HANOI UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF ECONOMICS AND MANAGEMENT

---ooo---

CORPORATE FINANCE

ANALYSIS OF FINANCIAL STATEMENTS OF

SAFOCO FOOD JOINT STOCK COMPANY

Lecturer: Nguyen Thuc Huong Giang

Full name: Luong Thi Mai Linh
Student ID: 20203226
Course code: EM3519E
Class code: 139091

Hanoi, February 2023

 OVERVIEW

Financial analysis of an enterprise is the process of comprehensively applying

scientific analysis methods to evaluate the financial status of an enterprise,
helping management entities with interests associated with the enterprise to
understand the financial status and financial security of the enterprise, accurately
predicting the financial future of the enterprise as well as the financial risks that
the enterprise may encounter; thereby, making decisions in accordance with their
interests. Subjects with interests attached to the enterprise and other related
subjects are interested in the financial activities of the enterprise and have the
need to use information. economic and financial information of the enterprise.
Each object is interested in a different perspective and with different goals.
Objects interested in the financial situation of the business include:
- Business managers
- Investors (including current and future shareholders)
- Credit providers for businesses such as banks, financial institutions, corporate
bond buyers, other businesses...
- Salary earners in the enterprise
- State management agencies;
- Financial analyst;
- ...
Different users of financial information will make decisions with different
purposes.

Part 1 : INTRODUCTION
1. General Introduction
Company Name Safoco Foodstuff Joint Stock Company
Short Name SAFOCO
Logo

Stock Code SAF

Headquarter No. 7/13 – 7/25, Kha Van Can street, Linh Tay ward,
Address Thu Duc city, HCMC
Phone 84–(8) 372 452 64
Fax 84–(8) 372 452 63
Email safoco@hcm.vnn.vn
Website http://www.safocofood.com

2. Milestone
o 1995: Established as Foodstuff Store No 4, the precursor of Safoco Foodstuff
Joint Stock Company;
o 1999: Renamed as Safoco Foodstuff Enterprise;
o 2005: Transformed into a joint stock company with a charter capital of
VND22 billion;
o 2006: Charter capital was increased to VND27 billion;
o December 2006: Listed on the HOSE;
o April 2010: Charter capital was increased to VND30 billion;
o May 2014: Charter capital was increased to VND59 billion;
o 2016: Charter capital was increased to VND79 billion;
o June 22, 2020: Increased charter capital to VND100.55 billion.
3. Industry and Business location
3.1. Industry
 - Producing and trading in products: noodles, vermicelli, noodles, rice paper and
similar products;
- Trading in food and food products, technology products, materials and other
installation equipment in construction;
- Restaurant business, mobile catering services;
- Trading in real estate, land use rights belonging to the owner, user or tenant;
- Transporting goods by road.
3.2. Business location
- Domestic market: The company has established and well exploited a nationwide
distribution network with nearly 6,000 sales points through traditional agents,
high-end supermarket channels (such as Coop Mart, Big C). , Vin Mart, Mega
Market, Saigon Satra, Aeon, Lotte Mart ...), convenience stores (Green
Department, Vissan, Vinafood Mart, G7 Mart, Saigon HD...) at the same time
constantly exploiting more grocery stores, retail outlets in remote areas, to
distribute Safoco products directly to consumers.
- Export market: Safoco's products have also penetrated into difficult markets,
requiring high quality such as: USA, Australia, France, Germany, Canada, Russia,
Norway, Sweden, Czechoslovakia, Korea, Japan, Asian countries...
4.Mission and Vision
Mission:
 -Becoming a leading enterprise in Vietnam in dry food production and
processing, providing products with high quality and value, ensuring food safety,
this is a special priority goal of Safoco because It is not only the responsibility of
the manufacturer, but also the decisive factor for the survival of the business.
 Continue to maintain and build a strong distribution system in domestic and
foreign markets, expand consumption network, increase market share and
maintain Safoco brand position in the market.
Vision:
 Maintain and fortify the system for managing quality in such a way that our
products by all means must meet the International Standard in quality ISO 9001
permanently so as to satisfy our customer’s need. It’s the only way to stabilize
the inland market and develop the foreign market.
 Safoco’s aim is also made as preparatory stage so as to be able to integrate into
the Asian sector (AFTA) and the WTO.
5. Organizational Structure

 The General Meeting of Shareholders: has the highest authority, deciding

on issues under the rights and duties prescribed by law and the company's
charter.
 Administrative Council : As the management agency of the Company,
Have full power on behalf of the company to decide on issues related to
the company's purposes and interests, except for matters under the
authority of the General Meeting of Shareholders.
 Supervisory Board: On behalf of the General Meeting of Shareholders,
supervises and evaluates the management and administration of the Board
of Directors and the Board of Directors in accordance with the provisions
of the Charter, Resolutions/Decisions of the General Meeting of
Shareholders and legal regulations.
 General Director: Managing the daily business of the Company; under
the supervision of the Board of Directors; take responsibility before the
Board of Directors and before the law for the performance of assigned
rights and obligations.
 Part 2 ANALYSIS OF THE FINANCIAL STATUS OF THE BUSINESS
2.1. Overall analysis of financial position through financial statements
In 2021, the Covid-19 epidemic has created unprecedented challenges for both
the economy as well as all businesses, Safoco Company is no exception,
improvising according to the actual situation, just in case. In the fight against
the Covid-19 epidemic, while maintaining production and supplying products to
promptly meet the market's sudden increase in demand, pay attention to health
care for workers, stabilize jobs, grow incomes, and increase income. Currently,
the sales and profit targets have all exceeded the set plan, paid the budget in full
and in accordance with regulations.
No. Target Unit 2020 2021 (%) implemented in
2021 with
Planned Implemented Planned Same
period in
2020
1 Production output Ton 15.094 16.000 16.151 100,94 107,00
2 Sales output Ton 15.373 15.500 17.393 112,21 113,14
3 Total revenue Mill.đ 1.081.936 1.085.000 962.447 88,70 88,96
4 Profit before tax Mill.đ 58.876 59.500 62.258 104,64 105,74
5 Profit after tax Mill.đ 46.759 49.412 105,67
6 Basic đ 3.952 4.177 105,69
earnings/share

In general, Safoco's financial situation in 2021 is healthy, safe, solvency is high,

capital is used more effectively.

2.1.1. Balance Sheet

No. 31/12/2020 31/12/2021 Difference
Amount % Amount % Amount % %
A.SHORT-TERM 186,736,294,009 83,43% 222,696,441,825 86,6% 35,960,147,816 19,26% 3,17%
100
ASSETS
I. Cash and cash 19,157,309,802 10,26% 47,523,486,911 21,34% 28,366,177,109 148,07% 11,08%
100
equivalents
II. Short-term financial 44,002,150,000 23,56% 104,002,150,000 46,7% 60,000,000,000 136,36% 23,14%
120
investments
130 III. Short-term 36,704,829,546 19,66% 30,960,759,561 13,9% (5,744,069,985) (15,65%) (5,76%)
receivables
140 IV. Inventory 86,030,188,175 46,07% 39,839,293,371 17,89% (46,190,894,804) (53,69%) (28,18%)
150 V.Other current assets 841,816,486 0,45% 370,751,982 0,17% (471,064,504) (55,96%) (0,28%)
200 B. LONG-TERM 37,086,978,429 16,57% 34,434,871,736 13,4% (2,652,106,693) (7,15%) (3,17%)
ASSETS
210 I. Long-term 39,000,000 0,1% 39,000,000 0,11% 0 0,1%
receivables
220 II.Fixed assets 36,592,245,485 98,67% 34,317,398,465 99,66% (2,274,847,020) (6,22%) 0,99%
260 III.Other long-term 455,732,944 1,23% 78,473,271 0,23% (377,259,673) (82,79%) (1%)
assets
270 TOTAL ASSETS 223,823,272,438 100% 257,131,313,561 100% 33,308,041,123 14,88% 0%
CAPITAL
300 C. LIABILITIES 70,910,872,109 31,68% 93,535,473,446 36,38% 22,624,601,337 31,9% 4,7%
310 I. Short-term debt 70,910,872,109 100% 93,535,473,446 100% 22,624,601,337 31,9% 0%
311 1. Short-term payables 11,462,115,278 16,16% 8,794,572,067 9,4% (2,667,543,211) (23.27%) (6,76%)
to sellers
312 2. Buyers pay short- 6,297,702,251 8,89% 11,498,715,569 12,29% 5,201,013,318 82.6% 3,4%
term advance
313 3. Taxes and other 4,236,042,970 5,97% 3,892,941,016 4,16% (343,101,954) (8.1%) (1,81%)
payables to the state
314 4. Payable to 27,028,806,132 38,1% 43,162,275,376 46,14% 16,133,469,244 59.7% 8,04%
employees
319 5. Other short-term 8,303,874,362 11,7% 12,708,291,172 13,6% 4,404,416,810 53% 1,9%
payables
323 6. Bonus and Welfare 13,582,331,116 19,18% 13,478,678,246 14,41% (103,652,870) (0.76%) (4,77%)
Fund
400 D.OWNER'S 152,912,400,329 68,32% 163.595,840,115 63,62% 10,683,439,786 6,7% (4,7%)
EQUITY
410 I. Equity 152,912,400,329 100% 163.595,840,115 100% 10,683,439,786 6,7% 0%
411 1. Owner's contributed 100,557,890,000 65,76% 100,557,890,000 61,46% 0 (4,3%)
capital
417 2. Development 299,682,094 0,2% 4,975,566,740 3,04% 4,675,884,646 1560% 2,84%
Investment Fund
420 3.Undistributed after- 52,054,828,235 34,04% 58,062,383,375 35,5% 6,007,555,140 11,54% 1,46%
tax profit
440 TOTAL FUNDING 223,823,272,438 100% 257,131,313,561 100% 33,308,041,123 14,88%

1. Analysis of Capital Sources:

-The company's total capital in 2021 is VND 257,131,313,561, an increase of
VND 223,823,272,438 compared to 2020 with an increase rate of 14.88%. In
which, liabilities increased by 22,624,601,337 VND with an increase rate of
31.9%. The proportion of liabilities in 2021 is 36.38%, up from 4.7% in 2020.
Owner's equity increased by 10,683,439,786 VND with an increase rate of 6.7%.
The proportion of equity is 63.62%, down from 4.7% in 2020. This shows that
the size of the company's capital has narrowed. The structure of funding has
changed, reducing internal capital mobilization, financial autonomy has
decreased.
- Liabilities:
 Short-term debt increased by 22,624,601,337 VND with an increase of 31.9%,
although the corresponding proportion decreased slightly from 99.61% to
99.27%, but still accounted for most of the proportion of liabilities. The
amount of prepaid buyers decreased the most, down 6.76%. Other short-term
debts tended to decrease, except for payables to employees, which increased
 sharply by 8.04%. Although the company's profit increased compared to the
previous year and the tax payable to the state tended to increase, the bonus and
welfare fund decreased by nearly 4.7%.
 Long-term debt is zero. The company does not use the policy of mobilizing
external loans, only using equity capital, so its level of financial independence
is high. The company is not under pressure of debt. The fact that businesses
have little debt initially makes investors feel secure, however, it is also
necessary to consider many other factors.
- Equity: an increase of 10,683,439,786 VND, the rate of increase of 6.7%. In
particular, the development investment fund increased strongly by 1560%,
showing that the company has focused on innovating, completely replacing
machinery and equipment, technological lines, researching and applying
scientific advances. techniques in production as well as improving the
professional qualifications of human resources, at the same time, supplementing
charter capital for enterprises. Undistributed profit after tax increased slightly by
1.46%.
2. Asset analysis:
From the above analysis we see:
At the end of 2021, Safoco's total assets under management and use are VND
257,131,313,561, of which short-term assets are VND 222,696,441,825,
accounting for 86.6%. Compared to 2020, total assets increased by
33,308,041,123 VND with an increase of 14.88%. That shows that the scale of
the company's capital has increased, the scale of production and business has been
expanded.
Long-term assets in 2021 are VND 34,434,871,736, down 7.15%. The decrease
in long-term assets shows that the enterprise has invested in long-term assets with
short-term capital sources (for example, short-term loans) cash flow will become
unstable, potentially unstable in terms of financial conditions. financial
performance of the business.
Most of the company's long-term investment is in fixed assets, other long-term
assets account for a negligible proportion.
The proportion of long-term assets in total assets in 2021 is 13.4%, which is quite
low, partly due to the characteristics of the short-term manufacturing industry,
which has large short-term assets, especially goods. inventory and accounts
receivable. However, for a manufacturing enterprise, the low proportion of long-
term assets shows that the investment level of the enterprise is not high.
Short-term assets in 2021 increased by VND 35,960,147,816 with an increase
rate of 19.26%. In which, cash and cash equivalents increased by VND
28,366,177,109 with a strong growth rate of 148.07% due to an increase in cash
volume of VND 5,366,177,109 and cash equivalents also increased by VND
23,000,000,000. Since the company's short-term liabilities tend to increase,
increasing the amount of idle cash helps to increase the company's ability to pay
its due debts, on the other hand, also increases the company's capital turnover.
Short-term receivables in 2021 decreased, in which prepayments to sellers
decreased completely to zero. Thus, in 2021, receivables from customers
decreased, reflecting the company's debt collection policy has been a change in
the positive direction.
3. Analysis of the balance between assets and capital sources (Balance Sheet):
According to the data table, we can see that the company's long-term capital is
163,595,840.115 dong, which is larger than its long-term assets of
34,434,871,736 dong. The company's current assets of VND 222,696,441,825 are
larger than current liabilities of VND 93,535,473,446. Therefore, regular working
capital is VND 129,160,968,379 >0, which shows that long-term capital surplus
after investing in fixed assets, the excess is invested in current assets. At the same
time, current assets are larger than current liabilities, so the company's solvency
is good.
In addition to the analysis of regular working capital, when analyzing the situation
of ensuring capital for production activities, we need to analyze more the norm
of regular working capital needs.
Regular working capital needs = Inventory and accounts receivable – Current
liabilities
= 71,170,804,914 - 93,535,473,446 = -22,364,668,532 VND.
Long-term capital is not enough to finance fixed assets. Enterprises must invest
in fixed assets a part of short-term capital, current assets do not meet the demand
for short-term debt payment, the balance of payments of enterprises is out of
balance, enterprises must use part of fixed assets. determined to pay short-term
debts as they come due.
 2.1.2 Income Statement
Income Statement
Unit:VND
No. 2020 2021 Difference %
1. Sales and service 01 1,086,802,410,174 966,643,954,154 (120,158,456,020) (11.06)
provision
2. Revenue deductions 02 9,834,129,920 10,629,447,704 795,317,784 8.09
3. Net revenue from 10 1,076,968,280,254 956,014,506,450 (120,953,773,804) (11.23)
selling goods and
providing services
4. Cost of goods sold 11 943,402,002,731 807,520,890,261 (135,881,112,470) (14.4)

5. Gross profit from sales 20 133,566,277,523 148,493,616,189 14,927,338,666 11.18

and service provision
Revenue from financial 21 3,515,052,483 4,633,644,823 1,118,592,340 31.82
activities
Financial expenses 22 261,811,829 406,018,908 144,207,079 55.08
Cost of sales 25 59,400,042,918 71,089,814,555 11,689,771,637 19.68
Business administration 26 19,637,405,578 20,607,216,888 969,811,310 4.94
expenses
6. Net operating profit 30 57,782,069,681 61,024,210,661 3,242,140,980 5.61
Other income 31 1,452,802,743 1,798,804,807 346,002,064 23.81
Other expenses 32 358,628,441 564,532,954 205,904,513 57.41
13. Other profit 40 1,094,174,302 1,234,271,853 140,097,551 12.8
14. Total accounting 50 58,876,243,983 62,258,482,514 3,382,238,531 5.74
profit before tax
15. Current CIT expenses 51 11,754,821,496 12,470,451,366 715,629,870 6.09
16. Deferred income tax 52 362,576,024 375,999,232 13,423,208 3.7
expense
17. Profit after corporate 60 46,758,846,463 49,412,031,916 2,653,185,453 5.67
income tax
19. Basic earnings per 70 3,952 4,177 0,225 5.70
share

The company's profit after corporate income tax in 2021 increased by nearly
VND 3 billion, equivalent to 5.61% compared to 2020. For a volatile and difficult
year like 2021 while there are many companies with the same industry announced
a loss. It shows that the company has had a fruitful year of operation and achieved
this result because the company has a good business and cost management policy.
The chart of after-tax profit fluctuations of some leading companies in the food
and food industry in the last 6 quarters:
 SAF: Profit after tax in the fourth quarter of 2021 reached VND 9.3 billion,
down 1.2% over the same period and down 6.16% compared to the
previous quarter. This business also has more than 39.8 billion dong of
inventory for the first months of 2022 when production activities in the
industry have not yet entered the orbit. Profit after tax decreased somewhat
but Safoco still kept EPS 4,100 dong - quite low compared to other
companies in the same industry.
 SGC: In the last quarter of the year, revenue and profit in the fourth quarter
of 2021 increased by 128 % over the same period and 142% compared to
the previous quarter. This business also exceeded 70% of the full year
profit plan assigned by the General Meeting of Shareholders. SGC's EPS
in 2021 also reached VND 4,411 – a pretty good level. Accumulating the
whole year of 2021, SGC's profit is 31.7 billion dong, up 2.8% over the
same period in 2020.
 LAF: Q4's own after-tax profit is VND 13.4 billion. With this result, the
achievement that exceeded 30% of the year plan at the end of the third
quarter was broken. In the fourth quarter, LAF also reduced its inventory
balance by 40.5% compared to the beginning balance.

The chart of net revenue in the last 6 quarters of some food companies:
 In general, the inventory balance at the end of the fourth quarter increased
by 6.5% compared to the balance at the end of the third quarter of 2021,
leading to a decrease in net revenue of 4 enterprises by 25% compared to
the previous quarter and a decrease of 22.48% compared to the same period
of the same period last year. period last year. However, we can see that
SAF's net revenue increased less than its peers because SAF still holds
more inventory for the first months of 2022 than other businesses.
Cost of goods sold decreased by 51.6 billion, equivalent to 24.4%.
 Gross profit decreased by 13 billion, equivalent to 27.36%.
Financial income increased by 678 million VND or 60% and financial
expenses also increased by 4.8 billion VND or 3.28%.
 Profit from financial activities decreased by 7.4 billion VND or 39.26%.
Selling expenses decreased by 6 billion VND, equivalent to 24.5%. Because
businesses reduce costs related to sales activities such as advertising costs,
transportation costs, depreciation costs...
General and administrative expenses increased by 1.1 billion VND,
equivalent to 23.86%. The increase in administrative costs is due to the
expansion of production and business scale.
- Other income decreased by 162.6 million VND or 29%.
- Other expenses decreased by 23.3 million VND or 22.3%.
- Other profit decreased by 139.29 million VND or 30.64%.

2.2 Analysis of financial indicators

 2.2.1. Analysis of solvency.
1. Ability to pay short-term debt
No Indicators Unit 2020 2021 Difference
1 Quick Ratio 1,42 1,95 0,53
2 Current Ratio 2,63 2,38 0,25
3 Ratio of short-term 0,27 0,5 0,23
assets
4 Quality of short-term 0,46 0,17 0,29
assets

The current solvency ratio in 2021 is 2.38 times, meaning that one dong of
short-term debt is guaranteed to be paid by 2.38 dong of short-term assets. This
coefficient is greater than 1, indicating that the enterprise has enough or even
excess of short-term assets to pay short-term debts. Compared to 2020, this
coefficient decreased by 0.095 times because the growth rate of short-term
assets was smaller than the growth rate of short-term liabilities. Specifically:
- Especially in short-term assets, cash and cash equivalents increased
dramatically from nearly 20 billion VND to nearly 50 billion VND (up
148%).
- Because short-term receivables increased by 50.3% or decreased by VND
15.57 billion.
- Due to a decrease in inventory by 53.7% or VND 46.1 billion.
- Because other short-term assets decreased by nearly 471 million VND or
56%.
Because inventory and other current assets are illiquid, we need to use another
ratio that excludes inventory and other current assets, which shows this solvency
well, that is the ratio. Fast payment. Quick ratio in 2021 is 1.95 times, which
means that a VND of short-term debt is guaranteed to be quickly paid by VND
1.95 of current assets after excluding inventory and current assets. other. Thus,
the company can afford quick payments to pay it off without liquidating inventory
and other current assets. This coefficient compared to 2020 increased by 0.53
times, proving that the financial situation of the enterprise is increasingly secure.
The reputation of the business is increasing day by day.
The liquidity ratio of short-term assets in both years is high (0.5 times in 2021,
0.27 times in 2020). Shows that cash and cash equivalents account for a high
proportion of total short-term assets. The quality of short-term assets in 2021 is
 0.17 in 2020, which is 0.46, which proves that inventory in total short-term
assets is high.
These two indicators of the company are both high, can it show the company's
bad financial situation? Is the company's capital stagnant? Is inventory a
problem? To answer this question we must consider the specifics of the industry
in which the company operates. SAF is a company operating in the food
processing industry. This industry usually sells a lot at the end of the year, so the
amount of cash in and receivables at the time of making financial statements is
large. Companies in this industry often have a policy of stockpiling goods for sale
at the beginning of the next five years when the production situation has not yet
entered the orbit and the demand for this item is high. Therefore, the high
inventory at this time is consistent with the policy that the business is applying.
 From the above analysis, we can draw the conclusion that the short-term
solvency of SAF is good.
2. Ability to pay long-term debt.
Long-term debt of an enterprise is a part of stable capital used to invest in long-
term assets such as fixed assets, investment real estate, long-term securities....so
long-term solvency The term includes important criteria to assess the stable
situation of the business owner in business.
The indicators reflecting SAF's long-term debt solvency are as follows:
No. Indicators Formula 2020 2021 +/-
1 Debt ratio Liabilities/Total Assets 0,32 0,36 0,04
2 Debt-to-equity ratio Liabilities/Equity 0,46 0,57 0,11
3 Overall long-term ratio Long-term assets/Long- 0 0 0
term liabilities
4 Self-financing rate Equity/Total Capital 0,68 0,63 0,05
5 Long-term asset self- Equity/Long-term assets 4,12 4,75 0,63
financing rate

• Debt ratio reflected in 100 dong of assets of an investing enterprise, there

are 32 dong of assets (2020), 36 dong of assets (2021) from external loans. It can
be seen that in 2021 this coefficient tends to increase. It reflects the ability to
appropriate capital from outside a lot, high level of financial risk, and dependence
on external creditors.
However, SAF's liabilities are mainly short-term debt: Short-term debt
accounts for 100%, no long-term debt. On the other hand, SAF's debt is not a
bank loan but most of it is a house loan. customer offers and prepayments,
payables to the state. Long-term debt also has no debt, but mainly the deposit to
pay for the site embroidery. Compared to other businesses during this period, this
is an advantage for the company because in 2020 and 2021, bank lending interest
rates are high. The more a business borrows, the more it will lose. Harmful to
business.
The debt ratio has increased to 12.5%, reflecting the increasing level of financial
risk, the business depends on external creditors. It can be seen that the capital
structure of enterprises in 2020 is safer than in 2021. It is shown that in 2020, the
debt-to-equity ratio will be 0.46 by 2021 to 0.57. Self-financing rate declines, in
2021 self-financing rate drops to 7.35%. The reason for the increase in debt ratio
in 2021 is due to:
- The growth rate of liabilities is much higher than the growth rate of total
assets. Specifically: The growth rate of liabilities in 2021 is 32% (in
absolute terms, it increases from VND 70.9 billion to VND 93.5 billion, an
increase of more than VND 22.6 billion). The growth rate of total assets
was 14.88% (in absolute terms it increased from VND 223.8 billion to
VND 257.1 billion, an increase of VND 33.3 billion).
- The company's debt-to-equity ratio in 2021 is 0.57 times, which means that
every 100 dong of equity is guaranteed for 57 dong of liabilities. This ratio
of the company in both years is lower than 1, which is convenient for the
company to borrow because when looking at this index, lenders will easily
believe in the company's ability to repay. But this ratio of the company is
too low, it will make the shareholders of the company unhappy because the
amount of capital that the company takes from outside reduces the
company's business capital.
- The self-financing ratio in 2021 is 0.63 which means that for every 100
dong of assets, the equity of the invested enterprise is 63 dong, the rest is
from financing liabilities. Here are mainly short-term liabilities. Compared
to 2020, this ratio decreased by 0.05 times, showing that SAF's capital
structure is starting to shake. More and more dependent on the outside. The
increase in self-financing rates is due to:
- The growth rate of equity (0%) is slower than the growth rate of total
capital (14.88%).
• Self-financing Ratio Long-term assets
This ratio reflects that every 1 VND of long-term assets of the business in
2020 is financed by 4.12 VND and by 2021 is 4.75 VND Equity. Thus, in both
years, SAF has a safe capital structure and solid financial capacity. Enterprises
can not only finance long-term assets, but also finance short-term assets. This
ratio increases because the growth rate of equity (0%) is faster than the growth
rate of Long-term assets (-7.15%).
2.2.2. Analyze the effectiveness of asset management and use.
1.Effective analysis and use of common assets.
No. Indicators Unit 2020 2021
1 Total average assets đ 217,797,549,849 240,477,292,999
2 Total profit after đ 46,758,846,463 49,412,031,916
corporate income tax
3 Total net sales đ 1,076,968,280,254 956,014,506,450

Based on the above data table to calculate the indicators reflecting the general
efficiency of the company's common assets as follows:
No. Indicators Unit 2020 2021
1 Asset turnover đ/đ 4,94 3,98
2 Return on assets đ/đ 0,21 0,20
3 Depreciation rate of assets to net sales đ/đ 0,20 0,25
4 Depreciation rate of assets compared to đ/đ 4,66 4,87
profit after corporate income tax

Comment:
- The asset turnover in 2021 is 43.98 times, which means that for every 1 VND
invested in total assets, it will generate 3.98 VND in net revenue. This number is
also quite high, proving that the assets are moving quickly, which is a factor
contributing to increasing revenue and profit for the business. Asset turnover in
2021 compared to 2020 is significantly reduced, only 0.96 times. This means that
net sales growth is slower than asset growth.
- Return on assets in 2021 is 0.20 times, which means that every 1 dong invested
in total assets will generate 0.20 times profit after corporate income tax. This
indicator is 0.01 times lower than that of 2020, showing that the efficiency of
using assets has decreased but not significantly. On the other hand, the return on
assets for both years is lower than the current bank loan interest rate. This proves
that enterprises cannot borrow more money to invest in production and business
activities, in order to contribute to business growth.
 - The depreciation rate of assets compared to net revenue in 2021 is higher than
in 2020, which proves that when enterprises want a high level of profitability in
2021 in 2010, they need to invest more in assets.
- The depreciation rate of assets compared to the profit after corporate income tax
in 2021 is 0.21 times higher than in 2020, which proves that when the enterprise
wants a profit after corporate income tax in 2021 equal to 2020. need to invest
more assets, or with the same asset investment, the profit after corporate income
tax in 2021 will be lower than in 2020.
2.Effective analysis of short-term asset management and use.

No. Indicators Unit 2020 2021

1 Average short-term assets
2 Average inventory
3 Average accounts receivable
4 Average payables
5 Total amount of goods
purchased on credit
6 Cost of goods sold
7 Net Revenue
8 Profit after corporate income tax
177,506,442,663 204,716,367,917
87,678,674,228 62,934,740,773
40,395,084,645 33,832,794,553
72,542,857,315 82,223,172,778
18,036,715,927 10,128,343,672
943,402,002,731 807,520,890,261
1,076,968,280,254 956,014,506,450
46,758,846,463 49,412,031,916

From the above data table, we have the indicators reflecting the efficiency of
management and use of short-term assets as follows:
No. Indicators Unit 2020 2021
1 Turnover of short-term assets 6,06 4,67
2 Depreciation rate of current assets to net sales 0.16 0,21
3 Return on short-term assets 0,26 0,24
4 Depreciation rate of short-term assets compared 3.8 4,14
to profit after corporate income tax
5 Short-term asset turnover period (K) 59,33 77,08
6 Inventory turnover 10,76 12,83
7 Number of days of stocking inventory 33.45 28,05

Comment:
- The turnover of short-term assets in 2021 is 4.67 times, which means that every
1 dong invested in short-term assets will generate 4.67 dong in net revenue or
short-term assets in 2021 will turn 4. ,67 rounds. This figure compares with some
leading enterprises such as CAP, but it is high compared to other enterprises. That
shows that SAF's short-term assets are moving well. This indicator is much lower
compared to 2020 which proves that the growth rate of net revenue is slower than
the growth rate of short-term assets. Although the efficiency of using short-term
assets over the past 2 years is a big difference, we still consider this an
achievement of the enterprise because with the difficult situation of the economy
in the past year 2021, the business still such a number of revolutions.
- The depreciation rate of assets compared to net revenue in 2021 is higher than
in 2020, which proves that when businesses want a profit in 2021 equal to 2010,
they need to invest in more short-term assets.
- The profitability of short-term assets in 2021 is 0.24 times, which means that
every 1 VND invested in short-term assets will generate 0.24 VND profit after
corporate income tax. . This indicator is 0.02 times lower than in 2020, showing
that the efficiency of using assets has increased but not significantly. On the other
hand, the profitability of short-term assets for both years is slightly higher than
the current bank loan interest rate. Because the difference of this target in 2021
compared to the lending interest rates of banks is too low. Therefore, enterprises
cannot borrow more money to invest in production and business activities.
Because if there is a loan, the profit (excluding interest expense) is just enough to
cover the cost of bank loan interest.
- The depreciation rate of short-term assets compared to profit after corporate
income tax in 2021 is 0.34 times higher than in 2020, which proves that when
enterprises want a profit after corporate income tax in 2021 equal to In 2020, it is
necessary to invest more assets, or with the same asset investment, the profit after
corporate income tax in 2020 will be higher than in 2021.
- The short-term asset turnover period in 2021 is 77 days. This number says that
in 2021, each rotation of short-term assets is 77 days. This is also a relatively low
number compared to the level of enterprises in the food and food industry,
proving that short-term assets move quickly, contributing to increasing revenue
and profit for the business. To better understand this indicator, we have the
following analysis table:
The chart shows the change in inventory balance at the end of the periods:
Looking at this chart, we can see that SAF's ending inventory balance is relatively
small compared to industry leaders like LAF. Therefore, SAF's inventory
turnover is the largest compared to LAF, CAP. SAF's turnover in 2021 is 12.83
times, which means that for every 1 dollar of inventory invested, it generates
12.83 times COGS or in 2021, inventory turns 12.83 times. . This number is really
very high, it is much higher than the leading enterprises in the industry,
specifically: the inventory turnover in 2021 of LAF is 2.72 times, of CAP is 7.08
times. The high inventory turnover ratio of SAF proves that the capital efficiency
for inventory is good, which is a factor to improve the capital efficiency of the
enterprise. This indicator increases 2.07 times compared to 2020 which shows
that the turnover rate of inventory in 2021 is larger than in 2020. This does not
reflect the upward trend of the business.
The number of days to hold inventory in 2021 is 28.05 days, which means that an
inventory turnover takes 28.05 days. This is a rather low number, it is much lower
than some leading enterprises in the industry such as LAF, CAP. This low
indicator shows that inventory moves quickly, which is a factor contributing to
increasing revenue and profit for the business. The number of days of inventory
holding in 2021 compared to 2020 decreased by 5.4 days.
 Conclusion: Through the analysis of the above criteria, we can see that the
efficiency of management and use of short-term assets of SAF in 2021 is much
lower than the average of the food industry.

3. Profitability analysis

Indicators Formula 2020 2021 +/-

Gross profit margin Gross profit x100/Net revenue 12,4% 15,53% 3,13%
Net profit margin Profit after tax x100/Net 4,34% 5,16% 0,82%
revenue
Basic Profitability EBITx100/Average total 27,03% 25,9% (1,13%)
(BEF) assets
Return on Assets Profit after tax x100/ Average 20,89% 19,22% (1,67%)
(ROA) total assets
Return on Equity Profit after tax x100/Average 30,58% 30,2% (0,38%)
(ROE) total equity

- Gross profit margin: This index is reflected in VND 100 Net revenue from sales
and service provision has VND 12.4 (in 2020) and VND 15.53 (in 2021) profit
from sales and supply. service level. The increase of 3.13% was due to the
decrease in net sales of 11.23%, slower than the decrease in COGS of 14.4%.
Gross profit increased by 11.18%. But we can see, the ratio of COGS over net
revenue over the past 2 years is 89%. This proves that in 2021, the enterprise has
performed well in managing input costs, increasing capital efficiency. We can see
the profitability of SAF like this is high in the food processing industry.
- Net profit margin: This index reflects in 100 dong of net revenue, there are 4.34
dong in 2020 and 5.16 dong in 2021 as profit after tax.
- Return on assets ROA of the company shows that the company investing in 100
VND of assets will generate VND 20.89 (in 2020) and VND 19.22 (in 2021)
profit after tax. The company's ROA has decreased by 1.67% in absolute terms
compared to the previous year. The decrease in ROA of the company in 2021 is
due to the increase in profit after tax and the company's average total assets, but
the growth rate of profit after tax is slower than the growth rate of the average
total assets. In 2021, the company's average total assets will increase by 10.4%.
Profit after tax increased by 5.67%.The company has tried to manage and use
assets more rationally compared to the previous year.
- The company's ROE index over 2 years shows that the company that spends 100
dong of capital will get 30.2 dong of profit after tax (in 2021) and 30.58 dong (in
 2020). We see that in general, the company's return on equity in the period of
2020 - 2021 decreases. Decreasing self-financing ratio has a positive impact on
return on equity. That is, the company tends to increase debt, this is the financial
leverage that amplifies the company's profitability on equity.The company's ROE
compared to other companies in the same industry with the same capital size is
not very high.
Conclusion: Regarding the company's profitability: from the detailed analysis
above, it can be seen that the company's profitability is at a normal level compared
to other companies in the same industry and with the same capital structure.
However, the company's profitability increased very little, showing that the
efficiency of capital use has not been focused on upgrading. In order for the
company to thrive and rise above other companies, the company must focus on
managing and using assets more effectively.
4. Analyze profitability through Dupont method – analyze the rate of return on
equity ROE.
Profitability analysis through Dupont method helps to assess the financial
performance of the business. The analysis based on the Dupont method will help
us combine the general assessment of the company's profitability, and at the same
time help us to come up with measures to increase the return on Equity.
Basic form:
𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥 𝑋 100
𝑅𝑂𝐸 =
𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑞𝑢𝑖𝑡𝑦
𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥 𝑥 100 𝑁𝑒𝑡 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
= 𝑋 𝑋
𝑁𝑒𝑡 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑇𝑜𝑡𝑎𝑙 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑒𝑞𝑢𝑖𝑡𝑦

ROE= Net Profit Ratio x Total Asset Turnover x Leverage Factor.

ROE=ROS x TAT x FLM
Analysis object:
ROE= ROE2021-ROE2020=30,2%-30,58%= -0,38%
Consider the influencing factors:
- The influence of FLM

ROEFLM = FLM.TAT0.ROS0 = 0,42%

- The influence of TAT

ROETAT = FLM1. TAT.ROS0 = -6,33%

- The influence of ROS:
ROEROS = FLM1.TAT1. ROS = 4,96%
Summarizing the influence of these factors:
ROE = 0,42% + -6,33% + 4,96% = -0,95%
Thus, compared to 2020 the rate of return on equity decreased by 0,95%.

Criteria Unit 2021 2020 +/- %

Average equity dong 158,254,120,222 145,254,692,534 12,999,427,688 8,9
Average dong 82,223,172,777 72,542,857,315 9,680,315,462 13,3
liabilities
Total average dong 240,477,292,999 217,797,549,849 22,679,743,150 10,4
assets
Cost of goods dong 807,520,890,261 943,402,002,731 (135,881,112,470) (14,4)
sold
Net Revenue dong 956,014,506,450 1,076,968,280,254 (120,953,773,804) (11,23)

Gross profit dong 148,493,616,189 133,566,277,532 14,927,338,666 11,18

Profit after tax dong 49,412,031,916 46,758,846,463 2,653,185,453 5,67

Leverage time 1,52 1,5 0,02

Factor (FLM)
Asset turnover cycle 3,98 4,94 (0,96)
ratio (TAT)
Gross profit % 15,53 12,4 3,13
ratio
Net Profit Ratio % 5,16 4,34 0,82
(ROS)
ROA % 19,22 20,89 (1,67)

ROE % 30,2 30,58 (0,38)

Affected by % 0,42
FLM
% -6,33
TAT
% 4,96
ROS

The reason is due to:

- The effect of asset turnover ratio (TAT) makes ROE decrease by 6.33%,
this is the biggest factor affecting the decrease of ROE. This is because the
growth rate of costs is much greater than the decrease in revenue. Enterprises
should have balanced policies between cost control and revenue growth to be
able to have growth in return on equity in the coming years.
- The influence of leverage factor makes the ROE in 2021 increase by 0.42%.
This factor has a negative but insignificant effect on ROE.
 - The effect of net profit ratio makes ROE in 2021 increase by 4.96%
compared to 2020 which is a positive factor. But this increase is not enough
to compensate for the decrease in ROE caused by the impact of asset turnover
ratio. In order to contribute to the improvement of net profit ratio, the
company can change its credit policies to increase revenue and profit, thereby
increasing the company's ROE.
Part 3: GENERAL ASSESSMENT FOR IMPROVEMENT OF
FINANCIAL SITUATION
1. Business Activity
In 2021, the total consumption volume reached 17,393 tons, up 13.14%
over the same period in 2020 (15,373 tons). In there:
- Domestic market: Domestic consumption in 2021 will reach 13,284 tons,
accounting for 76.38% of total consumption, up 19.73% over the same
period in 2020 (11,095 tons). Specifically:
 Supermarket system: Consumption volume reached 4,833 tons, up
20.79% over the same period in 2020 (4,001 tons).
 Dealer system: Sales volume reached 7,576 tons, an increase of 20.87%
over the same period in 2020 (6,268 tons).
 Hanoi branch: Sales volume reached 875 tons, up 6.06% over the same
period in 2020 (825 tons).
- Export market: The export volume in 2021 will reach 4,109 tons,
accounting for 23.62% of total consumption, down 169 tons compared to
the same period in 2020 (4,278 tons) due to the lack of containers to export
goods despite the high production capacity. costs 5 to 10 times higher.
- Following the regulations on social distancing according to Directive
16/CT-TTg, the restaurant 49/1 Hoa Binh and the showroom had to close,
so the commercial revenue in 2021 decreased by nearly 60% compared to
the previous year.
2. Finance and Investment
- The Company always controls and preserves capital closely, manages cash
flow effectively, flexibly and safely, ensuring to fully meet capital needs
for timely production and business activities.
- According to the Resolution of the Board of Directors, the capital
construction investment plan in 2021 was approved with a total planned
investment of 10,970 million VND.
The total value of implementation in 2021 is VND 8,402 million, of which:
 Completion/settlement value: 8,402 million VND (11 items of
investment and procurement, 07 items of capital construction).
 Unfinished value: 0 million VND.
  Investment capital for procurement and capital construction is
mainly own capital (no bank loans).
- The Company has made the investment according to the approved plan, no
investment items are out of the plan nor any investment exceeds the
planned investment budget. Investment items are adjusted in accordance
with market developments, production plans and the actual situation at the
Company.
- The company's financial situation is healthy, capital is preserved, and it is
guaranteed to serve production and business activities.
REFERENCES
1. Textbook of Corporate Finance
2. Financial statements for the years 2020-2021 - Website:
www.safocofood.com
3. Analysis of financial statements of Safoco Foodstuff Joint Stock
Corporation – (2010&2011)
4. Analysis of financial statements of Song Da – Ha Noi Joint stock company
(2019)