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TABLE OF CONTENTS

PART A:
1. The year-end financial statement at 31/12/2021……………………………….5
2. Adjusting entry……………………………………………………………………..5
3. An accompanying letter…………………………………………………………...6
(1) Ratio analysis of ABC Fooding Ltd company in the period from 2020 to
2021……………………………………………………………………………..7
(2) Interpretation of the ratios……………………………………………………..8
(3) Several effective approaches in improving performance………………….10

PART B:
(1) Ratio analysis of Hoa Phat Group’s financial statement in the period from
2016 to 2020……………………………………………………………………10
(2) Interpretation of ratio analysis…………………………………………………10
(3) Forecasted 2021 financial statement of Hoa Phat Group………………….11

PART C: REFERENCE LIST…………………………………………………………12

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PART A:
1. The year-end financial statement at 31/12/2021:

2. Adjusting entry

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 3. An accompanying letter

ABC Fooding Company

12 P. Chua Boc, Quang Trung, Dong Da, Hanoi City 100000

January 22, 2022

Dao Minh Anh

ABC Fooding Ltd Company
Hanoi City 100000

Dear clients :

On behalf of my company - ABC Fooding company, I would like to give you an overview of
my company’s year-end performance which ended on December 31, 2021 through a series
of documents including a ratio analysis 2019-2021, a financial statement and several
recommendations for how to improve performance as well as apply accounting softwares
effectively. Firstly, I am going to give you a ratio analysis of ABC Company with an
interpretation of our ratio.
(1) Ratio analysis of ABC Fooding Ltd company in the period from 2020 to 2021:
ABC Fooding Ltd Company
RATIO ANALYSIS

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 (2) Interpretation of the ratios :
Profitability
At the outset, profitability ratio elucidates how successfully a company's activities can
create profits based on data as follows:
● Return on Equity ( ROE ): As can be seen in ratio analysis, ROE declined by two
times in 2021, which occupied 5.0% in 2020.
● Return on Assets ( ROA ) : The ratio of ROA indicated a downward trend with only
2.0% in the final year.
● Gross profit margin : The analysis showed a trifling decline from 58.46% to 55.3% in
2021, which indicates that the profit, notwithstanding sipping slightly, stayed quite
stable over the years.
● Operating profit margin : At the onset it is clear, there was a significant plummet
from 17.31% to 9.0% throughout the period, which implies a sharp drop in how ABC
company gained revenue.
● Net profit margin : Net profit margin of the company ended at the extent of 2,7% in
2021 compared to the initial point of 11.54% in 2019. Undeniably, the company
underwent an economic breakdown, especially in the transition from 2019 to 2020.

Liquidity
● Working capital: As can be presented in the analysis, this figure climbed
substantially from 8,800 to 14,523. This shows that the business gradually improved
assets and alleviated current liabilities, which exerts positive impact on business
operations.
● Current ratio: It can be seen that current ratios surged and reached at
approximately 2,9 in the last year.
● Quick ratio : Quick ratio underwent a small soar from 1.23 to 1.81 during the time
frame.
● Debt ratio : As the diagram suggests, the percentage experienced oscillation from
41.2% to 41.5% in 2021 , which indicates that in 2021, the company managed
liabilities better compared to the point of 41.7% in 2020.

Asset usage
● Total assets turnover : There was a stable trend at around 0.5 in the figure of total
assets turnover.
● Fixed assets turnover : At the same token, fixed assets turnover leveled off at
about 0.9.
● Return on capital employed: There was a considerate plummet from 6.7% to 5.2%
in 2020 in the return on capital employed during the period.
● ROA : The ratio of ROA indicated a downward trend with only 2.0% in the final
year.

Investment ratio
● EPS : The figure of EPS went into free-fall by three times, which occupied 0,1 in the
final year. This shows that the profit from shares outstanding had been not less
favorable than the previous year.
● Dividend coverage: Dividend coverage witnessed the point of 1.9 in 2021.
In general, the ratio of ABC Fooding Company indicated a considerable dip on most ratios,
especially in net profit which declined by five times in the final year. According to data and

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ratios, it can be considered that the way top management is operating and controlling the
company would be inappropriate and ineffective. It might be the consequence of unattractive
product promotions or unsuccessful outcome in motivating and fueling employees' spirit.
Therefore, our company have a responsibility to overcome and improve limitations on our
previous work. Especially, in the severe period of Covid 19, the pandemic can be an
opportunity for us if ABC company knows how to convert threats into strengths. To
exemplify, ABC company can profoundly understand the demand of online shopping and
utilize it to promote online food websites and home delivery. As a result, our company will
apply innovations and new breakthroughs in the food industry and promise to deliver the
best experience to customers.

(3) Several effective approaches in improving performance

At the outset, there are a variety of ways of maintaining and enhancing work efficiency in
accounting. Foremost, undeniably, processing accounting calculations manually is fairly
precise and effective. However, it can be irresistible that manual data processing might be
mundane and prone to errors. Therefore, in the period of technology, the advent of cutting-
edge machines and software is to improve life, work, and other aspects, and it might help in
tackling problems. For an accountant, apart from human effort, we can utilize advancements
of technology for improving efficiency, and accounting software is a salient instance.
Basically, the role of accounting software is to record and store accounting transactions from
trade payables, trade receivables to profitability, and so on. With automation and modern
technology, it offers a myriad of benefits for workers as follows:
It saves time
Initially, there is no doubt that by automating time-consuming manual bookkeeping and
accounting operations, it will save you hours of labor each week.

Reduce the workload and improve work accuracy

Furthermore, it does wonders for performing tedious tasks, thereby reducing the workload of
humans. Besides, with automation, this system is programmed to promote data accuracy
with the role of minimizing mistakes, which exerts positive impacts on business performance.

It gives detailed insights.

Accounting software may be used to track transactions by departments, projects, locations,
or classes if your chart of accounts is correctly set up. This helps you generate more
strategic and appropriate decisions by giving you an insight of where your money comes
from and where your expenses originate from.

Easily access accounting data

Being online software, computerized accounting software assists you with easier access to
your data 24/7 from any device. Therefore, instead of the conventional way like awaiting
financial statements for too long when asking your accountant to prepare them, people can
log in and go into online documents anywhere and at any time.

Improved Accounting Security

Apart from that, the accounting services are also equipped with large storage and great
security. This implies that your information is surely protected by many layers of advanced
encryption techniques, making it far safer even when putting it on a shelf in the office.

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Reduce Paperwork
As well as that, using cloud-based accounting software partly contributes to environmental
protection. People might process and transfer data online with laptops, computers, and so
on, thereby alleviating the amount of printed paperwork and saving time as well.
To sum up, accounting software is of greater benefit to accountants and bookkeepers
compared to conventional approaches. Therefore, with our company- ABC Fooding
Company, it would be a great opportunity when applying a useful full-time multitasker like
accounting software in the professional environment. In the near future, we are going to
record and process work through accounting services in order to give customers a better-
than-expected experience with our endeavor.

Sincerely,

Dao Minh Anh

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PART B:
(1) Ratio analysis of Hoa Phat Group’s financial statement in the period from 2016
to 2020
Hoa Phat Group ( HPG )

RATIO ANALYSIS [ 2016-2020]

(2) Interpretation of Hoa Phat ratio analysis [ 2016-2020 ]

Profitability
● Return on Equity ( ROE ): As can be seen in ratio analysis, ROE took a nosedive
from 38.5% in 2016 to 17.1% in 2019, then went up to 25.2% in the final year.
● Return on Assets ( ROA ) : The ratio of ROA indicated significant fluctuation
between 26.2% and 13.2% during the period. This figure
● Gross profit margin : Likewise, the analysis showed highs and lows from 26.3% to
21.0% in 2020, which indicates that the profit, notwithstanding Slumping from 2016
to 2019, revealed a positive movement up to 21.0% in the last year.
● Operating profit margin : At the onset it is clear, there was a fluacation between
23.1% and 17.0%, which implies the years of 2017, 2018, and especially 2019 were
not a favorable condition for Hoa Phat’s development.
● Net profit margin : Net profit margin of the company ended at the extent of 15.0% in
2020 compared to the initial point of 19.9% in 2019, after significantly slipping.
Undeniably, the company underwent an economic breakdown, especially in the
transition from 2017 to 2019.

Liquidity
● Working capital: As can be presented in the analysis, this figure witnessed a leap-
quantum to 14,548,337 in working capital in 2019 before sharply decreasing in later

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 years. In 2020, the company climbed substantially from 3,452,739 in 2019 to
4,772,041 in the last year.
● Current ratio: It can be seen that current ratios declined and remained the same at
approximately 0.1 in the last three years.
● Quick ratio : Quick ratio underwent ups and downs from 0.7 to 0.6 during the time
frame, there
● Debt ratio : As the diagram suggests, the company was on the rise from 40.3% in
2016 to 55.0% in 2021 , which indicates that in 2021, the company managed
liabilities better compared to the point of 41.7% in 2020.
● Interest coverage: It can be seen that the business underwent a sharp decline from
20.9 to 5.4 which means that the ratio declined by four times. This indicates that
profit before tax of Hoa Phat Group was rapidly worse with time.

Asset usage
● Total assets turnover : There was a stable trend at around 0.7 in the figure of total
assets turnover.
● Fixed assets turnover : Striking, fixed assets turnover revealed a point of 12.9 in
2018, which was sharply higher than remaining years.
● Return on capital employed: There was a considerate plummet from 43.8% to
23.5% in 2020 in the return on capital employed during the period.
● ROA : The ratio of ROA indicated significant fluctuation between 26.2% and
13.2% during the period.

Investment ratio
● EPS : The figure of EPS hit a low of 4507 in the final year. This shows that the
profit from shares outstanding had been not less favorable than the previous year.
● P/E: By contrast, P/E of Hoa Phat Group reached a peak of 9.2 during the time
frame.
● Dividend coverage: Dividend coverage stabilized at 0.1 in the period from 2019 to
2020
Overall, in 2020, the advent of Covid 19 almost crippled the entire economy of Vietnam and
businesses, even large ones.
Based on ratios, it can be said that even though other businesses underwent a long fall, Hoa
Phat stood at the robust position with ratios which were not too different compared to
previous year. Hoa Phat rehabilitated its position effectively after decreases in ROE, ROA,
especially net profit.

(3) Forecasts of 2021 financial statements:

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Interpretation: To make an appropriate forecasting financial statement for 2021, the
company relies on the ratio of three previous quarters and subsequently, calculates
the average of the total of these three figures. By virtue of that , the forecasted ratio
can be logical and moderate based on the precise ratio of previous financial
statements.

PART C: REFERENCE LIST

Baggott, S., 2020. 9 Advantages Of Accounting Software For Startups. [online] Zeni.ai. Available at:
<https://www.zeni.ai/blog/advantages-of-accounting-software> [Accessed 22 January 2022].

Deskera Blog. n.d. 10 Accounting Software Advantages & Benefits For Any Business. [online]
Available at: <https://www.deskera.com/blog/accounting-software-advantages-benefits/> [Accessed 21
January 2022].

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