BANKING ACADEMY OF VIETNAM

INTERNATIONAL SCHOOL OF BUSINESS

FINANCIAL ANALYSIS REPORT

KIDO GROUP CORPORATION
(HOSE: KDC)

Lecture: Mrs. Đỗ Trang

Subject: Interpretation Financial Statement
Class: CityU8D
Group member: Phạm Mai Phương
Đoàn Thị Thảo Linh
Phan Thị Hạnh
Phạm Thị Hồng Diệp
Phùng Thị Thanh Hương

  
 TABLE OF CONTENTS
I. INTRODUCTION........................................................................................2
1. Overview...................................................................................................2
2. Main business lines...................................................................................2
3. Main consumer market............................................................................3
II. FINANCIAL STATEMENT ANALYSIS....................................................1
1. Assets Structure Analysis........................................................................1
2. Capital Structure Analysis......................................................................8
3. Business Performance Analysis.............................................................12
4. Cash Flow Statement.............................................................................17
III. FINANCIAL RATIOS............................................................................21
1. Activity Ratios........................................................................................21
2. Liquidity Ratios......................................................................................24
3. Solvency Ratios.......................................................................................26
4. Profitability Ratios.................................................................................29
IV. CONCLUSION........................................................................................36
V. REFERENCES............................................................................................37

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 I. INTRODUCTION
1. Overview
KIDO's full name is Kinh Do Joint Stock Company - distributing mainly
consumer food products such as cooking oil, ice cream, confectionery, snack
food and beverage. The company's stock exchange: KDC. The company's head
office is located at 141 Nguyen Du, Ben Thanh, District 1, City. Ho Chi Minh,
Vietnam with an attractive red brand logo.

2. Main business lines

● Processing agricultural products and food

● Producing confectionery, pure drinking water and fruit juice.

● Buying and selling agricultural products, food, technology products,

fabrics, garments, shoes, bags, watches, glasses, cosmetics, electronics,
refrigeration, handicrafts, school tools practice and teaching, stationery,
photographic supplies, fresh vegetables.

● Commercial services

● Agent for buying and selling, consigning goods

● Advertising service.

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 3. Main consumer market
The company's products are mainly consumed domestically (the leading
confectionery manufacturer in Vietnam). Particularly in Ho Chi Minh City, the
company has a consumption system through supermarkets and bakeries,
accounting for about 15% of the company's revenue. Kinh Do's products are
present in over 30 countries: USA, Canada, Mexico, Japan, Taiwan... Export
revenue accounts for about 10% of the company's total revenue.

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 II. FINANCIAL STATEMENT ANALYSIS

Assets 2020 2019 2018 2020-2019 2019-2018

Current assets 44,36% 41,17% 42,54% 11,49% -7,85%
Cash and cash
equivalents 8,92% 4,40% 5,14% 110,09% -18,61%
Short-term investments 5,57% 5,01% 16,59% 14,89% -71,23%
Current accounts
receivable
18,85% 22,83% 7,51% -14,56% 189,39%
Inventories 9,81% 7,61% 9,54% 33,42% -24,07%
Other current assets 1,20% 1,32% 3,75% -5,60% -66,52%
Non-current assets 55,64% 58,83% 57,46% -2,10% -2,55%
Long-term receivables 0,46% 0,51% 0,74% -5,04% -34,40%
Fixed assets 21,67% 23,90% 24,28% -6,14% -6,31%
Investment properties 0,19% 0,30% 0,30% -3,86% -3,72%
Long-term asset in
progress 0,45% 0,14% 0,23% 228,06% -41,17%
Long-term investments 30,40% 31,14% 28,47% 1,01% 4,14%
Other long-term assets 2,62% 3,09% 37,06% -12,41% -92,05%
Total assets
100% 100% 100%
3,49% -4,80%

Table 1: Assets Structure

1. Assets Structure Analysis
Overall, it can be seen that the value of the company's total assets has
fluctuated over the 3-year period from 2018. Specifically, in 2018 the total asset
value of the company was 12,534 billion VND, then decreased by 4.63% in
2019. However, by 2020, the total asset value will reach 12,349 billion VND,
corresponding to a growth rate of 3.49%. Thus, compared to the period of 2018-
2019, KDC has had a restructuring of its production and business scale, mainly
because of the change in structure between current assets and non-current
assets.
 Specifically, in 2018, the company's current assets reached 5,331 billion
VND, accounting for 42.54% of the total asset value; but in 2019 only
accounted for 41.17% when reaching a value of 4,912 billion VND. Besides,
TSDH also decreased from 7,202 billion dong to 7,019 billion VND
respectively during this period. However, the current assets proportion tend to
increase as opposed to that of the current assets. This proves that the enterprise
has changed its asset structure and changed its business strategy in the long
term.

By 2020, total short-term assets will increase by 564 billion VND

(equivalent to 11.49%) compared to that of 2019. At the same time, the ratio of
current assets to total assets in this period also increases from 41.17% to
44.36%. In contrast, total long-term assets tended to decrease when in 2019,
KDC reached 7,019 billion VND, accounting for 58.83% of total assets; while
6,871 billion VND of total assets was recorded, accounting for only 55.64 % in
2020. It can be seen that, compared to the previous 2 years, KDC has changed
asset structure, short-term assets gradually accounted for a larger proportion of
long-term assets.

KDC's Assets Structure

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2020 2019 2018

Current Assets Non-current Assets

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 1.1. Current Assets
1.1.1. Cash and cash equivalent

In 2018, cash and cash equivalents were 644 billion VND, accounting for
5.14% of total assets and 12.09% of total current assets. In 2019 these figures
were on a downward trend, at a decrease of 18.61%. The main factor causing
was the cash equivalents represented in deposits at banks with terms of less than
three months and the applicable deposit interest rates declined from 439 billion
VND. in 2018 to nearly 49 billion dong in 2019. This proves that, by the end of
the period, KDC has used most of the money to buy input materials to serve the
production and business process. In addition, the company's cash in 2019
increased by 132.05% compared to 2018 because the company recovered its
short-term financial investments to meet the demand for short-term necessities.
It can affect the efficiency of capital use of the enterprise.

In 2020, cash and cash equivalents were 1,102 billion VND, accounting for
8.92% of total assets and 20.12% of total current assets. Compared to 2019, the
value of these accounts increased by 577 billion VND, corresponding to a
growth rate of 110.09%. This sudden increase was also mainly because cash
equivalents represented in deposits at banks with a term of less than three
months and the applicable deposit interest rate increased from 48.9 billion VND
in 2019. to 373 billion VND in 2020. In addition, the company has deposited
money in its short-term financial investments, which has resulted in an increase
in cash reserves.

High reserves of cash and cash equivalents help the company to ensure
timely and prompt payment. However, cash and cash equivalents account for an
increasing proportion year by year in total assets causing concern about the
waste of capital, the reduction of capital turnover when leaving the money idle.
Along with that, if the management is not good, it will cause negative
phenomena for the business. On the other hand, keeping cash on hand can also

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be because KDC was preparing for an investment plan to purchase machinery,
equipment or supplies to expand distribution channels, product portfolio and
increase market share in the industry, such as the essential food segment.

1.1.2. Short-term Investment

Short-term financial investment is also one of many changes in the

company's current assets. This is considered as an important activity in the
market economy because this activity will help businesses use excess capital
effectively. However, perhaps because of preparing for a new business strategy
or a change in investment policy, KIDO has withdrawn capital from short-term
financial investments. In 2018, KIDO invested nearly 2,080 billion VND in
short-term financial investments, but by 2019 the figure had decreased to 598
billion. The proportion of total assets also decreased from 16.59% to 5.01%. In
which, KDC mainly recovered investments held to maturity in 2019, 1,481
billion VND, which means a decrease of 71.25% compared to the previous year.
Specifically, deposits at HD Bank, at Vietnam Import Export Commercial Joint
Stock Bank, and at Asia Commercial Joint Stock Bank with a total recoverable
value of 1,801 billion VND.

The company's short-term investment activities in 2020 gained 14.89%

higher than the last year. The proportion of total assets also increased from
5.01% to 5.57%. During this period, KDC also increased deposits in
investments held to maturity at Ho Chi Minh City Development Commercial
Joint Stock Bank with a recoverable value of 187 billion VND, and held-to-date
investments. Other short-term maturities also increased this year.

1.1.3. Receivables

From 2018 to 2020, the value of receivables has changed significantly.

Specifically, in 2018, the total amount of receivables was about 940 billion
VND, accounting for only 7.51% of total assets. However, in 2019, this number

4
rose dramatically by 189.39% compared to the previous year and got 2724
billion VND, followed by a drop of 14.56% in 2020. The increasing amount of
receivables does not prove that the business is getting better at debt
management, but because of the method of consumption applied. Previously,
KDC mainly used retail method, the amount of receivables was low because
sales of goods could be sold immediately. Over the years, the business was
gradually shifting to the wholesale form, the proportion of receivables was high
because this is a characteristic of deferred payment.

The amount of short-term receivables of the business is always larger than

the inventory (especially the backlog in the form of finished goods). Inventories
dropped sharply from 2018 to 2020, which shows that Kido's sales policy is
more and more positive compared to previous years.

1.1.4. Inventories

From 2018-2019, the company's inventory decreased from 1,195 billion to

907,997 billion VND. The percentage of inventory to total assets also decreased
from 9.54% to 7.61%. The value of raw materials was 687.298 billion VND in
2018 and this amount decreased to 444.810 billion VND in 2019. The
percentage of the total inventory also had the same trend, from 57.38% to
48.98%. The cause of this problem is the great volatility of the world cooking
oil price, which has helped the company to have the advantage of low inventory
price while it continuously increased during last months.

From 2019 to 2020, inventory also increased by about 303,418 billion

VND, corresponding to 9.81% of total assets, mainly in finished products (from
205,240 billion to 349,131 billion VND) and goods in transit (from 67,091
billion to 152,387 billion VND). KDC operates in multiple sectors, this
percentage seems quite low; but this is reasonable. In fact, KIDO's inventory
value is not a big concern as it only accounts for about 16%-19% of COGS in
recent years. It is very necessary to make provision for KIDO's inventory

5
devaluation when the price of input materials for production has continuously
fluctuated sharply in recent times.

1.2. Non-current Assets

1.2.1. Fixed Assets

Kinh Do's business activities are to produce, buy and sell food, raw
materials, and manage investments in subsidiaries, so the structure of non-
current assets accounted for most of all, with 57.46%, 58.83%, and 55.64%
respectively over the 3 years. In which, the proportion of long-term financial
investment accounts for the majority, at an average of over 29%; while fixed
assets accounted for about 22% in the given time.

Specifically, in 2019, the fixed assets of the company reached 2,851 billion
VND, accounting for 23.90% of total assets. In which, tangible fixed assets and
intangible fixed assets accounted for 7.16% and 16.73% of the total assets
respectively. In comparison with that of 2018, which has decreased by 192
billion VND, or a reduction rate of 6.31%. Over this period, tangible fixed
assets tend to decrease; of which 51.52%% is machinery and equipment,
43.64% is from buildings and structures, the rest is from transportation vehicles
and office equipment. In terms of total intangible fixed assets, land use rights
account for 37.80%. Next is the brand value with 21.45%, the rest is the
advantage of leasing land, customer relationship, and computer software.

In 2020, fixed assets experienced a decrease of 175 billion VND, the

proportion also decreased to 21.67% of total assets. During a period of 2019-
2020, tangible fixed assets also showed the same trend; in which, 48.81% came
from machinery and equipment, 47.30% from buildings and structures, the rest
came from transportation vehicles and office equipment. The allocation of
intangible fixed assets amounted to 70.92% of the total fixed assets, 0.9%
higher than that of 2019, the land use rights and brand value similarly accounted

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for the majority of the advantages of land lease and customer relationship, and
computer software.

The main reason for these declines is mainly due to increased depreciation
and liquidation of tangible fixed assets. Specifically, the company has sold off
machinery and equipment, liquidated houses and structures, it seems that the
business is intending to reduce production or need to meet liquidity to pay long
term debts in this period.

2020 2019 2018

Fixed assets investment: Total 34,76% 34,97% 36,41%

fixed assets/Equity

Regarding the structure of fixed assets for a multi-business enterprise as

Kinh Do, the intangible assets allocation of two-thirds of the total fixed assets is
appropriate; especially in the context of the market economy with high
volatility, this allocation tends to increase. Considering that the fixed asset
investment coefficient of the company in 3 years is relatively large. Although
there was a slight decrease from 36.41% in 2018 to 34.97% in 2019, and
reached 34.76% in 2020, it shows that the company still has a tendency to invest
in the future to create leverage in business. Besides, the risk in business is high.

1.2.2. Long-term Investments

Long-term financial investments in all three years accounted for the

majority of total assets, with the proportion of 28.47% in 2018, increasing to
31.14% in 2019, and accounting for 30.40% in 2020. In which, mainly are
investments in associates and joint ventures jointly controlled, specifically,
more than 50% of investments are in Calofic, about 29% in Lavenue; the rest in
LG Vina, Phong Thinh and Dabaco Food. For an enterprise dealing in diverse
products and categories as Kinh Do, With the plan to promote the strategy and

7
the goal of building a convenient shopping cart with a variety of product
categories to meet the diverse needs of consumers, this investment structure is
quite reasonable for Kido Group Corporation.

2. Capital Structure Analysis

2020- 2019-
Assets 2020 2019 2018 2019 2018
37,65 31,65
Liabilities % % 33,32% 23,12% -9,57%
Current liabilities 30,81% 22,50% 21,03% 41,73% 1,86%
Non-current liabilities 6,84% 9,15% 12,29% -22,64% -29,13%
62,35 68,35
Owners’ equity % % 66,68% -5,59% -2,43%
Owners' Capital 62,35% 68,35% 66,68% -5,59% -2,43%
Total liabilities and
owners’ equity 100% 100% 100% 3,49% -4,80%

Table 2: Capital Structure

2.1. Liabilities

Overall, in 2018, Kinh Do's total liabilities was more than 4,176 billion
VND, accounting for nearly 50% of the total capital structure. By 2019, this
figure decreased to 3,776 billion VND, but in terms of the proportion of capital
structure, it decreased by 3.37%, making Kinh Do's debt ratio in 2019 reduced
to approximately 0. 23. By 2020, total liabilities will exceed 2018's level of
more than 4,649 billion VND, equivalent to an increase of more than 10%.

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 Specifically, in the period of 2018-2020, Kido applied policies to increase
the proportion of liabilities to implement financial policies. At the time of
making financial statements in 2018, the total liabilities of the enterprise is
about 4,176 billion VND, accounting for 49.96% of the total capital. However,
until the end of 2020, this figure of the enterprise has increased to more than
873 billion VND, approximately 4,649 billion VND equivalent to a speed of
3.1%.

Specifically, the changes in the items are as follows:

2.1.1. Short-term Liabilities

At the end of 2018, Kinh Do's total short-term debt was 2,635 billion
VND, accounting for 31.81% of the total value of capital. After 1 year, the
short-term debt value was more than 49 billion VND compared to 2018,
accounting for 22,5% of the total value of capital, this figure increased to 3,805
billion VND in 2020 compared with the end of 2019, corresponding to an
increase rate of 6.97%. In which all constituent items increased in value, the
values of other equity, investment and development fund, and short-term
provision decreased, although this item only accounted for a relatively small
proportion in total capital, but it also shows the volatility of the capital use trend
of the enterprise. The increase in payable expenses from 2019-2020 (360 billion
to 545 billion VND) increases capital for production and business activities of
enterprises, helping businesses have the opportunity to access capital at the
lowest cost. However, if the capital is occupied for too long, the supplier may
have an unfriendly view of the business, leading to the cessation or difficulty of
supplying raw materials and products to the enterprise. The increase in short-
term debt shows that the enterprise has not paid attention and performed well in
paying these debts. The proportion of items in short-term debt is quite large,
which proves that enterprises have not really limited the use of short-term loans
or appropriated external capital to serve production and business.

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 2.1.2. Long-term Liabilities

From the end of 2018 to the end of 2020, the value of long-term debt
decreased 2 times, from 1,540 billion VND (accounting for 18.43% of the total
source) to 844 billion VND (accounting for 10.9% of the total source) total
equity. The value of long-term debt has decreased, corresponding to a decrease
of 54.8%. The reduction of long-term debt is the main reason leading to the
reduction of the enterprise's liabilities. The decrease in long-term debt was
mainly due to the decrease in the item "long-term loans", which is because the
business has paid off bank loans when due and has not yet borrowed more.
However, long-term debt only accounts for a small proportion of the total
capital, so this is not an important item for the capital of the enterprise, showing
the risky financial policy of the enterprise when using the principal mainly
equity to serve production and business activities.

Kinh Do's liabilities increased during the two years from 2019 to 2020,
which is completely consistent with the volatile economic situation, the
Government's tightening monetary policy and the unstable lending interest rate
of the Government banks in these 2 years because of the global impact of the
COVID-19 pandemic.

2.2. Owners’ Equity

The owner’'s equity in 2018-2020 decreased from 8,358 to 7,699 billion

VND, equivalent to a reduce in the proportion of total capital from 66.68% to
62.35% respectively. In 2020, owner’s equity decreased sharply compared to
2018 and 2019 due to the fact that other owner’s equity remained unchanged at
nearly 16 trillion VND. Undistributed profit after tax decreased by 55.77%. The
increase in total capital is due to the impact of many factors, including the
capital structure strategy. In 2020, owner’s equity decreased mainly in retained

10
earnings. Specifically, in 2020, undistributed earnings decreased by 55.77%
compared to 2019 and decreased by 59.28% compared to 2018. Retained profits
of 2019-2020 accounted for 15.92%, 15.92%, and 6.80% respectively of total
assets. This figure has decreased by 9.12% but accounted for quite a lot of the
total assets of the business, which shows that KDC's equity is still at a stable
level.

Kido's total capital, owner’s equity accounts for the majority, thus showing
a stable level of financial self-sufficiency and financial independence of the
Enterprise. The portion of undistributed earnings this year is less than the
previous year, possibly because the business results in 2020 are worse than
those of 2018 and 2019.

2.3. Capital Security (Liabilities vs Owners' Equity)

2018 2019 2020

Liabilities/Owners’ Equity
0.5 0.46 0.6

Short-term loans/ Total L&O

14% 14% 21%

Current Liabilities/Liabilities 63% 71% 82%

Table 3: Capital Security
Kinh Do's debt to equity ratio over the years is less than 1 and relatively
low (in 2018 it is 0.5; 2019 is 0.46 and in 2020 is 0.6) showing that the
company is less dependent on creditors and has a high degree of financial
independence. In addition, the company has many opportunities to receive loans
from credit investors due to its low debt-to-equity ratio. Therefore, it can be
assessed that the company has a prudent and safe policy of using capital that
does not use a lot of liabilities to finance its assets. However, Kinh Do's debt-to-
equity ratio tends to increase, increasing by 23% in 2020 compared to 2019
showing an increasing trend in corporate debt.

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 Short-term loans mainly come from bank loans, long-term bonds to
maturity, and long-term loans to maturity. The major objective of short-term
unsecured loans from commercial banks is to provide working capital for
enterprises. In 2018 and 2019, this fraction of total capital was only 14%.
However, by 2020, this percentage will have risen to 21%. Short-term debt to
total liabilities makes for a significant share of total liabilities; in 2018, it was
63 percent, in 2019 it was 71 percent, and in 2020 it will be 82 percent, up over
20 percent from 2018. As a result, it is clear that the demand for short-term
payment for items such as Board of Directors salaries, payable dividends, Social
insurance, health insurance, and unemployment insurance, among other things,
has increased. It demonstrates that the company's capital is exposed to
significant risks and has a poor level of financial independence. 

3. Business Performance Analysis

2020- 2019-
2020 2019 2018 2019 2018
Revenue from sales 101,71% 101,67% 101,47% 15,49% -5,06%
Deductions 2,17% 2,16% 1,77% 18,21% 7,42%
Net income 100% 100% 100% 15,45% -5,24%
Cost of good sold 78,80% 77,38% 82,98% 17,56% -11,63%
Gross Profit 21,20% 1,88% 3,02% 8,22% 25,91%
Finance income 0,97% 1,88% 3,02% -40,31% -40,97%
Finance expenses 1,73% 2,22% 2,35% -10,03% -10,47%
Selling expense 12,55% 15,52% 13,82% -6,71% 6,49%
General &
Administrative
Expense 5,07% 6,51% 5,42% -10,06% 13,74%
Net Operating profit 4,90% 3,58% 2,19% 58,07% 54,64%

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 Other income  0,16% 0,53% 0,22% -65,28% 123,23%
Other expenses 0,06% 0,18% 0,10% -60,59% 73,15%
Other profit 0,10% 0,35% 0,13% -67,64% 161,43%
Profit before tax 5,00% 3,93% 2,32% 46,86% 60,48%
Current income tax
expense 1,02% 1,37% 0,20% -13,60% 532,82%
Deferred tax income - -
(expense) 0,01% -0,31% 0,18% 103,62% 267,45%
Net profit after tax 3,97% 2,87% 1,94% 59,34% 40,39%
Table 4: Vertical Income Statement
3.1. Revenue

KDC's Revenue Structure

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2020 2019 2018

Cooking oil _x0008_Food industry

The global economy slowed in 2019, and the global trade system was
insecure and unpredictable, badly impacting businesses throughout the world
and rendering the Vietnamese market insecure. However, the Vietnamese
economy still has several bright spots, such as a rise in GDP, a boost in people's
income, which has contributed to rising demands for quality and nutrition, as
well as food safety, convenience, and speed. In general, KDC's net revenue

13
declined somewhat in 2019, from 7,608 billion to 7,210 billion VND, a decrease
of 5% from 2018. Due to severe industry competition, KIDO's sales in 2019
was slightly lower than in 2018, and they were currently restructuring products
into the high-end market in order to increase the profit margin. In comparison to
2018, the cooking oil business dropped by 4.5%, the food industry climbed by
4.5%, especially due to the ice cream products which grew rapidly from 1,032
billion in 2018 to 1,257 billion VND in 2019.

In the period of 2019-2020, the cooking oil division generated the majority
with an average of 87.10% of KDC's net sales. The revenue structure of the
food segment also climbed to 18.3% during that time. KDC’s net sales was over
8,323 billion VND, 15.45% higher than last year. In general, KDC's business
activities grew at a decent rate and were in line with the global economic
condition in general and Vietnam in particular over the period. In the future,
according to strategy, KDC will focus on increasing and developing the frozen
food segment in the future, with the goal of being present in the fresh, frozen,
and canned food segments.

The complicated epidemic situation in the world has had a huge impact on
the economy in general and the FMCG business in particular. Although the
economy continued to confront numerous challenges, thanks to the
government's efforts to control the economy and solid foundational strength,
KIDO still continued to grow steadily.

3.2. Expenses structure

14
 KDC's Expenses Structure
90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2020 2019 2018

COGS Finance expenses Selling expenses G&A expenses

3.2.1. Cost of Goods Sold

In 2019, the cost of goods sold fell sharply, more than doubling the rate of
decline in net revenue. This has demonstrated the company's good management
efficiency in cutting costs. However, by 2020, COGS will increase faster than
net revenue. Net sales increased by 15.45% while COGS increased by 17.56%.
The main reason is that the cost of raw materials increased from 4.345 billion
VND to 5.987 billion VND (in 2020).

Compared with the average COGS of 3 companies in the same

confectionery industry, Bibica, Hai Ha, and Bao Ngoc, it is 72.06% in 2018 and
81.04% in 2020. It can be seen that KIDO's COGS management is pretty good.
While businesses in the same industry have tended to increase COGS in recent
years, KIDO always tries to reduce and optimize this amount.

3.2.2. Selling Expense

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 In 2020, sales costs were 1044 billion, accounting for 12.55% of total
revenue. Sales costs on net revenue tend to decrease in the period 2018-2020
from 13.81% to 12.55%. The reason is that businesses reduce costs for
advertising and promotion items.

While revenue decreased, the sales cost of a typical sales channel of Kido
Kidofoods increased to 284 billion VND in the first half of 2018. The
proportion of selling expenses on revenue has increased to 40% from 36% last
year. This may be the impact of the launch of the company's new products
during this period.

The trend of increasing the proportion of costs may continue to increase

when the company said that in order to maintain the lead position, it will
continue to develop new products, expand distribution channels and increase
pouring at the point of sale.

3.2.3. General & Administrative Expense

Business management costs of Kinh Do fell from 469 billion in 2019 to 412
billion VND in 2020, which is due to the situation of Covid 19 outbreaks, so
business must cut the costs as much as possible. In particular, Kido implements
a payout of salary cuts, reducing out-of-purchase costs, taking advantage of
available resources, simplifying management, solving gaps in insurance
management… In this case, the work of reducing administrative costs is
essential to maintaining an efficient business.

3.3. Net Income

Thanks to the product portfolio optimization strategy, focusing on

promoting core products, not going in the direction of mass as before, and
deciding to actively stay out of the sales race, eroding profits. In 2019, Kinh
Do's pre-tax profit increased by 60.48%, from 177 billion VND in 2018 to 283
billion VND. Of which, the proportion of the cooking oil industry increased and

16
the ice cream industry increased to 13.9% and 62.7% respectively of revenue.
Deducting costs, the profit after tax increased by 40.4%. Despite a drop in net
sales and an increase in operating expenses, KDC was able to leverage its scale
and operations to significantly improve profitability. In the period of 2019-
2020, although KDC recorded growth in revenue, expenses also increased; but
thanks to strategic acumen, timely grasping of good signals from the essential
food sector, profits before tax of the business reached 416 billion VND,
increased by 46.86%. Accordingly, profit after tax reached 330 billion VND,
corresponding to a growth rate of 59.3%. It can be seen that during this period,
KDC also invested a lot in planning and improving the factory, training to
improve the sales team, and promoting distribution channels, expanding the
sales scale... in order to promote increased revenue, optimize costs to increase
profits.

4. Cash Flow Statement

17
 KDC's Cash Flow
1,200,000,000,000
1,000,000,000,000
800,000,000,000
600,000,000,000
400,000,000,000
200,000,000,000
0
2018 2019 2020
-200,000,000,000
-400,000,000,000
-600,000,000,000
-800,000,000,000

Cash flows from operating activities

Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at the end of the year

In general, the cash flow at the end of the period for all 3 years of the
enterprise is positive, and positive at a high level. This shows that KDC always
has an abundant source of money to serve the effective operation of the
business, especially in 2020 with double the figure 2 years ago.
2020- 2019-
2020 2019 2018 2019 2018
Cash Flow from
Operating Activities 1,17% 4,15% -1,14% -67,6% -446,57%
Cash Flow from
Investing Activities 4% 4% -9% 27,64% -139,08%
Cash Flow from -
Financing Activities 1,77% -9,45% -5,35% 121,58% 67,26%
Table 5: Cash Flow Statement
4.1. Cash Flow from Operating Activities

18
 Although profit before tax in 2018 was recorded as positive, KDC's cash
flow from production and business activities was negative at 86 billion VND
due to an increase in inventories compared to the beginning of the year. Mainly
backlog in the raw material stage; this proves that the production cycle of goods
is being prolonged, the inventory management of enterprises is still not good,
leading to stagnant cash flow of enterprises.

In addition, in 2018, KDC recovered the receivables from the beginning of

the year with a total value of nearly 270 billion VND. But because of the large
reduction in payables, KDC had to rely less on deferred purchases to finance its
operations compared to the previous year, so its cash flow from operations was
affected.

During the period of 2019-2020, the KDC’s cash flow from operations was
positive, which partly shows the efficiency in business activities of the
company. In 2019, this figure was recorded at 299 billion VND, 446% higher
than the previous year. It can be seen that despite a slight decrease of 5.24% in
revenue, KDC still had a high positive cash flow. The main reason was the
decrease to 286 billion VND in inventory, resulting in only about 2.4 billion
VND in additional receivables of the business. This is a very positive sign when
it shows that the enterprise has taken actions to promote production, effectively
changed the inventory management structure. Then, leading to the inventory in
the form of raw materials significantly reduced year-on-year, by 50%.

2020 is the year that KDC in particular and manufacturing enterprises in

general has been affected by the Covid-19 epidemic. Specifically, the pandemic
has impacted on customer access, and businesses' supply chains also being
disrupted. In addition, KDC was also affected by other problems such as
reducing orders, reducing output, and incurring additional costs to prevent the
Covid-19 epidemic. However, KDC still has the ability to continue to generate
both profit and positive cash flow at 97 billion VND for production and

19
business activities. Of which cash inflow out of KDC's total net revenue was
11.66%, and cash outflow was 10.50%. Compared to the revenue growth rate of
15.45%; cash flow accounted for a low proportion, only 1.17% of revenue. The
main reason is a rapid increase in inventories (with more than 302 billion
VND), which are mainly finished products and goods in transit. However, in
terms of context, businesses have also made timely preparations and responses
to the impacts of the pandemic and brought good signs for businesses in the
difficult situation of the global economy.

4.2. Cash Flow from Investing Activities

Cash Inflow

The cash inflow into Kido's investment is VND 1,574 billion in 2018,
corresponding to 20.7% of the total net sale. After that, this data increased
sharply after 1 year to VND 3,520 billion, equivalent to 48.83% in 2019. The
reason was that in the period of 2018–2019, Kido released ice cream and
cooking oil, causing revenue to skyrocket and attracting foreign investment,
such as the Malaysia Investment Fund, wanting to buy 100% of KD's ice cream
industry for $200 million (equivalent to over 4,500 billion dong). A Japanese
company also wants to buy the remaining 35% of KD's stock at a much higher
price than the expected floor price (VND 52,000 per share).In addition, the
number of dividends and interest rates received in the last two years increased
sharply from VND 271 billion to VND 329 billion, equivalent to 21.6%. The
amount obtained from the sale of investment in other entities decreased sharply
in the 3 years from 2018 (VND 186 billion) to VND 493 million in 2020. This
shows that the policy of paying and attracting investment capital is very
effective (foreigners hold about 20% of shares in KDC and domestic individuals
hold about 15% of enterprises). Through M & A deals in the cooking oil
industry and concentrating on the development of ice cream, by the end of
2020, KDC has become the company leading the ice cream industry and ranked

20
second in the cooking oil industry, occupying the market share of 43.5% and
30%. The cash flow of the company has grown again in the period of 2019–20,
up 280% in 2019 and 38% by 2020.

Cash Outflow

In 2018, KIDO's investment cash outflow was VND 2,244 billion, with
term deposit payments accounting for 90% of the total, and buying and building
fixed assets accounting for only 3.5%. Following that, the figure soared to VND
3,259 billion in 2019, with term deposits accounting for 37.4% and investments
in other organizations accounting for 61.3%. Furthermore, throughout the
period 2018-2019, KIDO saw excellent growth in the cooking oil area, therefore
cash flow was mostly utilised to profitably invest in subsidiaries. Focusing and
expanding the food business to meet the demands of people's daily life,
especially when the Covid-19 pandemic unfolds in 2019.

KIDO's investment capital flow was cut to approximately 707 billion VND
by 2020. Fixed asset purchases and construction totaled 101 billion VND, up
double from the previous year. KIDO is focusing its efforts on the purchasing
and building of fixed assets, as well as the installation of extra machinery and
services to boost productivity. Furthermore, this demonstrates a shift in system
organization, with the parent business overseeing product distribution and sales
and production divisions.

4.3. Cash Flow from Financing Activities

Net cash flows from financial activities of both 2018 and 2019 were
negative at 407.19 billion and 681 billion VND respectively. The main reason is
that the company repays the borrowings. It can be seen that, although there is a
borrowing in 2018 and 2019, it is approximately equal to or lower than the
repayment amount.

21
 On the other hand, in 2020, the new borrowing is larger than borrowings
repaid by 17.3 trillion VND despite the positive net cash flow of 146.9 billion
VND. At this time, the financial situation of the business is not as good as it was
two years ago.

In the cash flow of financial activities, it can be seen that cash flow from
Redeem share from non-controlling interest increased sharply after 2 years from
94.5 million VND in 2018 to 1.98 billion VND in 2020. Besides, dividends paid
to shareholders and non-controlling interests are always maintained and
increased over the years. This shows that KIDO's business activities are having
good results.
III. FINANCIAL RATIOS

1. Activity Ratios

1.1.Inventory Turnover

Activity Ratios 2020 2019 2018

Inventory turnover 6,19 5,30 5,69

Days of inventory on hand (DOH) 59 69 64

Kido Group's inventory turnover in 2019 decreased compared to 2018, but in

2020 it increased sharply. It seems that KDC's goods consumption rate was
showing signs of slowing down compared to the company's production rate.
This greatly affected the company's operations, and was mainly caused by a
sharp increase in ending inventory (mainly in the stage of finished goods),
because the supply chain of the enterprise was disrupted. due to the impact of
the Covid 19 pandemic.

This can be explained by the fact that KDC has actively invested in a new
factory system in 2020 to increase output compared to previous years and sign
many orders at the end of the year. The frequent change of inventory turnover

22
over the years may be due to the company's lack of good management of its
sales and production. However, the inventory turnover rate is generally large
enough that the company can ensure the level of production to meet customer
demand. The 3-year uptrend of this index also shows that KDC has made great
efforts in controlling sales activities and inventory management, while
optimizing backlogged goods.

1.2. Receivable Turnover

Activity Ratios 2020 2019 2018

Receivables turnover 13,76 12,56 12,97

Days of sales outstanding (DSO) 27 29 28

The average debt was nearly 30 days, specifically in 2020, the receivables
turnover reached about 14 rounds, corresponding to the number of collection
days of 27 days, somewhat faster than in 2019 with 13 rounds corresponding to
29 days. The reason is that in the year the company boosted sales to achieve the
revenue target, which was reflected in the very good revenue growth rate of
KDC at 15.45%. There was strong competition from distribution and pricing
strategies in the industry. Typically, a large company like Cai Lan, which holds
up to 50% of the market share in the cooking oil industry, was continuing to
promote a competitive price strategy in order to maintain market share. In
addition, in comparison with other companies in the same food manufacturing
industry in the Vietnam stock exchange, the management of receivables of KDC
is assessed at a good level.

In general, both indexes: inventory turnover and receivables turnover tend to

increase in consensus after 3 years.

1.3. Payable Turnover

Activity Ratios 2020 2019 2018

23
Payables turnover 14,47 11,91 12,18

Number of days of payables 25 31 30

The business's payables turnover in 2020 increased significantly after 2 years,

from nearly 12.2 rounds to 14.5 rounds a year. Correspondingly, KDC's
repayment time decreased significantly from 30 days to 25 days. Considering
low-capitalized confectionery companies like Bibica, the payables turnover is
quite low (less than 8 rounds), corresponding to a repayment period of more
than 40 days. As a result, KDC's average short-term loan repayment period is
low compared with peers in the industry, which has no impact on the company's
assessment of its solvency. This reduction also shows that the company is very
reputable and does not have to rely too much on allowing deferred payments
from suppliers. Although the liabilities in the period 2019-2020 increased by
51.23% (an increase of more than VND184 billion), the company still showed
very good debt payment ability.

1.4. Working Capital Turnover

Activity Ratios 2020 2019 2018

Working capital turnover 1,05 0,87 0,94

Kido Group's working capital turnover in 3 years has had slight fluctuations,
generally at approximately 1 round. However, in the period of 2018-2019, the
number followed a downward trend, from 0.94 to 0.87 round. The main reason
is that receivables increased by 189% in 2019, making the ability to slowly
recover capital, directly affecting business activities as well as working capital
management, and leading to capital turnover. In the period of 2019-2020, KDC
has made positive efforts in capital turnover, when the number of rounds
increased slightly from 0.87 to 1.05 rounds thanks to an increase in the cash of
110%. In comparison with companies in the Vietnamese bakery industry, such
as Hai Ha (working capital turnover 2018-2020 was 2.64-3.13), this coefficient

24
of KDC is still very low. Partly due to the large capitalization and
diversification of categories, large business scale instead of focusing only on
confectionery production.

1.5. Fixed Asset Turnover & Total Asset Turnover

Activity Ratios 2020 2019 2018

Fixed asset turnover 3,01 2,45 2,89

Total asset turnover 0,69 0,59 0,64

KDC's fixed asset turnover increased slightly from 2.89 times to 3.01 times in
the period of 2018-2020. During this time, KDC continuously reduced fixed
asset investment at 6.14% - 6.31%; but in general, revenue still grew at a good
rate (about 9.4% after 3 years). This shows that Kido Group has managed and
structured fixed asset investment reasonably with a clear orientation,
anticipating the risks and benefits when making investment. Therefore, the
structure of total fixed asset turnover also increased correspondingly from 0.64
times in 2018 to 0.69 times in 2020.

However, compared to the data of another confectionery manufacturing

company in Vietnam, Hai Ha, in the same period of 2018-2020, the efficiency
of using fixed assets and total assets was 4.64-6.66 and 1.29-1.21 times
respectively. KDC exhibits a relatively low intensity of the business, however
has potential for future growth.
2. Liquidity Ratios
III.1. Current Ratio and Cash Ratio

Liquidity Ratios 2020 2019 2018

Current ratio 1,44 1,83 2,02
Quick ratio 1,08 1,43 1,39
This ratio measures liquid assets, the type of assets expected to be consumed or
converted to cash within a year, in relation to short-term liabilities that are

25
gradually reduced over a year. A higher ratio indicates a higher level of
liquidity. The quick ratio is more conservative than the current ratio because it
only includes liquid assets with higher liquidity (sometimes referred to as
"quick assets") than short-term liabilities. Like the current ratio, a higher quick
ratio indicates higher solvency.

As can be observed from the financial statement of the company. The current
ratio and quick ratio decreased noticeably in the period of 3 years, dropping
down to 1.44 and 1.08 respectively at the end of 2020. 

The current ratio in 2018 was 2.02, indicating the company has good ability to
pay its short-term debts. After that, this index dropped to 1.83 in 2019 and 1.44
in 2020. The Company continuously kept short-term debt solvency low, the
liquidity of short-term assets gradually became less effective. However, in
general, this coefficient is larger than 1 year by year, and KDC still has a good
ability to pay short-term debt..

Quick ratio still stays above 1, showing that the company has quick payment
ability. However, in 3 years this figure has tended to decrease sharply, if this
index falls below 1 company will no longer be able to make quick payments.
The most reasonable explanation is the company's increase in short-term
liabilities (From 2,635 billion in 2018 to about 4 billion in 2020), in which the
company increased short-term bank loans. This shows that the company's ability
to quickly pay its current debts is gradually becoming less secure. Causing
credit risk in business, losing confidence of investors and creditors of the
company.

III.2. Cash Ratio

Liquidity Ratios 2020 2019 2018

Cash Ratio 0,47 0,42 1,03

26
Cash payment ratio decreased sharply in the period 2018 - 2020. This ratio of
the company in 2020 is quite low, only 50% compared to 2018. However, the
ratio of cash payments in 2019 and 2020 are both approximately 0.5 within the
acceptable range. Proving that in the period of 2019-2020 when the economy is
in crisis (specifically the Covid 19 pandemic), KDC has difficulty in consuming
inventory as well as collecting receivables.
3. Solvency Ratios
3.1. Debt-to-assets Ratio

Solvency Ratios 2020 2019 2018

Debt to Total Assets 37,65% 31,65% 33,32%

The debt-to-asset ratio decreased slightly from 33.32% in 2018 to 31.65% in

2019, followed by an increase to 37.65%. This indicates that about 35% of Kido
Company was talented loan aid and 65% of the company's assets are funded by
domestic and foreign investors, or equal to the equity. With the above ratio,
Kido is in a healthy state and on momentum. This rate of Kido is good and less
likely to risk than other companies and other industry companies, such as Huu
Nghi Company, with a ratio of 2: 1 (according to the first half of 2019, Huu
Nghi has more than $1000 billion in assets, but most are financed by payable
debt, accounting for 77% of total capital, and total bank loans account for 87%
of the liabilities). In addition, Hai Ha Company, the total number of assets of
the company is 224,396 million VND, with the state capital accounting for 51%
and the capital of shareholders accounting for 49% of the total assets. Hai Ha
company, with a debt ratio on total assets of 0.62 years in 2019 and 0.61 years
in 2020, doubled compared to that of Kido, with 98% fluctuations.

3.2. Debt-to-equity Ratio

Solvency Ratios 2020 2019 2018

27
 Debt to Equity 60,39% 46,31% 49,96%

As can be seen from the table, KIDO's debt-to-equity ratio has increased over
the last 3 years and reached 60.39% in 2020. There are several reasons for the
increase in debt leverage. Firstly, KDC extended the time it took to pay off
some of its outstanding debt until the end of 2020 after selling more stocks than
43.3% of the market. I can see extending the attendance time. The average ants
in terms of outstanding debt handling are every 6 months. Kido has pushed off
until the end of the year to promote inventory at the same time. In addition,
KDC has made more investments and borrowed more funds to finance its
expansion and new product development in the ice cream and cooking oil
segments in recent years. Secondly, KDC has reduced its equity issuance in
recent years to borrow capital and invest in expansion. The increase in equity
was aided by a 100 percent increase in treasury shares.Non-controlling
shareholder interest fell by 1.53 percent in 2019, while undistributed after-tax
earnings increased by 50.03 percent.In addition, by 2020, the decrease in equity
was due to the fact that other funds under equity remained unchanged at VND
15,909,752,661 million. Undistributed profit after tax decreased by 55.77%;
non-controlling shareholder interest increased by 5.99%. This approach makes
sense as KDC's stock price has changed significantly. In addition, equity is less
risky than debt because KDC does not have to pay back the capital obtained
through equity. The only downside to equity is that it takes control of the
company.

3.3.Debt-to-capital Ratio

Solvency Ratios 2020 2019 2018

Debt to Total Captital 37,65% 31,65% 33,32%

Debt-to-capital ratio in the period of 2018-2019 constituted 33.32%, but this

figure later improved to about 38% in 2020. It shows that KDC’s capital

28
structure is good enough and less likely to be risky than other companies in the
same industry. For instance, Hai Ha company, where the debt ratio on equity
was 1.66 in 2019 and 1.54 in 2020 fluctuating 93%, and this data is higher than
KIDO about 5 times. Hai Ha shows the level of much larger debt payment risk
than KIDO.

3.4. Financial Leverage Ratio

Solvency Ratios 2020 2019 2018

Financial leverage ratio 153,15% 148,16% 163,9%

Kido's financial leverage rate was 163.90% in 2018 and fell to 148.16% in 2019
and then rose again in 2020 to 153.15%. In terms of 3 years, this rate is reduced
to about 10.75%. This shows that Kido's leverage value is high and that it is
fully capable of paying interest. The long-term debt ratio of the company
decreased from VND 1,540 billion in 2018 to VND 844 billion in 2020. In
addition, the long-term loans of the company also decreased by 152.08% in 3
years. This is one of the main reasons that leverage is reduced. In addition,
Kido's equity decreased from VND 8,358 billion in 2018 to VND 7,699 billion
in 2020, corresponding to about 8.03% in 3 years due to income yet to be
distributed to the shareholder.

Coverage Ratios

EBIT interest coverage

Solvency Ratios 2020 2019 2018

EBIT interest coverage 4,37 2,84 2,14

Although the interest coverage ratio in 2018 and 2019 is considered low, it is
still at a safe level of greater than 2. This ratio increased rapidly and reached
4.37% in 2020, which proves that the ability of the enterprise to pay interest and
debt payments has a good sign, generating positive cash flows.

29
4. Profitability Ratios
Return on Sales

4.1. Gross Profit Margin

Profitability Ratios 2020 2019 2018

Gross Profit Margin 21,20% 22,62% 17,02%

In 2018, this index of the company is 17.02%, which means that every
VND100 of net revenue will bring about VND17.02 in profit. In 2019, this
index increased to 22.62%, proving that the profitability of the business is
increasing, 100 VND of revenue will generate 22.62 VND of profit. The main
reason is that the company has grown in the ice cream industry and succeeded
in the strategy of product premiumization. However, the growth rate of COGS
increased faster than the growth rate of net sales. (Net sales increased to 15.45%
while COGS increased to 17.56%). Due to the situation of Covid 19 epidemic,
the cost of raw materials was a sharp increase, mainly from the cooking oil
industry. This causes the gross profit margin to decrease slightly in 2020. This
trend shows signs of slowing down in growth. The same thing happens in some
other leading enterprises in the industry (e.g. Vinamilk, Bibica).

4.2. Operating Profit Margin

Profitability Ratios 2020 2019 2018

Operating profit margin 4,90% 3,58% 2,19%

Operating profit margin increased continuously year by year. From 2018 to

2020, it increased from 2.19% to 4.9%. Thanks to competitive advantages, such
as the successful restructuring of the group's operations, effective exploitation
of selling points in the cold goods industry, which have helped KIDO maintain
its leading position in ice cream market share with the rate of 43.5%. In
addition, by the end of 2020, Kido ranked 2nd in the cooking oil industry in
Vietnam, with a market share of about 30%.

30
 During this time, the group has proactively supplied goods, adjusted and
planned appropriate production to meet the needs of consumers in each region,
and at the same time optimized the distribution channel system. The distribution
has helped increase the operating profit of the business.

Compared with other companies in the same industry such as BBC, HNF,
HHC, KIDO's operating profit margin has a steady growth and higher than
others in 2020 while BBC's has dropped sharply from 8.93% in 2018 to 2.29%
in 2020, HNF and HHC also tend to decrease and reach only 2.85% and 2.9% in
2020.

4.3. Net Profit Margin

Profitability Ratios 2020 2019 2018

Net profit margin 3,97% 2,87% 1,94%

It can be seen that the Net profit margin ratio has increased steadily over
the years. In 2018, for every 100 VND of net revenue, KIDO brought in 1.94
VND of profit after tax. This ratio increases to 3.97% in 2020, proving that the
profitability of the business is increasing, 100 dong of net revenue will generate
3.97 dong of profit after tax. From the increase in revenue, and the effective and
reasonable cost management, the net profit margin of the business has grown
steadily.

Net profit margin of some corporations in the same industry:

2020 2019 2018

BBC 7,93 6,35 7,70

HHC 2,77 3,9 4,28

HNF 2,15 2,35 2,49

31
Bibica Joint Stock Company has a higher net profit margin than other
companies in the same industry because the ratio of COGS to revenue of BBC
is lower than the industry average. Despite having a high net profit margin, by
2019, this ratio will decrease because the growth rate of net revenue is lower
than the growth rate of administrative expenses and COGS. In 2020, net profit
margin increased again, but the reason was not good business, mainly due to the
recognition of profits from the transfer of land use rights in Bibica.

In general, the net profit margin ratio of companies in the same industry has
been on a downward trend in recent years. In addition to the problem of the
disease situation affecting the net revenue of businesses, companies also have
many problems in managing expenses. Compared to these corporations, KIDO's
business results are very favorable.

Return on Investments

1. ROA

Profitability Ratios 2020 2019 2018

ROA 1,68% 0,48% 0,3%

Return on assets (ROA) increased from 0.3% in 2018 to 1.68% in 2020, which
shows the increasing profitability of corporate assets. The reason is that the
enterprise has well managed the asset turnover, making the capital turnover
ratio of the enterprise in 2020 to be 0.69 while the capital turnover ratio in 2018
and 2019 is 0.64 and 0.59 respectively. In general, the business is using assets
relatively efficiently.

ROA 2020 2019 2018

Net profit margin 3,97% 2,87% 1,94%
Total asset turnover 0,69 0,59 0,64

However, according to international standards, ROA > 7.5% is assessed as a

financially capable enterprise.

32
With Kido's ROA ratio a bit low compared to international standards, only
about 1.68%, however, ROA's profit margin has steadily increased over the
years and increased sharply in 2020 proving that the business uses assets more
efficiently, which is evaluated better than in 2018 and 2019. However, Kido's
ROA is still lower than other enterprises in the same industry. For instance,
VNM has always been at a stable level and increased steadily over the years,
specifically year In 2018, VNM's ROA reached 28.34% and is always a highly
appreciated company for its financial capacity.

2. ROE

Profitability Ratios 2020 2019 2018

ROE 2,57% 0,71% 0,48%

In general, the ROE of enterprises, although increasing gradually over the years,
from 2018 to 2020, is still at a very low level. In 2018, for every 100 dong of
equity, it generated 0.48 dong of after-tax profit, this rate will increase sharply
in 2020 for every 100 dong of equity, it will generate 2.57 dong of after-tax
profit. From this result, it can be seen that the enterprise has shown signs that
business activities are recovering, but at a low level. Compared with enterprises
of the same capitalization level such as BBC and HHC, ROE of 2 This business
tends to decrease from 2018 to 2020, but this ratio is still more than 3 times the
ROE of KIDO. This shows that the level of efficiency when using capital of
enterprises is still very low, although it has improved in recent years.

* Dupont Analysis

Dupont Analysis 2020 2019 2018

33
Net profit margin 3,97% 2,87% 1,94%
Total asset turnover 68,56% 58,94% 64,00%
Financial leverage ratio 153,15% 148,16% 163,90%
ROE 2,57% 0,71% 0,48%
ROA 1,68% 0,48% 0,30%

Dupont Analysis
180.00%

160.00%

140.00%

120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%
Net profit margin Total asset turnover Financial leverage ROE ROA
ratio

2020 2019 2018

From the Dupont table, ROE is affected by 3 factors:

Net profit margin

The stable growth of net profit margin is one of the main reasons for the
increase in ROE.

In 2018, KIDO's net profit margin was lower than that of peers. However, it still
grows steadily over the years and surpasses some enterprises such as HHC and
HNF in 2020 thanks to its strategy of developing distribution channels,

34
expanding markets, upgrading products, and planning and improving factories,
warehouses, and reorganizing sales team to boost sales.

Total Assets Turnover

In 2019, the total asset turnover ratio decreased as KIDO started to downsize the
business capital, causing net revenue to decrease to 5.24% while total assets
decreased to 4.08%. However, thanks to the effective restructuring, this ratio
has increased again and is 4.56% higher than in 2018. This shows that the
business is generating more revenue per asset unit. However, compared to other
enterprises in the same industry, KIDO's capital efficiency is not high, for
example, HHC has a total asset turnover of 1.21 rounds in 2020.

Financial Leverage

From the Dupont table, we see: ROA < ROE shows that the company has used
financial leverage, if revenue has increased, it can be seen that this leverage has
worked to improve the company's profits. In other words, KDC uses loans
relatively effectively. KDC's financial leverage in 2018 and 2019 is 1.64 and
1.48, respectively, with a downward trend. Meanwhile, net profit margin still
increased significantly, so financial leverage came into play and made KDC's
ROE slightly increase from 0.48% to 0.71% during this period. Instead of 1
dong of equity in 2018 generating 48 dong of profit, in 2019 1 dong of equity
was generating 71 dong of profit => showing that the enterprise uses equity
relatively efficiently and increases the profit of shareholders.

In 2019-2020, KIDO's financial leverage tends to increase from 1.48 to 1.53, net
profit margin also increases from 2.87% to 3.97%, ROE of the business
increases sharply from 0.71% to 2.57%. This proves that KDC's use of financial
leverage is effective in this period. In 2019, 1 dong of equity only generates 71
dong of profit, then in 2020, 1 dong of equity generates 257 dong of profit.

35
Therefore, the attraction of investors in the future is promoted due to the
increase in ROE in the period of 2018-2020, an increase in ROE is an
assessment of the business gradually maintaining stability, assessing business
strategies, and making good use of capital. profitable. In addition,
demonstrating financial potential and competitiveness in the large market. From
there, influence the investment decisions of investors

ROA & ROE comparison

20.00%

18.00%

16.00%
14.00% KDC's in 2018
KDC's in 2019
12.00%
KDC's in 2020
10.00% Consumer Goods Industry
Average
8.00%
6.00%

4.00%
2.00%

0.00%
ROA ROE

From the above analysis, it shows that ROA and ROE indicators tend to
increase over the years, but still lower than the average of the Consumer Goods
industry. This is easily explained because KDC is a large corporation, operating
in many different industries such as buying and selling agricultural products and
food, technology products and fabrics and investing in real estate… Currently,
KDC consumer goods industry has more than 300 distributors and 200,000
points of sale nationwide. Therefore, businesses incur a lot of operating costs,
so although ROE and ROA have increased steadily over the years, they are still
lower than the average of the Consumer Goods industry.

36
IV. CONCLUSION
After analyzing and evaluating Kido Group Corporation's financial
statements and ratios, we can draw a fairly clear and detailed view of the
company's financial position. For the three consecutive years from 2018, Kido
has fluctuated differently. When gross profit experienced an upward trend over
three years and further growth is expected in the future, the percentage indicates
that KDC is financially stable and has long-term growth potential. The company
has a specific plan to solve arising problems in the most effective way. In
summary, it can be seen that KDC is a typical Vietnamese enterprise in the
consumer goods industry. Kido provides high quality products and improves
people's lives. In the future, Kido has many opportunities to expand its business
scale further based on the current development.

V. REFERENCES
https://static2.vietstock.vn/data/HOSE/2018/BCTC/VN/NAM/
KDC_Baocaotaichinh_2018_Kiemtoan_Hopnhat.pdf

https://static2.vietstock.vn/data/HOSE/2019/BCTC/VN/NAM/
KDC_Baocaotaichinh_2019_Kiemtoan_Hopnhat.pdf

37
https://static2.vietstock.vn/data/HOSE/2020/BCTC/VN/NAM/
KDC_Baocaotaichinh_2020_Kiemtoan_Hopnhat.pdf

38