Student name Nguyễn Lê Hoàng Long

Student ID BAFNIU18223
Class Wednesday

QUESTION 1 (65 points)

Answer:

a. According to the 2020 financial statement, all solvency ratios rose over the previous year
because MWG followed a conservative policy, decreased inventory, and boosted cash to
avoid problematic Covid19 developments. Net profit margin decreased due to higher
operating costs.

ROA and ROE fell compared to 2019, owing in part to a significant rise in equity due to
an increase in retained earnings. Moreover, nationwide social distancing played a part in
the decrease of these two ratios.

Because of scale advantages and cost-cutting measures, the gross profit margin increased
considerably from 19.07 percent in 2019 to 22.07 percent in 2020. The net profit margin
fell from 3.8 percent to 3.6 percent, but the revenue ratio of the chart grew rapidly from
10.5 percent in 2019 to 19.6 percent in 2020. Despite flat EPS, EBITDA grew
significantly due to improved gross profit margins.

b. Although the Covid 19 caused bad effects to the stock market, MWG still a good
performance in 2020. We can see that net revenue and gross profit still grow (6% and
23% respectively) in spite of the fact that the rates were the smallest in 4 years.
Furthermore, MWG reduced the percentage of cost of goods sold in the Common - Size
Vertical Income Statement so as to improve the total revenue. Therefore MGW's basic
performance has been reflected in the current market stock price.

QUESTION 2 (35 points): Answer ONE of the following questions:

1. In the financial statements of Mobile World Investment Corporation (HOSE Ticker: MGW;
CTCP Dau Tu The gioi Di Dong), the company announced a VND 3,834 billion annual income
as of 31/12/2019; however, net operating cash flows were a negative VND 1,286 billion. How are
these results possible?

Answer:

According to the cash flow statement, there was a significantly increase in payables, receivables,
and prepaid expenses, which account for 280%, 154%, and 112% respectively; while the income
after tax increase only 33%. In addition, the change in inventories (go up 79%) played a part in
the decrease in net operating cash flow. The income cannot make up for cost of operating
activities, so it caused the negative value for net operating cash flow.