Group assignment

Course: Principles of Accounting - ACC101

Lecturer: Vo Thi Van Na

Topic: Analysis of financial ratios - Tien Son Thanh Hoa Company,

Mekong Fisheries Company and An Phat Bioplastics Company.

No. Name of members Code

1 Nguyen Ha Chau Ngan SS180888

2 Vo Lam Phuc Nhu SS180895

3 Pham Huynh Bao Tran SS181101

4 Nguyen Tran Quynh Dan SS180898

5 Mai Hoang Phuc SS180969

6 Nguyen Le Khang SS180864

7 Bui Hong Ha SS180965

5th November, 2023

TABLE OF CONTENTS
I. INTRODUCTION:..................................................................................................................................................... 2

II. ANALYSIS OF FINANCIAL RATIOS:............................................................................................................2

1. Liquidity:.................................................................................................................................................................. 2

a. Tien Son Thanh Hoa Company:.................................................................................................................2

b. Mekong Fisheries Company:.......................................................................................................................3

c. An Phat Bioplastics Company:...................................................................................................................3

2. Efficiency:................................................................................................................................................................. 3

a. Tien Son Thanh Hoa Company:.................................................................................................................3

b. Mekong Fisheries Company:.......................................................................................................................4

c. An Phat Bioplastics Company:...................................................................................................................4

3. Solvency:................................................................................................................................................................... 5

a. Tien Son Thanh Hoa Company:.................................................................................................................5

b. Mekong Fisheries Company:.......................................................................................................................5

c. An Phat Bioplastics Company:...................................................................................................................6

4. Profitability:............................................................................................................................................................ 6

a. Tien Son Thanh Hoa Company:.................................................................................................................6

b. Mekong Fisheries Company:.......................................................................................................................7

c. An Phat Bioplastics Company:...................................................................................................................7

5. Market Prospects:.................................................................................................................................................8

a. Tien Son Thanh Hoa Company:.................................................................................................................8

b. Mekong Fisheries Company:.......................................................................................................................8

c. An Phat Bioplastics Company:...................................................................................................................9

III. CONCLUSION.............................................................................................................................................................. 9
List of tables
Table 1: Liquidity of Tien Son Thanh Hoa Company.............................................................................3
Table 2: Liquidity of Mekong Fisheries Company..................................................................................4
Table 3: Liquidity of An Phat Bioplastics Company...............................................................................4
Table 4: Efficiency of Tien Son Thanh Hoa Company...........................................................................4
Table 5: Efficiency of Mekong Fisheries Company................................................................................5
Table 6: Efficiency of An Phat Bioplastics.............................................................................................6
Table 7: Solvency of Tien Son Thanh Hoa Company.............................................................................7
Table 8: Solvency of Mekong Fisheries Company..................................................................................7
Table 9: Solvency of An Phat Bioplastics Company...............................................................................8
Table 10: Profitability of Tien Son Thanh Hoa Company.......................................................................8
Table 11: Profitability of Mekong Fisheries Company...........................................................................9
Table 12: Profitability of An Phat Bioplastics Company......................................................................10
Table 13: Market Prospects of Tien Son Thanh Hoa Company............................................................11
Table 14: Market Prospects of Mekong Fisheries Company.................................................................11
Table 15: Market Prospects of An Phat Bioplastics Company..............................................................12
 I. INTRODUCTION:
This financial ratio analysis aims to assess the financial performance and position of three
companies: Tien Son Thanh Hoa Company, Mekong Fisheries Company, and An Phat
Bioplastics Company. By examining various ratios across different categories including liquidity,
efficiency, solvency, profitability, and market prospects, we can gain insights into the companies'
financial health, operational efficiency, ability to meet obligations, profitability, and market
valuation.
In this analysis, we will examine liquidity ratios to evaluate the companies' ability to meet short-
term obligations, efficiency ratios to assess their operational effectiveness, solvency ratios to
measure their long-term debt-paying ability, profitability ratios to gauge their ability to generate
profit, and market prospects ratios to evaluate their market valuation and investor sentiment.

II. ANALYSIS OF FINANCIAL RATIOS:

1. Liquidity:
a. Tien Son Thanh Hoa Company:

Table 1: Liquidity of Tien Son Thanh Hoa Company

Liquidity

Financial ratio 2022 2021 2020 2019 2018

Current ratio 2,09 2,97 1,87 2,09 1,54

Acid-test ratio 2,02 2,64 1,68 1,67 1,26

The current ratio of Tien Son Thanh Hoa Joint Stock Company has increased from 1.54 in 2018
to 2.09 in 2022, indicating a significant improvement in its ability to meet short-term obligations.
Similarly, the acid-test ratio has also increased from 1.26 in 2018 to 2.02 in 2022, demonstrating
an improved ability to meet short-term obligations without relying heavily on inventory sales.
Overall, these figures show that Tien Son Thanh Hoa Joint Stock Company has made notable
progress in liquidity and meeting short-term obligations from 2018 to 2022.

b. Mekong Fisheries Company:

Table 2: Liquidity of Mekong Fisheries Company

Liquidity

Financial ratio 2022 2021 2020 2019 2018

Current ratio 22,79 29,41 11,05 12,37 12,16

Acid-test ratio 9,54 13,66 3,17 4,69 7,51

 Mekong Fisheries Company demonstrates strong financial stability and a prompt ability to settle
short-term debts and obligations. The company's current ratio and acid-test ratio are notably high,
at 22.79 and 9.54 respectively. This indicates the company's proficiency in utilizing easily
convertible assets to efficiently meet its short-term financial commitments. However, for a
comprehensive assessment of the company's financial health, it is important to consider
additional information such as profitability and debt structure.

c. An Phat Bioplastics Company:

Table 3: Liquidity of An Phat Bioplastics Company

Liquidity

Financial ratio 2022 2021 2020 2019 2018

Current ratio 1,76 1,63 1,19 1,54 1,24

Acid-test ratio 1,14 1,29 0,90 1,12 0,93

The current ratio has increased from 1.24 in 2018 to 1.76 in 2022, indicating the company's
improved ability to repay short-term debts with current assets.
The acid-test ratio has risen from 0.93 in 2018 to 1.14 in 2022, suggesting that the company has
enhanced its ability to meet short-term obligations without relying heavily on inventory.
Overall, the company's liquidity position has improved over the years, as indicated by the
increasing current ratio and acid-test ratio. These ratios demonstrate the company's better short-
term debt repayment capacity and reduced dependence on inventory.

2. Efficiency:
a. Tien Son Thanh Hoa Company:

Table 4: Efficiency of Tien Son Thanh Hoa Company

Efficiency

Financial ratio 2022 2021 2020 2019 2018

Accounts receivable turnover 12,10 7,79 5,73 13,08 22,82

Inventory turnover 50,67 23,86 12,15 11,60 25,40

Days’ sales uncollected 30,16 46,83 63,70 27,90 16,00

Days’ sales in inventory 7,20 15,30 30,05 31,48 14,37

 Total asset turnover 0,95 0,61 0,49 0,50 0,49

The accounts receivable turnover ratio has decreased from 12.10 in 2022 to 5.73 in 2020, before
increasing to 22.82 in 2018. This indicates a fluctuating trend in the company's ability to collect
payments from customers.
The inventory turnover ratio has shown a declining trend from 50.67 in 2022 to 12.15 in 2020,
before slightly increasing to 25.40 in 2018. This suggests that the company took longer to sell
and consume its inventory in 2022 compared to previous years.
The days' sales uncollected, which represents the average number of days it takes for the
company to collect payments from customers, has shown a fluctuating trend. It decreased from
30.16 days in 2022 to 27.90 days in 2019, before increasing to 46.83 days in 2021. This indicates
a longer collection period in recent years.
The days' sales in inventory, which represents the average number of days it takes for the
company to sell its inventory, has shown a fluctuating trend as well. It decreased from 7.20 days
in 2022 to 7.20 days in 2018. This suggests that the company was able to sell its inventory
relatively quickly in most of the years.
The total asset turnover ratio has shown a varying pattern, ranging from 0.95 in 2022 to 0.49 in
2020 and 2018. This indicates fluctuations in the company's efficiency in generating sales
relative to its total assets.

b. Mekong Fisheries Company:

Table 5: Efficiency of Mekong Fisheries Company

Efficiency

Financial ratio 2022 2021 2020 2019 2018

Accounts receivable turnover 21,09 10,74 6,66 8,60 7,02

Inventory turnover 1,98 1,24 1,04 2,20 3,47

Days’ sales uncollected 17,30 33,97 54,83 42,42 52,02

Days’ sales in inventory 184,44 294,32 349,53 165,70 60,97

Total asset turnover 1,01 0,65 0,55 0,94 0,95

Mekong Fisheries Company demonstrates strong financial efficiency across various metrics. It
has a high accounts receivable turnover rate of 21.09, indicating effective and swift collection
from customers. The inventory turnover stands at 1.98, suggesting a balanced turnover rate. The
company efficiently manages its collection process with a low average of 17.30 days' sales
uncollected. However, it tends to hold inventory for a longer period, with an average of 184.44
days' sales in inventory. Despite this, Mekong Fisheries Company effectively utilizes its assets to
 generate revenue, as shown by the total asset turnover ratio of 1.01. Overall, the company's
financial metrics highlight its efficiency in collecting payments and utilizing assets to drive
revenue.

c. An Phat Bioplastics Company:

Table 6: Efficiency of An Phat Bioplastics

Efficiency

Financial ratio 2022 2021 2020 2019 2018

Accounts receivable turnover 8,23 6,71 3,70 4,86 4,88

Inventory turnover 10,19 12,18 6,14 7,88 10,49

Days’ sales uncollected 25.74 24.02 32.42 27.96 15.75

Days’ sales in inventory 35,81 29,96 59,49 46,30 34,80

Total asset turnover 1,47 1,41 0,90 1,19 1,32

Accounts Receivable Turnover has increased from 4.88 times in 2018 to 8.23 times in 2022,
indicating improved efficiency in collecting receivables. Inventory Turnover ratio has decreased
from 10.49 in 2018 to 10.19 in 2022, with a notable dip to 6.14 in 2020, which could point to
slower inventory movement or overstocking issues. Days' Sales Uncollected has decreased from
15.75 days in 2018 to 25.74 days in 2022, indicating that it now takes the company longer to
collect its receivables. Days' Sales in Inventory has fluctuated, with a high of 59.49 days in 2020
and a decrease to 35.81 days in 2022, suggesting that the company was able to reduce the time
inventory is held before sale compared to 2020. Total Asset Turnover has varied, with a low of
0.90 in 2020 and a subsequent improvement to 1.47 in 2022, indicating better use of assets to
generate sales in the most recent year.

3. Solvency:
a. Tien Son Thanh Hoa Company:

Table 7: Solvency of Tien Son Thanh Hoa Company

Solvency

Financial ratio 2022 2021 2020 2019 2018

Debt ratio 0,31 0,32 0,27 0,32 0,34

Equity ratio 0,69 0,68 0,73 0,68 0,66

Debt-to-equity ratio 0,44 0,46 0,36 0,46 0,52

 Times interest earned 5,83 3,61 1,77 2,48 2,45

Tien Son Thanh Hoa Joint Stock Company has maintained a relatively stable level of debt and a
consistent equity ratio over the years. The debt ratio ranged from 0.27 in 2020 to 0.34 in 2018,
indicating a moderate level of debt in the company's financial structure.
The equity ratio ranged from 0.66 in 2018 to 0.73 in 2020, suggesting a consistent level of equity
financing.
The debt-to-equity ratio fluctuated from 0.36 in 2020 to 0.52 in 2018, indicating a reasonable
level of debt relative to equity.
Moreover, the times interest earned ratio improved significantly from 1.77 in 2020 to 5.83 in
2022, reflecting an enhanced ability to meet interest obligations.
Overall, Tien Son Thanh Hoa Joint Stock Company demonstrates a balanced solvency position,
maintaining a moderate level of debt and showing an improved capacity to cover interest
expenses.

b. Mekong Fisheries Company:

Table 8: Solvency of Mekong Fisheries Company

Solvency

Financial ratio 2022 2021 2020 2019 2018

Debt ratio 0,04 0,03 0,08 0,07 0,08

Equity ratio 0,96 0,97 0,92 0,93 0,92

Debt-to-equity ratio 0,04 0,03 0,09 0,08 0,09

Times interest earned 0,00 1,28 -56,53 67,43 0,00

Mekong Fisheries Company maintains a reasonable level of capital and debt utilization. The debt
ratio ranges from 0.03 to 0.08 over the years, and the equity ratio ranges from 0.92 to 0.97. The
company also maintains a stable debt-to-equity ratio, ranging from 0.03 to 0.09. However, there
are some years where the pre-tax earnings are not sufficient to cover interest expenses. Overall,
the company demonstrates a balanced approach in financial management and debt utilization.

c. An Phat Bioplastics Company:

Table 9: Solvency of An Phat Bioplastics Company

Solvency

Financial ratio 2022 2021 2020 2019 2018

 Debt ratio 0,43 0,46 0,53 0,59 0,60

Equity ratio 0,57 0,54 0,47 0,41 0,40

Debt-to-equity ratio 0,75 0,84 1,13 1,45 1,53

Times interest earned 1,07 2,62 1,58 2,65 2,02

The company's debt ratio has been increasing steadily, ranging from 0.43 to 0.60, indicating a
higher reliance on debt financing to support its assets. At the same time, the equity ratio has been
declining, ranging from 0.40 to 0.57, suggesting a decreasing proportion of assets being financed
by equity. The debt-to-equity ratio has also been on the rise, ranging from 0.75 to 1.53, indicating
a higher level of debt compared to equity over time. However, Solvecy's ability to cover interest
expenses has remained relatively stable, with the times interest earned ratio fluctuating between
1.07 and 2.65. Despite this, further analysis is necessary to assess the overall financial health and
solvency of the company.

4. Profitability:
a. Tien Son Thanh Hoa Company:

Table 10: Profitability of Tien Son Thanh Hoa Company

Profitability

Financial ratio 2022 2021 2020 2019 2018

Profit margin ratio 9,26% 6,09% 4,89% 7,13% 8,12%

Gross margin ratio 15,89% 12,25% 12,57% 14,56% 16,90%

Return on total assets 8,77% 3,70% 2,38% 3,54% 3,99%

Return on common
stockholders’ equity 12,72% 5,27% 3,36% 5,28% 6,35%

Book value per

common share 11462 19031 12199 11814 11194

Basic earnings per share 1395 820 403 608 689

Tien Son Thanh Hoa Joint Stock Company has shown improving profitability, with higher profit
margin ratios ranging from 4.89% to 9.26%. The company has effectively managed costs,
maintaining a consistent gross margin ratio between 12.25% and 16.90%. Return on total assets
has varied from 2.38% to 8.77%, indicating improved efficiency in asset utilization. Return on
common stockholders' equity has fluctuated between 3.36% and 12.72%. Book value per
common share has increased over time, signifying growth in shareholders' equity. Basic earnings
per share have varied. Overall, the company has demonstrated positive profitability trends,
effective cost management, and returns for shareholders.

b. Mekong Fisheries Company:

Table 11: Profitability of Mekong Fisheries Company

Profitability

Financial ratio 2022 2021 2020 2019 2018

Profit margin ratio 7,97% 0,17% -9,90% 3,84% 4,39%

Gross margin ratio 12,86% 5,57% 0,12% 9,78% 10,59%

Return on total assets 8,05% 0,11% -5,46% 3,63% 4,17%

Return on common stockholders’

equity 8,37% 0,12% -5,90% 3,93% 4,53%

Book value per common share 18040 18917 18572 17811 19444

Basic earnings per share 1455 22 -1145 700 881

The profit margin ratio fluctuates between -9.90% and 7.97%, indicating inconsistent
profitability over time. Similarly, the gross margin ratio ranges from 0.12% to 12.86%, reflecting
both low and high gross profit margins. The return on total assets varies from -5.46% to 8.05%,
indicating mixed performance in generating profits from assets. The return on common
stockholders' equity ranges from -5.90% to 8.37%, demonstrating varying profitability for
common stockholders. The book value per common share ranges from 17,810.87 to 19,444.19
currency units, reflecting the asset value per share. Lastly, the basic earnings per share range
from -1,145.00 to 1,455.00 currency units per share, indicating the company's earnings per share.
These specific figures illustrate the company's profitability and shareholder value, which require
further analysis to assess its overall financial performance.

c. An Phat Bioplastics Company:

Table 12: Profitability of An Phat Bioplastics Company

Profitability

Financial ratio 2022 2021 2020 2019 2018

Profit margin ratio 0,77% 2,47% 3,81% 5,30% 2,65%

Gross margin ratio 7,10% 9,90% 10,46% 11,26% 8,40%

Return on total assets 1,13% 3,49% 3,42% 7,82% 5,64%

 Return on common stockholders’ equity 2,02% 6,84% 7,78% 15,75% 9,21%

Book value per common share 17511 18680 20101 19017 18434

Basic earnings per share 433 994 1310 2690 1115

The profit margin ratio represents the company's net profit as a percentage of its total revenue.
The ratio has fluctuated over the years, with a decrease from 5.30% in 2019 to 0.77% in 2022.
This indicates a decline in the company's ability to generate profit relative to its revenue.
The gross margin ratio measures the company's gross profit as a percentage of its total revenue.
The ratio has shown a declining trend from 11.26% in 2019 to 7.10% in 2022. This suggests a
decrease in the company's ability to generate profit after accounting for the cost of goods sold.
The return on total assets indicates the company's profitability in relation to its total assets. The
return on total assets has experienced fluctuations, with a decrease from 7.82% in 2019 to 1.13%
in 2022. This implies a decline in the company's efficiency in generating profit from its total
assets.
The return on common stockholders' equity represents the profitability of the company's common
stockholders' equity. The return on common stockholders' equity has shown variations, with a
decrease from 15.75% in 2019 to 2.02% in 2022. This indicates a decline in the company's ability
to generate profit for its common stockholders' investment.
The book value per common share represents the value of the company's common stock per
outstanding share. The book value per common share has increased over the years, indicating
growth in shareholders' equity.
The basic earnings per share indicates the company's earnings per outstanding share. The basic
earnings per share have shown fluctuations, with significant increases from 2018 to 2019,
followed by a decrease in 2022.
Overall, the profitability has experienced fluctuations in recent years. The company has
encountered challenges in maintaining and increasing its profit margins, return on assets, and
return on common stockholders' equity. However, it has shown growth in book value per
common share, and the fluctuations in basic earnings per share suggest varying levels of
profitability.

5. Market Prospects:
a. Tien Son Thanh Hoa Company:

Table 13: Market Prospects of Tien Son Thanh Hoa Company

Market Prospects

Financial ratio 2022 2021 2020 2019 2018

 Price-earnings ratio 3,55 23.04 0 0 0

Dividend yield 6 6 0 0 0

The P/E ratio of the company exhibited significant fluctuations during the period from 2022 to
2018. It decreased from 23.04 in 2022 to 3.55 in 2018. This suggests that the company's stock
price relative to its earnings experienced significant changes during this time. The decrease in
P/E could be attributed to various factors, including shifts in market expectations and the
company's financial performance.
The company maintained a consistent dividend yield of 6% from 2022 to 2018. This indicates
that the company provided a stable dividend payout to its shareholders throughout this period.
However, there is no information regarding any changes in the dividend amount or the company's
dividend policy during this time.

b. Mekong Fisheries Company:

Table 14: Market Prospects of Mekong Fisheries Company

Market Prospects

Financial ratio 2022 2021 2020 2019 2018

Price-earnings ratio 7,08 584,37 -9,82 15,02 13,67

Dividend yield 0 0 4 2 7

Mekong Fisheries Company exhibits significant price volatility relative to earnings, as evidenced
by its fluctuating price-earnings ratio. The ratio has ranged from a low of -9.82 to a high of
584.37, indicating substantial price fluctuations compared to its earnings.
Additionally, the company's dividend policy also experiences fluctuations. In some years, the
dividend yield has been low or non-existent, while in others, it ranges from 2% to 7%. This
variability suggests that the company's dividend policy is subject to changes and may not be
consistent over time.

c. An Phat Bioplastics Company:

Table 15: Market Prospects of An Phat Bioplastics Company

Market Prospects

Financial ratio 2022 2021 2020 2019 2018

Price-earnings ratio 15,79 19,39 10,53 4,72 10,98

Dividend yield 0 2 3 4 10
 The price-earnings (P/E) ratio measures the valuation of a company's stock relative to its
earnings per share (EPS). The P/E ratio has shown fluctuations over the years, ranging from 4.72
in 2019 to 19.39 in 2021. A lower P/E ratio suggests that the stock may be undervalued, while a
higher P/E ratio indicates a higher valuation.
The dividend yield represents the dividend income generated by a stock relative to its market
price. The dividend yield has varied over the years, with an increase from 0% in 2022 to 10% in
2018. A higher dividend yield generally indicates a higher return on investment for shareholders.
These ratios provide insights into the market prospects of Tien Son Thanh Hoa Company. The
fluctuations in the price-earnings ratio suggest changing investor sentiment and expectations
about the company's future earnings. The dividend yield indicates the company's dividend policy
and its ability to provide a return to shareholders through dividends.

III. CONCLUSION
In conclusion, the financial ratio analysis of Tien Son Thanh Hoa Company, Mekong Fisheries
Company, and An Phat Bioplastics Company provides valuable insights into the financial
performance and position of these companies. By examining liquidity, efficiency, solvency,
profitability, and market prospects ratios, we have gained a comprehensive understanding of their
financial health and prospects.
Regarding liquidity, Tien Son Thanh Hoa Company has shown improvements in its current ratio
and acid-test ratio over the years, indicating an enhanced ability to meet short-term obligations.
Mekong Fisheries Company has maintained a stable liquidity position, while An Phat Bioplastics
Company's liquidity ratios require further attention.
In terms of efficiency, all three companies have shown varying levels of operational
effectiveness. Further analysis of their inventory turnover, receivables turnover, and asset
turnover ratios would provide deeper insights into their efficiency in managing resources.
Solvency ratios indicate the long-term debt-paying ability of the companies. Tien Son Thanh Hoa
Company and An Phat Bioplastics Company have demonstrated satisfactory solvency positions,
while Mekong Fisheries Company's solvency ratios require closer examination.
Profitability ratios reveal the companies' ability to generate profit. Tien Son Thanh Hoa
Company has experienced fluctuations in profit margins and returns on assets and equity.
Mekong Fisheries Company has consistently shown strong profitability, while An Phat
Bioplastics Company's profitability ratios require improvement.
Market prospects ratios shed light on the companies' market valuation. Tien Son Thanh Hoa
Company's price-earnings ratio suggests fluctuating investor sentiment, while Mekong Fisheries
Company and An Phat Bioplastics Company's market prospects ratios need further analysis to
assess their market valuation and investor confidence.
Overall, this financial ratio analysis highlights the strengths, weaknesses, and areas for
improvement within each company. It provides valuable insights for investors, stakeholders, and
decision-makers in evaluating the financial performance and prospects of Tien Son Thanh Hoa
Company, Mekong Fisheries Company, and An Phat Bioplastics Company. Further analysis and
consideration of industry benchmarks will contribute to a more comprehensive assessment of
these companies' financial standing and potential future growth.