Assignment 1:

Link tham khảo

Tutorial Class Unit 2 & 4 MBA 6081 Ms Thanh Nhan 26 02 2021 - YouTube

Từ phút 1:09:00

This document is just only for reference, and you can change the structure of your assignment.

Part I

1. Introduction of the company

+ Name, headquarters (short paragraph for history)

It will help if you visit the company’s website for reference.

+ Products/services (market)

It will help if you visit the company’s website for reference.

2. Financial statement analysis

3. Financial Ratio Analyzing

+ Liquidity Ratios

+ Profitability Ratios

Explain in detail (example)

It can be seen easily that there is a dramatic decrease in 2017 of three of them ROA, ROE and
ROI because of the drop in net earnings of Johnson & Johnson in 2017 from 16,585,439,560
million USD to 1,303,571,429 million USD. The route of decline net earnings was the sudden
deep dive of two items which come from income statement: Current United States taxes on
international operations and Provision for taxes on income. Both of them had increased fourfold
from 3,604 million to 13,967 million at the end of 2017. Annual report of Johnson & Johnson
can explain clearly about this matter. It is related to the new law Tax Cuts and Jobs Act (TCJA)
and SEC Staff Accounting Bulletin 118 (SAB 118). On December 22, 2017, the United States
enacted into law new U.S. tax legislation, referred to as the TCJA. This law includes provisions
for a comprehensive overhaul of the corporate income tax code, including a reduction of the
statutory corporate tax rate from 35% to 21%, effective on January 1, 2018. This new legislation
also eliminated or reduced certain corporate income tax deductions as well as introduced new
provisions that taxed certain foreign income not previously taxed by the United States. The
TCJA also includes a provision for a tax on all previously undistributed earnings of American
companies located in foreign jurisdictions. Undistributed earnings in the form of cash and cash
equivalents are taxed at a rate of 15.5% and all other earnings are taxed at a rate of 8.0%. This
tax is payable over 8 years and will not accrue interest. In December 2017, the SEC provided
regulatory guidance for accounting of the impacts of the TCJA, referred to as SAB 118. Under
the guidance in SAB 118, the income tax effects, which the accounting under ASC 740 is
incomplete, are reported as a provisional amount based on a reasonable estimate. The
reasonable estimate is subject to adjustment during a “measurement period”, not to exceed one
year, until the accounting is complete. The estimate is also subject to the finalization of
management’s analysis related to certain matters, such as developing interpretations of the
provision of the TCJA, changes to certain estimates and amounts related to the earnings and
profits of certain subsidiaries and the filing of tax returns. As a result of the enactment of the
TCJA, the Company recorded a provisional tax cost of $13.0 billion in the fourth quarter of
2017. This provisional charge was assessed as of January 18, 2018 and consisted of a $10.1
billion charge on previously undistributed foreign earnings as of December 31, 2017.(source
from former student)

It can be seen that the decline of earnings would affect a lot to the liquidity ratio as ROE
and ROA had impressed decrease, however, we just saw a little down of ROI because ROI is the
ratio just bases on the operating income and operating expense that not related provision as net
income-the item includes all of kinds of expenses and provision.

+ Debt Management (explain) 1:19:15

Debt to equity ratio = Long term debt/E 1:25:00 ( Long term debt chỉ gồm những khoản nợ dài
hạn ) 1 đồng vốn tương đương Long term debt/E đồng nợ, chỉ số này càng cao thì gánh nặng trả
nợ của doanh nghiệp càng lớn, xác suất phá sản (possibility of bankruptcy) càng cao

Times earned interest = EBIT/ Interest expense 1:26:20 số lần có thể cover đc lãi vay, chỉ số này
càng cao chứng tỏ khả năng trả nợ của doanh nghiệp càng tốt, ngân hàng sẽ nhìn vào chỉ số này
để biết có thể tiến hành cho vay tiếp hay ko

Total debt to equity = Total debt/E = (Long term debt + Short term debt)/E 1:25:35 cán cân nợ/
tỷ lệ đoàn bẩy cao sử dụng nợ nhiều

Trung bình ngành của các doanh nghiệp (so sánh các cty tương đương)

Debt to total asset = D/TA

+ Market value ratios (explain) 1:30:45

EPS (Earning per share: thu nhập trên mỗi cổ phần) = Net income/ number of share outstanding
(số lượng cổ phần đang lưu hành) 1:31:00 EPS càng cao Net income càng lớn, so sánh với cty
cùng ngành để xem thử coi là nhận đc nhiêu đó là tốt chưa
P/E = Market price (giá thị trường của cổ phiếu)/EPS 1:32:25 chỉ số này càng cao thì cổ phiếu
càng hấp dẫn, so sánh với cty cùng ngành

Kết luận tổng quan: sức khỏe tài chính chung của doanh nghiệp như thế nào? Về tính thanh
khoản như thế nào? Về cán cân nợ như thế nào? Về chỉ số thị trường như thế nào? Về hiệu quả
hoạt động như thế nào?

+ Efficiency ratios (turnover ratio)

Part II

1. Introduce the bonds issue in the corp.

Choose company details Long term debt (choose several debentures or notes)

Then, you list some necessary information of these bonds: Bonds (name), maturity, rating, and
yield.

2. + Risks in investing these bonds (read more in your textbook)

Link for reading:

https://www.investopedia.com/ask/answers/05/bondrisks.asp

https://www.davyselect.ie/investment-choices/risks/risks-of-investing-in-bonds.html

Explain in Vietnamese

https://www.saga.vn/6-rui-ro-lon-nhat-khi-dau-tu-trai-phieu~42727

+ The value of bonds, time value of money, and its applying

Bond formula

Calculate the bond prices that are chosen from the beginning

Compare with the market price for the period and give the conclusion

4. Conclusion

5. References