2020 2019
1. Profit Net Income/ = = In 2020, the company earned
margin Net Sales 10,227,642 9453931 19.54 VND million in net
52,335,220 49822326 income from sales. In 2019, it
=0.1954 =0.1898 reached 18.98 VND million.
It shows that the profitability
of the business after
eliminating all costs incurred
in the period is very good. In
2020 the ratio has increased
compared to in 2019,
businesses are becoming more
and more efficient when they
can generate more profit from
a VND of revenue.

2. Gross Gross Profit/ = = In 2020, each million dong

margin Net sales 19790695 19515535 generates 37.84 VND million
52335220 49822326 of profit after paying the cost
=0.3782 =0.3917 of goods sold. In 2019 it is
39.17 VND million . In 2020,
the gross profit margin is
lower than that of 2019,
showing that the business is
having problems hindering
profit potential, , the reason is
that the cost Vinamilk spends
for production is quite high,

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reducing the profitability of

business capital.

3. EBIT/ Net = = In 2020, the company earned

Operating sales 12510446 11695309 23.9 VND million in
margin 52335220 49822326 operating income from sales.
ratio =0.2390 =0.2347 In 2019, it earned 23.47 VND
million . It shows that the
profitability of the enterprise
after eliminating the expenses
for production and business
activities incurred in the
period is quite high. The
higher ratio in 2020 than the
previous year shows that
Vinamilk can not only expand
profit margin, but also control
related operating costs
effectively.

4. Return Net Income/ = = In 2020, the company earned

on total Total assets 10227642 9453931 20.88 million dong profit after
assets 48989175 45074534 tax from its assets. In 2019, it
(ROA) =0.2088 =0.2097 earned 20.97 million VND. It
can be seen that profit after
tax increased very small while
total assets tended to increase
sharply, which led to a
decrease in ROA in 2019.

5. Return Net Income/ = = In 2020, the business earned

on equity Shareholders' 10227642 9453931 48.94 million dong of after-
(ROE) Equity 31379697 27456848 tax profit from equity. In
=0.4894 =0.5428 2019, it earned 54.28 million
vnd. The reduced ROE for
2020 means that Vinamilk's
management is making poor
decisions about reinvesting
capital in non-profitable
assets.

6. Return EBIT/ = = In 2020, the company earned

on Common 59.86 million dong profit from
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Common equity 12510446 11695309 the capital used. In 2019, it

equity 20899554 17416878 earned VND 67.15 million.
(ROCE) =0.5986 =0.6715 The ROCE ratio in 2020
showed a sharp decline,
showing that Vinamilk is
losing its advantage, the
reason is that the company
uses more capital while the
company's profit. Earnings
have not changed much
compared to 2019.

7. Basic EBIT/ Total = = In 2020, the business earned

Earning assets 12510446 11695309 25.54 million EBIT from total
ratio (BEP) 48989175 45074534 assets. In 2019, it earned VND
=0.2554 =0.2595 25.95 million. The BEP ratio
of the business in 2020 has
decreased, showing that the
lower the underlying
profitability of the asset, the
lower the business
performance.

4. Comparative Financial Statement

Vietnam Dairy Products Joint Stock Company

HORIZONTAL
December 31, 2020
31/12/2020 31/12/2019
Comparative (%)
Vnd million Vnd million
Current assets 29.632.309 24.690.283 20.02%
Cash and cash equivalents 2.111.243 2.665.195 (-20.78%)
Other investments 17.313.680 12.435.744 39.23%
Trade and other receivables 5.335.735 4.637.582 15.05%
Inventories 4.872.151 4.951.762 (-1.61%)
Fixed assets 19.356.366 20.384.251 (-5.04%)
Trade and other receivables 42.382 435.833 (-90.28%)
Right of use assets 615.053 517.0988 18.95%
Other investments 286.955 298.564 (-3.89%)

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Property, plant and equipment 12.866.139 13.810.973 (-6.84%)

Biological assets 1.158.775 1.121.205 3.35%
Intangible assets 3.236.282 3.426.086 (-5.54%)
Investment property 59.997 62.018 (-3.26%)
Investment in equity accounted 686.486 688.112 (-0.24%)
investees
Deferred tax assets 22.859 24.372 (-6.21%)
TOTAL ASSETS 48.989.175 45.074.534 8.68%
LIABILITIES AND EQUITY
LIABILITIES 15.248.015 15.390.489 (-0.93%)
Current liabilities 14.209.236 14.438.986 (-1.59%)
Borrowings 7.316.497 5.351.461 36.72%
Trade and other payables 6.122.029 8.222.883 (-25.55%)
Income tax payables 472.615 448.628 5.43%
Other taxs payable 186.935 171.126 9.24%
Advances from customers 11.116 245.248 (-95.47%)
Non- current liabilities 1.038.779 951.503 9.17%
Borrowings 167.442 122.993 36.12%
Trade and other payables 59.731 27.846 114.50%
Lease liabilities 315.844 258.642 22.12%
Severance allowance obligations 150.223 167.095 (-10.10%)
Deffered tax liabilities 345.559 374.927 (-7.83%)
EQUITY 33.741.160 29.684.045 13.67%
Equity attributable to equity 31.379.697 27.456.848 14.29%
holder’s of the Company
Share capital 20.899.554 17.416.878 20.00%
Share premium 1.883.570 1.883.570 0%
Other capital 202.658 0 0%
Treasury shares (-11.645) (-11.645) 0%
Fair value reserve (-6.450) (-1.601) 302.87%
Translation reserve 10.654 23.186 (-54.05%)
Other reserve 3.286.242 2.200.188 49.36%
Retained earnings 5.115.114 5.946.272 (-13.98%)
Non – controlling interest 2.361.463 2.227.197 6.03%
TOTAL LIABILITIES AND 49.989.175 45.074.534 8.68%
EQUITY
Analysis:
1. In 2020, current assets increased by 20.02% due to an increase of 15.05% in trade and
other receivables compared to 2019 resulting in a 20.78% decrease in cash and cash
equivalents compared to 2019.
2. Cash and cash equivalents: In 2020 is 2,111.243 million VND, down 553,952 million

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VND equivalent to 20.78% compared to 2019. Reducing too much cash will adversely
affect the company. Therefore, the company should put it in the bank to make a profit and
generate more income for the company.
3. Trade and other receivables: The 2020 percentage increase is 15.05% compared to
2019, trade and other receivables indicates an increase in debt, the company should
increase the debt collection rate so that the debt is recovered faster to avoid the lack of
money due to not being able to collect the debt.
4. Vinamilk's balance sheet in 2020 shows that fixed assets decreased by 5.04% or
1,207,885 while long-term liabilities increased by 9.77% or 87.276 billion dong. Thus,
the company has used a long-term resource to financial additional working capital.
5. Liabilities of 2019 and 2020 are 34.14% and 31.13%, respectively. The company
mainly uses short-term debt, which can be seen clearly when long-term debt only
accounted for 2.11% in 2019 and 2.12% in 2020. Liabilities decreased by 0.93% but
expenses loans in 2020 increased by 36.72% compared to 2019. The borrowing
increased 36,72% will lead to increased risk, which is really not good for the company.
The company should use equity more than borrowing to reduce risk.
6. Equity: In the company's equity capital, the company mainly uses the owner's
investment capital for reinvestment. Equity accounted for 60.91% in 2019 and 64.05% in
2020, up 14.29% over last year. This helps the company reduce payment pressure and
keep payment risk at a low level. However, this also reduces the profitability of the
company. Proving this is that the profit increased only 8.18% compared to last year.

VietNam Dairy Products Joint Stock Company

HORIZONTAL
December 31,2020
31/12/2020 31/122019 Comparative
Vnd million Vnd million (%)
Net sales 52.355.220 49.822.326 5.08%
Cost of sales (-32.564.525) (-30.306.791) 7.45%
Gross profit 19.790.695 19.515.535 1.41%
Other income 6.173 13.401 (-53.94%)
Selling expenses (-6.464.055) (-6.823.427) (-5.27%)
General and
-(2.080.370) (-1.610.443) 29.18%
administration expenses
Other gains/(losses) – net 19.079 (-11.862) (-260.84%)
Results from operating activities 11.498.790 11.097.048 3.62%
Finance income 1.166.557 72.423 1510.75%
Finance cost (-15.878) (-12.025) 32.04%
Net finance income 1.007.774 60.398 1568.56%

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Share of profit/(loss) of equity

3.882 (-5.717) (-167.90%)
accounted investees
Profit before tax 12.510.446 11.695.309 6.97%
Income tax (-2.282.804) (-2.241.378) 1.85%
Net profit 10.227.642 9.453.931 8.18%
Analysis: The comparative income statement given above reveals that there has been an
increase in net sales of 5.08% while the cost of sales has increased nearly by 7.45%
thereby resulting in an increase in the gross profit of 1,41%.
The most interesting thing is that general and administration expenses increased by
29.18% and other incomes decreased by 53.94%. This is really bad for the company but
the financial income increased to 1510.75% so the net profit margin increased by 8.18%
from 2019 to 2020. The company needs to reduce the general and administration
expenses by doing business reduce advertising costs, salary costs... to increase profits.

5. Common-size Financial Statements

Analysis: According to the above vertical financial statement, meaning analysis: In

2019, the company's COGS equals 60.83% of revenue. However, by 2020, COGS has
slightly increased to account for 62.20% of revenue. That's not good for the company, it

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leaves net profit unchanged. Therefore, the company needs to slightly adjust the COGS to
be reasonable. This means that the cost of direct expenses and purchases have gone up.
This suggests that the firm should try to find quality material at a lower cost and lower its
direct expenses if possible. Therefore, COGS ratio has raised in 2020. That's why Gross
Profit in 2020 was lower than 2019. The percentage ratio of gross profit to sales was
39.17% which was reduced 37.8% in 2020.
Furthermore, the percentage of operating income to net sales was 22.27% in 2019, which
was reduced 21.96% in 2020. The cause is other income makes up a very small
percentage of sales. In 2019, other income accounted for 0.03% of revenue and in 2020
other income accounted for 0.01% of revenue. And the selling expense accounted for
12.35% of revenue in 2020. Meanwhile, the selling expense accounted for 13.7% of
revenue in 2019. So the company should decrease the selling expense to increasing the
operating income. Finally, we look at the firm's net profit. Net profit raised from 18.98%
percent of sales in 2019 to 19.54 percent of sales in 2020.

Vietnam Dairy Products Joint Stock Company

Vertical
31-Dec-20
12/31/2020 12/31/2019 12/31/2020 12/31/2019
  vnd million vnd million % %
Current assets 29,632,809 24,690,283 60.49% 54.78%
2,111,243 2,665,195 4.31% 5.91%
Cash and cash
equivalents
Other investments 17,313,680 12,435,744 35.34% 27.59%
Trade and other
receivables 5,335,735 4,637,582 10.89% 10.29%
Inventories 4,872,151 4,951,762 9.95% 10.99%
Fixed assets 19,356,366 20,384,251 39.51% 45.22%
Trade and other
receivables 42,382 435,833 0.09% 0.97%
Right of use assets 615,053 517,088 1.26% 1.15%
Other investments 286,955 298,564 0.59% 0.66%
Property, plant and
equipment 12,866,139 13,810,973 26.26% 30.64%
Biological assets 1,158,775 1,121,205 2.37% 2.49%
Intangible assets 3,236,282 3,426,086 6.61% 7.60%

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Investment property 59,997 62,018 0.12% 0.14%

Investment in equity
accounted investees 686,486 688,112 1.40% 1.53%
Deferred tax assets 22,859 24,372 0.05% 0.05%
TOTAL ASSETS 48,989,175 45,074,534 100% 100%
LIABILITIES AND
EQUITY        
LIABILITIES 15,248,015 15,390,489 31.13% 34.14%
Current liabilities 14,209,236 14,438,986 29.00% 32.03%
Borrowings 7,316,497 5,351,461 14.93% 11.87%
Trade and other
payables 6,122,029 8,222,883 12.50% 18.24%
Income tax payable 472,615 448,268 0.96% 0.99%
Other taxes payable 186,935 171,126 0.38% 0.38%
Advances from
customers 11,116 245,248 0.02% 0.54%
Non-current liabilities 1,038,779 951,503 2.12% 2.11%
Borrowings 167,422 122,993 0.34% 0.27%
Trade and other
payables 59,731 27,846 0.12% 0.06%
Lease liabilities 315,844 258,642 0.64% 0.57%
Severance allowance
obligations 150,223 167,095 0.31% 0.37%
Deferred tax liabilities 345,559 374,927 0.71% 0.83%
EQUITY 33,741,160 29,684,045 68.87% 65.86%
Equity attributable to
equity holders of the
Company 31,379,697 27,456,848 64.05% 60.91%
Share capital 20,899,554 17,416,878 42.66% 38.64%
Share premium 1,883,570 1,883,570 3.84% 4.18%
Other capital 202,658 0 0.41% 0.00%
Treasury shares 11,645 11,645 0.02% 0.03%
Fair value reserve 6,540 1,601 0.01% 0.00%
Translation reserve 10,654 23,186 0.02% 0.05%
Other reserve 3,286,242 2,200,188 6.71% 4.88%
Retained earnings 5,115,114 5,946,272 10.44% 13.19%
Non-controlling
interest 2,361,463 2,227,197 4.82% 4.94%
TOTAL LIABILITIES
AND EQUITY 48,989,175 45,074,534 100.00% 100.00%

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Analysis:
1. Current assets account for 54.78% of total asset in 2019 and 60.49% of total asset in
2020. Moreover, other investment in short-term assets accounted for 35.34% of total
assets in 2020 and it accounted for 27.59% of total assets in 2019. This shows that the
company is expanding its financial activities.
2. Fixed assets account for the highest proportion, in which land accounts for a large
proportion of up to 30.64% of total asset in 2019 and 26.26% of total asset in 2020. This
shows that the company will reduce investment costs and invest more in technology.
3. Liabilities of 2019 and 2020 accounted for 34.14% and 31.13% of total liabilities and
equity respectively. The company mainly uses current liabilities, which can be seen
clearly when non-current liabilities accounted for only 2.11% of total liabilities in 2019
and 2.12% of total liabilities in 2020. This shows that the company is controlling quite
appropriately on accounts payable.
4. The capital structure shows that Vinamilk's capital source mainly comes from equity.
In 2020, equity accounted for 68.87% of total liabilities and equity. Meanwhile, in 2019,
equity accounted for 65.86% of total liabilities and equity. Shows that the company is
becoming more and more independent. It shows that the financial autonomy of the
business is increasing.

6. Conclusion

Through part 1, which are introduction, history, all the Vinamilk’s products,
characteristics of Vinamilk company. And in the part 2, it’s about financial analysis of
Vinamilk Company. It has a general look that the company played quiet good in 2020
due to the revenue is high, and net income is quiet good only a little bit less than 2019.
We get a clearly look about the financial performance situation of the Vinamilk
Company.

In the part 3, 4 and 5, some financial ratios results about the financial situations of the
Vinamilk company is made. In general, the performance of the company’s liquidity ratios
are good. Inventory turnover of Vinamilk 2020 increased than that of 2019. The ratio
shows that commodity consumption rate of Vinamilk higher than the production rate.
This shows the rising business efficiency and capital, the market conditions and
consumer product are favorable. The frequent changes of inventory turnover over the
year also shows goodsales management. Through the analysis results, we see that
Vinamilk use the assets of the company in the production and business operation is very
efficient. This shows that Vinamilk manage that brought to the company when making
investments. As to the return on assets and return on equity, the main reason that affect
them are the net profit margin of the company. As to debt, the debt proportion is
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relatively lower. It can decrease the risk to the company. So company should strengthen
the management of capital structure. Through analysis, it can be seen that Vinamilk
deserves to be the leader in the dairy industry in Vietnam.

7. Recommendation

(1) Liquidity ratios: The current ratio in 2019 and 2020 were 1.71 and 2.09 respectively,
which meant that the current ratio increased by 0.38 times compared to that in the
previous year. The reason is that the growth in current assets was higher than that of the
current liabilities. To be specific, while the current assets in 2020 climbed by 20.02%,
there was a 1.59% decreased in current liabilities. This decrease was mainly due to
advances from customers and trade and other payable during the year. According to this,
the quick ratio of Vinamilk indicates that it has the ability to pay current liabilities by
cash when its ratio were 1.74 and 1.37 respectively in 2020 and in 2019. Obviously, both
of 2 years Vinamilk experienced the figures which were greater than 1 so it can be said
that this company had enough capacity to repay its short term debts when it comes due.
Therefore, the company needs to maintain the indicators and have management solutions
to further optimize. Vinamilk company can use of current assets such as investing in
other projects or having a plan to use them more effectively.

(2) Asset management ratios:

 In 2020 and 2019, Vinamilk has a account receivables turnover ratio of 9.81 and
10.74, respectively. In addition, in 2020, this ratio decreased rapidly which means
that the company was less efficient in collecting debt. Therefore, the company
needs to adjust this ratio by increasing its ability to pay by credit card or reducing
its receivables. The company must have a good credit policy, in order to reduce
the receivables, the company can apply measures such as: when signing contracts
with customers, the company should rely on a number of constraints in terms of
terms and conditions. payment or some incentive if the customer pays early. This
helps customers to pay their debts early and is a form of promotion to help retain
customers for the company.
 The company's inventory turnaround time is short but tends to increase from 2019
to 2020 specifically from 10.74 to 10.06, up 0.68 because the increase in the value
of raw materials is greater than the growth rate of net sales, this proves that the
inventory management policy and the ineffective sales policy lead to waste of
capital, reducing the company's profitability. The company needs to focus on
determining the level of demand to make more reasonable reserves. The

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company's inventory needs to have sales management measures to reduce

inventory costs and avoid the company's capital stagnation.

(3) Debt management ratios: In 2020, Total liabilities accounted for 31.13% of the
company's capital and in 2019, it accounted for 34.14%. This number decreased in the
following year when 3.01% of decrease can be observed in 2012. It has a quite high
amount of debt, and therefore company should be more active in implementing its
investment projects, increasing profit for the shareholders, reducing significantly
borrowing costs and exposed to less risk in terms interest rate increases or credit rating.

(4) Profitability ratios: ROE value in 2020 is 48.94%, in 2019 is 54.28%, down 5.34%.
Overall this reduction is a good thing for the company. The higher the ROE value, the
better the return on equity. However, in this case, the ROE is high because the company
is using a lot of borrowed capital, making the financial structure unbalanced and the
business will face many risks. Therefore, the company should use more equity instead of
borrowed capital to avoid risks.

(5) Liabilities: The proportion of liabilities is low, averaging about 31.13% of total
capital in 2020. Of the total liabilities, most of them are short-term debts, which helps the
company to bear less usage costs. than the use of long-term debt. However, using too
much short-term capital will cause the mobilization of short-term loans, increasing
payment pressure and higher financial risks, and will also significantly affect the
profitability of the company.

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