facilitate the interaction between t

provides investors with a liquid hose who need capital with those
market in which they can buy who have capital to invest
or sell shares Financial market
Stock Exchange purpose: to efficiently allo
allows the market value of shar cate savings to ultimate u
es to be established by the forc sers.
es of supply and demand St ock Mar k et
Physical asset vs. Financial asset
Hanoi Stock Exchange (HNX) - 2005
Fin an cial Mar k et Money market: trading in short-term
Vietnamese Stock Exchanges Money vs. Capital
Ho Chi Minh Stock Exchange Capital market: trading in medium or long term
(HOSE) – 07/2000
I PO market: company issue new share to
public for the first time to raise capital
Primary vs. Secondary
Definition: A market in which Going public: trading, transfering owner
prices are close to intrinsic v 5 types ship, provide liquidity to other investors
on secondary market
alues and stocks
Spot market: financial instruments are t
raded for immediate delivery
Spot vs. Futures
Future market: participants buy and sell commodity and f
utures contracts for delivery on a specified future date
Level of Market efficiency Mar k et Ef f icien cy Finacial Public market: wide range of investor (household, business, government)
Mar k et Public vs. Private
Private market: only institutions, no household sector

When markets are inefficient, investors may be

afraid to invest, leading to a poor allocation of
capital and economic stagnation

Standard CIT is 20%

CIT for oil and gas companies: 32% - 50% Corporate I ncome Tax
Taxes incentives Flow of Fu n ds

Employment and business: 5% - 35%

Personal I ncome Tax Tax es in VN
Other income is taxed at different rates

Special Sales Taxes

Other types of Taxes
Valued added taxes (VAT)
 Balan ce sh eet

Financial statements I ncom e st at em en t

Cash flow st at em ent

m easur e t he fir m’s abilit y t

o pay off debt s t hat ar e m
at ur ing w it hin a year

Liquidit y Rat ios

a com pany t hat has a cur r ent rat io / quick rat io > 1 is usually co
nsider ed less of financial r isk t han a com pany hav ing a cur r ent r
at io / quick rat io < 1

The quick rat io is consider ed m or e conser vat ive t han t he cur r ent rat io

show ing how m any t im es a com pany has

Asset m anagem ent sold and r eplaced invent or y dur ing a give
n per iod
Financial
Statements Ra t i o s 5 cat egor ies
a fast er rat io im plies st r ong sales or insufficient invent or y.

Analysis A debt rat io > 1 m eans a com pany has m or e debt t han asset s

Debt m anagem ent

Profit abilit y

How m uch invest or s ar e w illing t o

Market value pay
w / for $1 of ear nings / cash flo
book value equit y.

DoPont equation