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INDIVIDUAL ASSIGNMENT
***FIN202***

Lecturer : Nguyễn Phú Hà

Student name : Vũ Hoàng Nam
Student ID : HS160302
Class : MKT1605
Course : FIN202
TABLE OF CONTENTS
I. INTRODUCTION …………………………………………………………………2
1. Corporate Governance Vietnam Airlines – HVN ………………………………2
2. Business lines ……………………………………………………………………………………3
3. Development strategy ………………………………………………………………………6
II. SWOT ……………………………………………………………………………………7
III. ANALYSIS ……………………………………………………………………………..8
1. Growth ……………………………………………………………………………………………..9
2. Liquid ratio ……………………………………………………………………………………..10
3. Efficiency turnover …………………………………………………………………………..11
4. Leverage ratio ………………………………………………………………………………….13
5. Profitability ratio ……………………………………………………………………………..13
6. Market value ratio ……………………………………………………………………………15
IV. CONCLUSION ………………………………………………………………….16
V. REFERENCES

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I. INTRODUCTION
1. Corporate Governance Vietnam Airlines – JSC
- Vietnam Airlines (Vietnamese: Hãng Hàng không Quốc gia Việt Nam,
lit. 'Vietnam National Airlines') is the flag carrier of Vietnam. The airline
began operations in 1956 and became a state-owned enterprise in April
1989. Vietnam Airlines is based in Hanoi's Long Bien District, with hubs at
Noi Bai International Airport and Tan Son Nhat International Airport.
Except for codeshared Services, the airline serves 64 destinations in 17
countries.
- From its founding until the early 1990s, Vietnam Airlines was a modest
airline in the aviation sector, hindered by a number of issues, including the
country's socioeconomic and political environment. As a result of the
government's normalization of ties with the United States, the airline was
able to expand, enhance its goods and Services, and upgrade its aging fleet.
The Vietnamese government formed Vietnam Airlines Corporation in 1996,
bringing together 20 Service businesses, with the airline itself serving as the
centerpiece. Vietnam Airlines Company Limited was formed in 2010 when
the business was reorganized as a limited liability company. A seven-seat
management board, members of which are appointed by the Vietnamese
Prime Minister, oversees the company.
- Because passenger transportation is its primary business, Vietnam Airlines
is critical to the country's economic success. It owns 100% of Vietnam Air
Service Company, a small airline in southern Vietnam, and 70% of Pacific
Airlines, a low-cost carrier. In addition, the firm generates money from
airline catering as well as aircraft maintenance and overhauling through a
number of subsidiary subsidiaries, including Vietnam Airlines Engineering
Company and Vietnam Airlines Caterers. The company has also diversified
its investments in the aircraft-leasing and airport ground-serHVNing
industries, and is looking to manufacture aircraft components. It controls
and operates a cargo division, Vietnam Airlines Cargo.
- Vietnam Airlines became the first Southeast Asian airline to join Sky Team
in June 2010, becoming the alliance's first member. As of July 2016, the state
owns 86.16 percent of Vietnam Airlines, while All Nippon Airways owns
8.77 percent, when the parent company (ANA Holdings) successfully
acquired the national flag airline for US$109 million, making it a strategic
shareholder.
 Service
o Aircraft maintenance and overhaul
o Aircraft leasing
o Catering
o Cargo and passenger transport

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  Holding by management and stakeholders

Name Position

Mr. Pham Viet Thanh Chairman

Mr. Pham Ngoc Minh President & CEO

Mr. Nguyen Van Hung Executive Vice President & Director

Mr. Tran Thanh Hien Chief Accountant

2. Business lines
- Air passenger transportation (air transport Services for passengers), air
cargo transportation (transportation of luggage, cargo, parcels, postal
items, mails).
- Direct support Services for air transportation:
o General aviation operations (flights for terrain photography,
geological surveys, flights for calibration of air traffic control
towers, repair and maintenance of high voltage transmission
lines, oil and gas Services, afforestation, environmental
inspection, search and rescue operations, medical first aid,
flights for political, economic, social, national security and
defense tasks).
o Other specialized aviation Services.
o Provision of commercial, tourism and hospitality Services, sale
of duty-free goods in waiting areas at international border gates
being airports, on-board, and in Vietnam’s provinces and cities.
o Provision of ground-based technical and commercial Services;
Services at passenger terminals, cargo terminals and parking
lots at airports.
- Repair and maintenance of transportation vehicles: maintenance of
aircraft, engines, spare parts, aviation supplies and equipment, equipment
for groundwork and other technical equipment.
- Manufacturing of measuring, testing, navigating and controlling
equipment: manufacturing of spare parts, supplies, technical equipment
and other aviation industry components, provision of technical Services
and spare parts to domestic and international airlines.

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3. Development strategy
a. Vision – Mission
- Uphold the No. 1 position as Vietnam’s aviation group leader
- Vietnam Airlines to become a leading Asian airline of customer’s choice
and be the main force transportation of Vietnam as a flag carrier.
- Provide diverse and high-quality air transport up to customers’
expectations
- Create a civilized and professional working environment with various
opportunities for career development for employees.
- Run effective business operation, ensure sustainable benefits for
shareholders.
b. Core values
- Safety is the top priority and the basis of every activity.
- Customer-centric approach. Our development tightly links to customers’
trust.
- Customer-centric approach. Our development tightly links to customers’
trust.
- Creativity is the business motto, we constantly innovate various business
aspects with breakthrough mindset and strive to achieve big success.
- Responsible airline group. We understand that corporate social
reponsibility is a business practice to ensure all decisions made and actions
taken are in line with social sustainability.
c. Targets
- Top 3 leading airline group in Southeast Asia in terms of revenue.
- Vietnam Airlines to be on top 10 favorite airlines in Asia. Top 3 airlines in
Southeast Asia in terms of scale.
- Advance 4-star airline Services and progressively achieve 5-star airline
standards for Vietnam Airlines.
- Implement resilient digital transformation to become a comprehensive
Digital Airline Group.
- Become one of the most favorite workplaces in Vietnam.
d. Development strategy
 Route network
- Domestic network: This is the strategic network. Vietnam Airlines will
continue to develop its route network departing from Ha Noi - Da Nang -
Ho Chi Minh City; and promote new hubs such as Hai Phong; continue to
jointly coordinate with JPA and VASCO in product offerings.
- International network in Southeast Asia, Northeast Asia, South Pacific:
This is the main operation network, generating major profits. Vietnam

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 Airlines continues to increase flight frequency to improve the products of 2
flights/day/route, using wide-body aircraft. The Company also conducts
research to open new routes from Central Asia to Northeast Asia region,
considers opening the Ha Noi - Melbourne route, and looks for
opportunities to explore new destinations in Brisbane or Perth.
- Sub-regional network of Cambodia - Laos - Myanmar - Vietnam (CLMV):
This is a network with major political significance. Vietnam Airlines needs
to maintain an effective competitiveness with Bangkok (Thailand) gateway;
develops more products connecting tourist destinations in Central Vietnam
and Indochina... and coordinates with K6 to support Vietnam Airlines
products.
- Inter-continental long-haul flight network: This is a long-term strategic
network which is carefully analyzed and developed. Vietnam Airlines is
selecting a few more destinations in Europe as well as considering new
routes to America’s Los Angeles or San Francisco while ensuring the overall
operational efficiency of the entire network.
 Fleet strategy
- Wide-body aircraft: continue to operate the current fleet for Europe,
Australia, Northeast Asia, consider exploring new route to America on the
basis of ensuring the business efficiency.
- Narrow-body aircraft: serve domestic market and international routes with
low capacity/short-haul (less than 5 hours of flight).
- Regional jet aircraft or Turboprop aircraft: maintain routes using ATR 72
aircraft, operate niche markets (short routes, small capacity, airports with
limited infrastructure, etc.), study for new kind of aircraft to replace ATR
72.
 Investment strategy
- Along with the fleet investment, Vietnam Airlines continues to improve the
capacity of aircraft operation and maintenance, as well as IT infrastructure.
The orientation is to spend 50% of the investment capital on the fleet and
50% on other aspects.
 Capital strategy
- Using a combination of various capital sources to ensure the mobilization
of sufficient financial resources for investment needs; on the principle of
maintaining the Debt-to-Equity ratio at a safe level and low financial costs.
To execute this strategy, Vietnam Airlines implements the following
solutions: (i) Increasing owner’s equity via share issuance to increase
charter capital; raising share premium and operating profit; (ii) Mobilizing
capital from capital markets through commercial loan, bond issuance,
export credit loan (if eligible); and (iii) Utilizing the Sale and Leaseback
structure.

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II. SWOT
1. Strengths
- Has the largest market share in VN with large number of Services offered
as well as available flight schedules.
- Being the national airline of Vietnam, VNA has an easily recognizable
brand name.
- Has a younger fleet than regional and global average.
- Receives support from the government with loans in foreign currency.
- Vast network of offices and branches domestically and globally.
- Not too dependent on suppliers.
2. Weaknesses
- Yet to be able to fully exploit online ticket selling (only account for 6.3% of
revenue)
- Brand name is not as highly valued as Singapore Airlines or Thai Airways.
The quality of Services is also not as high.
- High pressure to pay off debt and interest. Liquidity ratios are decreasing.
3. Opportunities
- The domestic and global air transport markets are experiencing high
growth.
- The ASEAN Open Sky Policy offers opportunities to expand market share
- Potential growth in North America, Middle East and Indian market.
4. Threats
- Increase in level of competition since liberalization of the market can be
accomplished as of 2015.
- Budget airlines in Vietnam and the region are growing strong and capable
of meeting consumers’ demands
- Operations can easily be affected by political factors or weather.
- Business result is too dependent of fuel prices and foreign exchange rates.

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 III. ANALYSIS
Analyse the company's financial indicators and compare them with
the index of the consumer goods industry.
1. Growth

2018 2019 2020

72,979,986,795,30
Revenue 71,509,801,658,071 1 30,679,026,769,775
Revenue (%) 17.22% 2,06% -57.96%
Profits after
tax 2,111,043,624,047 2,418,477,783,260 -8,754,809,461,552
Profits after
tax (%) 10.63% 14.54% -462.03%
68,989,356,863,97
Total assets 73,542,707,557,829 4 58,571,052,175,784
Total assets
(%) 9.26% -6,19% -15,10%
18,602,169,726,54
Total equity 18,267,207,665,152 1 9,161,398,291,064
Total equity
(%) 7.52% 1.93% -50.75%

- In general, the growth rate of revenue, profit after tax and total
equity tends to decrease gradually from 2018 to 2020. HVN's
revenue in 2018 is 71,509,801,658,071VND and in 2020 it will
decrease to 30,679,026,769,775million VND. With 2018
growth falling from 17.22%. to -57.96% in 2020. In 2020 due
to the covid19 epidemic, businesses are affected a lot, and
Vietnam Airlines is not an exception.
- From 2018 to 2020, the data shows that profit after tax tends to
dramatically decrease from 10.63% to -462.03%. The growth
rate of total assets is falling down. From 2018 to 2019, business
activity tends to decrease from 9,26% to -6.19% in 2019, and
continuously decrease to -15,10% in 2020. Since 2018 to 2020,
total equity has decreased sharply from 7.52% to -50.75%,

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 2. Liquid Ratios
 Current ratio

2018 2019 2020

Current 11,853,414,741,61
assets  12,479,745,973,316 8 3,907,309,306,420
Current 24,789,970,413,04
liabilities  24,579,592,575,288 2 26,552,383,605,106
Current
ratio 0.51 0.48 0.15
- Looking at the chart, we can see that the current ratio in 2019
has decreased compared to 2018. HVN had it current ratio
covered from 0.51 in 2018, decreasing slightly to 0.48 in 2019,
and drop to 0.15 in 2020. These ratios lie between 0.1 and 0.6 –
an unhealthy range for the firm's liquidity.
- The data shows that the current liabilities of the business are
quite high. From 2018 to 2020, current liabilities tend to
increase sharply from 24,579,592 million in 2018 to 26,552,383
million in 2020.

 Quick ratio

2018 2019 2020

Current 11,853,414,741,61
assets  12,479,745,973,316 8 3,907,309,306,420
Current 24,789,970,413,04
liabilities  24,579,592,575,288 2 26,552,383,605,106
Inventories 537,893,299,625 387,113,474,158 301,070,818,236
Quick ratio 0.49 0.46 0.14
- The inventory turnover shows how well the company manages
inventories, if the number is high, the company quickly and the
inventories are not selling much.
- Overall, HVN's inventory turnover is relatively low, the highest
number of inventory turnover in 2018. In 2019 it was 0.03
slightly lower than in 2018, in 2020 the figure drop to 0.14.

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 According to the data, the company is ineffective in inventory
management.

3. Efficiency Ratios
 Inventory Turnover

2018 2019 2020

Inventories 537,893,299,625 387,113,474,158 301,070,818,236
Cost of 64,306,398,820,24
goods sold  61,401,062,141,620 5 37,989,769,351,779
Inventory
turnover 114.34 166.17 126.21

- The inventory turnover shows how well the company manages

inventories, if the number is high, the company quickly and the
inventories are not selling much.
- Overall, HVN's inventory turnover is relatively low, the highest
number of inventory turnover in 2018. In 2019 it was 0.98 slightly
lower than in 2018, in 2020 the figure decreased again to 0.46.
According to the data, the company is ineffective in inventory
management.
 Account receivable turnover

2018 2019 2020

Total net 72,116,846,314,75
sales 70,742,308,812,400 6 30,467,774,163,613
Account
receivable  7,362,688,429,645 6,206,694,293,476 2,075,612,241,261
Account
receivable
turnover 9.61 11.62 14.68
 This indicator shows the company collects high receivables from
customers. HVN index compared to the market is quite high,

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 about 9 to 15 round. The number has increased over 3 years, in
2018 about 9.61 turn over, in 2020 only 14.68 turn over
 Day’s Sales In Inventory and Day’s Sales Outstanding
2018 2019 2020
Inventory turnover 114.34 166.17 126.21

Account receivable turnover 9.61 11.62 14.68

Day’s Sales In Inventory 3.19 2.21 2.89
Day’s Sales Outstanding 37.98 31,41 24,86
- Day's Sales In Inventory (DSI) indicates the length of time a
company's cash is stuck in liquidity because of unsold inventory.
According to the data sheet, the enterprise's DSI index is quite high
over 195 days. Specifically in 2020 up to 793 days .The business
regularly sells out of inventory and has increased dramatically after
the last 3 years.
- Day's Sales Outstanding (DSO) of the enterprise has been in the year
for 3 years. From 462 days 2018 to 2027 days 2020.

 Total Assets Turnover and Fix Assets Turnover

2018 2019 2020

68,989,356,863,97
Total assets 73,542,707,557,829 4 58,571,052,175,784
Net fixed 44,224,872,792,07
assets  48,479,386,628,225 4 41,813,936,702,820
72,116,846,314,75
Net sales 70,742,308,812,400 6 30,467,774,163,613
Total assets
turnover 96.19% 95.66% 52.02%
Fix assets
turnover 68.53% 61.32% 72.86%

- HVN's TD/TA ratio has decreased over the years. About

96.19% in 2018 then fell sharply, accounting for about 95.66%
in 2019 and dramatically decreased in 2020 at 52.02%.
According to the chart, the total assets of the enterprise are
quite high and stable over the years. From 2018 to 2020, total

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 assets are 73,542,707 million, 68,989,356 million, 58,571,052
million respectively.

4. Leverage ratios

2018 2019 2020

68,989,356,863,97
Total assets 73,542,707,557,829 4 58,571,052,175,784
18,602,169,726,54
Total equity 18,267,207,665,152 1 9,161,398,291,064
50,387,187,137,43
Total debt 55,275,499,892,677 3 49,409,653,884,720
Total debt
ratio 0.75 0.73 0.84
Debt-to-
Equity 3.03 2.71 5.39
Equity
Multiplier 1.33 1.37 1.19
- HVN's total debt ratio has always been stable with a ratio
around 0.77 from 2018-2020. The highest figure in the last 3
years is 2018 with a total debt ratio of 0.84, the lowest is in
2019 with 0.73.
- Debt-to-Equity, Equity Multiplier have also been stable in the
past 3 years, specifically, they fluctuate from 1-2 in 3 years
2018-2020. The highest is 2020 with Debt-to-Equity, Equity
Multiplier at 5.39 and 1.19 respectively.

5. Profitability ratios

2018 2019 2020

Net sales 70,742,308,812,400 72,116,846,314,75 30,467,774,163,613

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 6
Cost of 64,306,398,820,24
goods sold  61,401,062,141,620 5 37,989,769,351,779
15,698,254,234,98
EBIT 23,654,987,687,231 7 1,365,874,654,236
Gross Profit
margin 3.66% 6.66% 2.23%
Operating
Profit
margin 1.36% 2.16% 0.78%

- HVN's Gross Profit margin in 3 years 2018-2020 fluctuates

quite low in the range of 2-6% per year, specifically 3.66% in
2018 and 6.66% the year, That's a sign of an outbreak that also
affects businesses a lot and HVN is no exception, as higher
ratios indicate better performance.
- Unlike HVN's Gross Profit margin, Operating Profit margin in
3 years 2018-2020 fluctuates quite low in the range of 1-3% per
year, namely 1.36% in 2018 and 2.16% in 2019 but by 2020 it
will decrease sharply to only 0,78% of the year, which is also a
sign of an outbreak of disease that also affects businesses quite
a lot and HVN is no exception, hoping that the company will
come up with new directions to maximize profits in the future
next year.
2018 2019 2020
15,987,264,987,23
Net income 31,236,235,987,133 1 1,652,986,987,213
72,116,846,314,75
Net sales 70,742,308,812,400 6 30,467,774,163,613
68,989,356,863,97
Total assets 73,542,707,557,829 4 58,571,052,175,784
18,602,169,726,54
Total equity 18,267,207,665,152 1 9,161,398,291,064
Net Profit
margin 4.12% 1.69% 1.05%
Return on
Assets
(ROA) 6.21% 4.65% 1.65%
Return on 2.54% 3.54% 1.65%
Equity

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(ROE)
- HVN's ROA from 2018 to 2029 decreased quite slowly from
6.21% to 4.65%, but then dramatically drop by 3% from 2019
to 2020 to 1.65%. This metric results from the growth in total
assets.
- Return on Equity (ROE) is a measure of how much the
shareholders earned for their investment in the company.
- This ratio shows how profitable a company is by comparing net
income total equity ROE of HVN has decreased every year
from 2018 to 2020. ROE in 2018 was 2.54%, this figure
increased slightly in 2019 to 3.54%. From 2019 to 2020, ROE
has also plummeted to 1.65% in 2020.

6. Market Value Ratios

- Indicate how the market is valuing the firm’s equity.  Higher

ratios indicate greater shareholder wealth.

2018 2019 2020

EPS 1,902 1,659 -7,704
PE  17,35 20,34 -3.67
- From 2018-2020, it shows that HVN's stock fluctuates quite
high compared to the common ground, but in general, it has
decreased compared to 2018. Specifically, from 2018 to 2019
the price dropped sharply from 73.41 to down 50.16, then by
2020 slightly increased to 66.97.

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IV. Conclusion

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