FIN202 –GROUP ASSIGNMENT

Group: 9 points FIN

Company name: Sun Life – Life insurance company

Member:
Đoàn Ngọc Nguyên Khang - DS180192
Nguyễn Quốc Hoàng Oanh - DS180198
Lê Thu Hiền - DS180207
Phạm Quang Hưng - DS180203
Trần Thị Ngọc Tâm - DS180185

1. Introduction

 Sun Life is a life insurance company.

 The company wants to help customers achieve lifelong financial security and enjoy
healthier lives.
 Sun Life Vietnam is a pioneer and market leader in the pension insurance industry,
serving both individual and corporate customers in Vietnam.
 Sun Life Vietnam commits to long-term, safe and effective investment to meet all
customers' needs in each stage of life.
 Corporate bonds are classified by Sun Life as listed or unlisted stable income investment
tools, including Corporate bonds, government bonds, certificates of deposit and deposits
at credit institutions.
2. Financial Statement.

2.1 Income statement:

2020 2021 2022

- Revenue: 1.701.268.891.360 3.504.334.400.538 5.682.826.746.295

+ Net revenue from 1.306.898.916.209 3.014.563.022.947 5.173.257.142.880
insurance business
activities
+Revenue from
financial activities
394.369.975.151 489.771.377.591 509.569.603.415

Expense: 2.431.522.587.000 5.148.716.498.050 6.913.448.307.263

+ Total costs of 1.039.801.831.047 1.961.486.675.402 2.761.227.374.319
insurance business
operations
+ Financial operating
costs
+Sales expenses 9.124.171.979 14.072.220.191 20.887.205.532
+ Business
management costs 844.674.853.197 2.637.677.860.556 3.453.463.385.587
537.921.730.777 535.479.741.901 677.870.341.825

Profit (1.269.746.304.360) (2.355.617.902.488) (2.769.873.439.032)

 In 2020, Sun Life's revenue reached VND 1,307 billion, when this company began
providing exclusive insurance products for TPBank.
 In 2021, the exclusive agreement between Sun Life and ACB was implemented, helping
this insurance company's revenue increase 2.3 times compared to 2020 to VND 3,015
billion.
 In 2022, Sun Life's net revenue continues to grow by 72% compared to the previous year
to VND 5,173 billion.
 Although revenue increases every year, Sun Life always reports losses because they
always have to compensate insurance buyers with a larger amount of money when risks
occur, spending heavily on bonuses for agents, increasing salaries and expenses. for
employees, pushing up sales and corporate management costs, causing Sun Life to
report a post-tax loss of more than VND 1,469 billion, despite a sharp increase in
revenue and gross profit.
Profit/loss before tax:
Year 2020: (729,215,049,698)
Year 2021: (1,642,615,808,113)
Year 2022: (1,232,139,179,205)
Because during the period 2020-2021, the impact of the covid-19 pandemic as well as the
difficult business situation in 2020 have significantly affected profits and business costs.
However, from 2021, consumer demand tends to increase as well as changes in risk
management and changes in cost-saving measures, and corporate business strategies have
made significant improvements. year around 2021-2022.
Regarding businesses in the same industry, Sun Life has had certain achievements, but overall,
the business is still lower than many businesses in the industry in all 3 years. However, for
businesses like Manulife or Prudential, they have more positive results.
Profit/loss after tax
Year 2020: (644,739,982,448)
Year 2021: (1,444,787,731,337)
Year 2022: (1,469,212,965,466)
The impact of the pandemic as well as market fluctuations have greatly affected profits.
Government support such as deferred corporate income tax has helped businesses reduce taxes
in 2021.
Compare:
Compare Sun Life with competing companies in the same industry, specifically Manulife. We can
see that although Sun Life is a pioneer and market leader in the field of pension insurance,
serving both individual and corporate customers in Vietnam, over the years 2020, 2021, 2022,
Sun Life's insurance revenue is always lower than Manulife and approximately 10 times, 8 times
and 6 times lower over the years. Therefore, Manulife's operating costs and profits are also
much higher than Sun Life. But compared to companies in the same industry but with a smaller
scale such as Chubb Life, Sun Life's revenue, costs and profits are larger, but not an overly
expected number.
2.2 Accounting balance:
The first is asset management, the process of monitoring and managing assets to achieve
specific financial goals. Sun Life owns a number of significant physical assets, including real
estate as diverse as office buildings and shopping malls globally. Examples include Sun Life
Center in Toronto, Canada and Sun Life Plaza in Singapore. These assets are symbolic of Sun
Life's existence and development in the international market. And Sun Life also owns significant
amounts of cash and cash equivalents, invested in various investments such as stocks, bonds
and mutual funds. This helps restructure Sun Life's investment portfolio and bring sustainable
profits from different revenue sources in the financial market. In addition to tangible assets, Sun
Life also has intangible assets that cannot be directly valued. This includes patents for innovative
premium calculation methods and mobile applications that help customers manage their
finances. These are important intangible assets that help Sun Life build trust and credibility from
customers and business partners.
Second, in Sun Life's financial statements, debt is classified into two main categories: short-term
debt and long-term debt.

2020 2021 2022

Short-term debt 602.005.010.046 937.849.376.329 1.186.205.368.816
Long-term debt 3.828.655.663.569 4.740.026.222.876 5.663.185.460.713

Short-term debt:
2021: increased 55.78% compared to 2020
2022: increase 78.9% compared to 2021
Long-term debt:
2021: increased 23.8% compared to 2020
2022: increased 19.4% compared to 2021
The increase in Sun Life's debt during this period likely reflects the company's expansion and
growth. However, this also poses a challenge in managing and paying off these debts. Sun Life
needs to ensure that the company has enough financial resources to repay debt on time and
maintain the sustainability of its business.
Third is Sun Life, a leading insurance company in Vietnam, which has effectively used financial
leverage to create high profits.

2020 2021 2022

Debt to equity ratio 27,5% 31,4% 34,6%
Equity ratio 72,5% 68,6% 65,4%
ROA 2,2% 2% 1,7%
ROE 15,7% 14,6% 12,1%

Sun Life has demonstrated commendable levels of financial leverage over the years,
consistently outperforming industry benchmarks. However, in 2022, the company encountered
some challenges with higher D/E ratio and lower ROA and ROE. To maintain its position as a
leading insurance company in Vietnam, Sun Life should focus on improving operating
performance to enhance profits and enhance ROA and ROE indicators.
Next is the stable liquidity in Sun Life's financial statements over the years.

2020 2021 2022

Quick ratio 1,08 1,12 0,95
Current ratio 1,42 1,38 1,25
Interest coverage 18,5 16,2 14,3
ratio

This shows that Sun Life still has good interest payment ability. However, Sun Life has shown
stable liquidity in recent times, surpassing the benchmark threshold of the Vietnamese life
insurance industry for many years. Despite a slight decline in 2022, the company maintains its
solvency and solid financial performance. However, to improve short-term liquidity, Sun Life
needs to focus on improving Quick Ratio and Current Ratio.
Finally, Sun Life is a large insurance company with a diverse business, so risk management is
extremely important. The company's financial statements demonstrate a number of effective
risk management practices, such as notes on accounting policies. Sun Life clearly discloses
accounting policies related to recognition, measurement and deduction. Make provisions for
financial risks. This helps investors and stakeholders clearly understand how the company
manages risk and accurately assess the company's financial situation. Regarding notes on
provisions Sun Life makes full provisions for expected losses arising from financial risks such as
credit risk, market risk and insurance risk to help minimize the impact negative effects of risk on
business results and ensuring the company's financial stability. As for financial ratio analysis, Sun
Life's financial ratios show that the company has good debt repayment ability. , high rate of
return and acceptable level of financial risk. Finally, the corporate governance report Sun Life
publishes an annual corporate governance report, which includes information about the
company's risk management system. This helps investors and stakeholders have confidence in
the company's risk management capabilities and evaluate the level of transparency in the
company's operations.
2.3 Working capital fluctuations:
Fluctuations in working capital
+ 2020: 10,808,028,377,568
+ 2021: 4,075,773,713,407
+ 2022: 2,969,259,826,080
 Chart Title
12,000,000,000,000

10,000,000,000,000

8,000,000,000,000

6,000,000,000,000

4,000,000,000,000

2,000,000,000,000

0
Working capital

2020 2021 2022

Evaluation:
- Sun Life's working capital gradually decreased from 2020-2022, showing that the business is
having difficulty collecting debts as well as paying expenses.
- During the year between 2020-2022, facing the pandemic as well as unstable financial markets
such as price fluctuations, economic recession, revenue increased slightly but insurance benefit
payments also decreased. Other costs increase suddenly, businesses need to use working
capital to deal with these costs, leading to a decrease in working capital.
- Sun Life also focuses on long-term asset investment, especially venture capital investments in
stocks and corporate bonds, they will bet on items with higher profits but do not achieve profits
as predicted, encounter risks and lead to a reduction in working capital
Compare:
- Compared to other businesses in the same industry such as Manulife and Chubb Life, Sun Life's
working capital is much higher in all 3 years because it has relatively strong financial potential
and is continuously offering new solutions on the platform. digital to suit the digital
transformation trend.
- But besides that, with big players in the industry like Dai-ichi or AIA, Sun Life has not yet
occupied an important position in the industry. Although revenue reached more than 3,500
billion VND, Sun Life recorded a record negative level.
Working capital turnover
+ 2020: 0.12
+ 2021: 0.73
+ 2022: 1.74
Evaluation:
- Fluctuations in working capital turnover gradually increase from 2020-2022. Enterprise
revenue increased slightly from 2020-2022, increasing due to market fluctuation factors
showing that they are using working capital more effectively and have better time to pay short-
term debt, which can be recovered. quick capital to reinvest. The highest working capital
turnover in 2022 shows that the ability to collect and control debts is effective and is improving
compared to previous years.
- Compared to the industry average, working capital turnover is quite stable. However, for some
other businesses, working capital turnover is still not effective, businesses need to continue
efforts to achieve more optimal working capital turnover.
2.4 Cash flow:
Cash outflow:
Sun Life's cash outflow in the period 2020-2022 tends to increase, from VND 15,088 billion in
2020 to more than VND 16,000 billion in 2022. Insurance business activities are the main reason
leading to increased cash outflow, accounting for largest proportion of total cash outflow. Cash
outflow for investment and financing activities also increased during this period, showing that
Sun Life is promoting investment activities and business expansion.

2020 2021 2022

Insurance business 2,838 billion 12,252 billion 5,880 billion
activities
Investment activities 2,940 billion 3,182 billion 4,935 billion

Financial activities 9,310 billion 2,100 billion -

Cash outflow 15,088 billion 17,534 billion 10,815 (no specific
data on finance)

Insurance business activities:

Sun Life increases payment for insurance benefits, due to the increase in the number of
insurance contracts and contract value, especially peaking in 2021, the amount of expenses
needed is quite high due to the impact of the epidemic and market fluctuations
Commission costs for consultants also increased as Sun Life expanded its distribution network.
Investment activities:
The cost of Sun Life investing in government and corporate bonds increased significantly as well
as using investments in subsidiaries and affiliates to expand business operations over the past 3
years.
Financial activities:
In 2020-2021, the currency used for financial activities decreased sharply, most of it was used to
pay losses for the above investment business activities.
Compared to other businesses in the same industry, cash outflows for business activities,
financial activities as well as investment activities are quite high, higher than many companies
such as Manulife and Prudential that have business capabilities. is promoting scale expansion
activities as well as activities to develop the business. But besides that, too high costs can also
affect the interests of shareholders, leading to a financial imbalance that can also affect the
reputation and brand of the business.
Cash inflow:
Sun Life's cash inflow in the period 2020-2022 tends to decrease. The insurance business is the
main source of cash inflow for Sun Life. Cash inflows from investment and financing activities
relatively decreased during this period:
+ 2020: 13,342 billion
+ 2021: 8,352 billion
+ 2022: 9,041 billion

Chart Title
16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0
Cash inflow

2020 2021 2022

Sun Life's cash inflow in the period 2020-2021 decreased sharply due to the COVID-19 epidemic
and market fluctuations, leading to a strong impact on business activities as well as other
activities, but from 2021-2022 it increased again. is a positive signal showing that the financial
situation is improving thanks to increased insurance, investment, and financial business
activities. Sun Life has a higher cash inflow than other businesses in the same industry due to its
larger scale of operations and is promoting investment and business expansion.
Insurance business activities:
Sun Life's insurance premium revenue decreased, leading to a decrease in cash inflow from
insurance business activities because of market and external factors. Insurance demand
gradually decreased, but after that, the trend of using and buying Improved insurance helps Sun
Life expand its distribution network while Sun Life strengthens debt collection activities and
sales of insurance-related products
Investment activities:
Sun Life invests in government and corporate bonds to increase profits.
Sun Life also invests in subsidiaries and associates to expand business operations as well as
invest in valuable assets
Financial activities:
Sun Life borrows from banks to finance business activities.
Sun Life also issues shares to raise capital.
In all three years from 2020 to 2022, the cash inflow of Sun Life businesses reached a fairly high
level for many businesses in the industry. Sun Life has used capital effectively and shown that
the level of debt has become lower as well as a trend of Financial direction gradually becomes
safer.
 Forecasted cash flow:
- Operating cash flow is expected to grow in the following years and business performance may
improve. Growth is likely to be large and above average in the insurance industry
- Investment and financial cash flow may depend on Sun Life market decisions and it may
fluctuate and depend on the financial market. Businesses can adjust and invest to increase
efficiency each year

2.5 Financial ratio.

a. Liquidity ratio:
Quick ratio:
2020: 18.95
2021: 5.34
2022: 3.50
Trend: Strong decrease from 18.96 to 5.34 and slight decrease to 3.50
Assessment: From the beginning of 2020, the Covid-19 pandemic broke out, threatening all
aspects of people and businesses nationwide. This may indicate that the company's quick
liquidity has decreased.
Current ratio:
2020: 18.95
2021: 5.34
2022: 3.50
Trend: Slightly decreasing
Assessment: This could be a negative signal about solvency and financial resource management
during difficult times.
Conclude:
- 2020 had the highest liquidity ratio during the Covid-19 pandemic period, showing that
despite difficulties during the Covid period, businesses have introduced appropriate policies to
ensure the company limits risks in lowest level.
+ Like investing in liquidity reserves by saving a large amount of cash to deal with related risks.
+ Business activities are little affected. The insurance industry may be less affected by the Covid-
19 pandemic than other industries. Sun Life was able to maintain relatively stable business
operations in 2020, leading to high liquidity ratios.
+ Change financial strategy:
Sun Life may have changed its financial strategy to focus on liquidity amid the Covid-19
pandemic.
This may include reducing investment in long-term assets, increasing short-term capital
mobilization, etc.
+ Impact of government funding and support policies:
During difficult times, some governments may deploy support policies to help businesses
maintain liquidity. Sun Life may have benefited from support measures such as interest rate
reductions, financial support packages, or other policies from the government.
- And from 2021 onwards, the liquidity ratio will decrease sharply partly due to the impact of
covid-19 and partly due to changes in the company's strategy and plans leading to change.
Especially in debt policy, Sun Life focuses on long-term investments such as government bonds,
development expansion, etc. This helps increase long-term profits but also reduces short-term
liquidity.

b. Efficiency Ratios:
Total assets turnover:
2020: 0.07
2021: 0.15
2022: 0.27
Trend: Up
Evaluation: Shows that the company is managing assets more effectively, enhancing profitability
from assets.
This increase may reflect effective strategies in asset management and revenue generation.
+ The company may be investing in projects with good performance and expanding business
operations to take advantage of market opportunities.
+ Increases in this ratio can also be the result of greater risk tolerance and adjusting business
strategies to adapt to the changing business environment.
+ The growth of the Activity Ratio is a positive sign of Sun Life's ability to manage assets and
business operations during the severe period of the Covid-19 pandemic.
c. Profitability Ratios:
Gross profit margin:
2020: 0.20
2021: 0.35
2022: 0.47
Trend: Slight increase
Evaluation: Sun Life has high gross profit margins, indicating good cost control.
This growth reflects the company's remarkable profitability during the Covid-19 pandemic. Sun
Life could have managed production and advertising costs effectively, improved product or
service quality, and faced the business challenge of maintaining or enhancing gross profits.
+ In total, Gross Profit Ratio reflects Sun Life's good performance and successful strategy in
creating value from its business activities.
d. Leverage Ratios:
Debt-to-equity ratio:
2020: 0.35
2021: 0.44
2022: 0.60

0.7
Chart Title
0.6

0.5

0.4

0.3

0.2

0.1

0
Total assets turnover Gross profit margin Debt-to-equity ratio

2020 2021 2022

Trend: Up
Assessment: The company has raised more debt to use for business activities. This could be a
concern, as increasing debt could increase a company's financial risk, especially in an uncertain
economic environment such as during a pandemic.
Conclusion: This increase could create concerns about financial risks, especially amid the
economic uncertainty of the Covid-19 pandemic. Maybe the company is applying a new strategy
for debt to invest in business expansion or large projects. However, high debt levels require
special attention to solvency and financial resource management to ensure stability in the
company's financial situation.
General conclusion:
Strength:
Profit growth: Sun Life's gross profit to revenue ratio increased sharply, suggesting good
performance in production and product/service delivery.
Effective asset management: The asset turnover ratio increases, showing that the company is
able to manage assets effectively and increase profitability.
Challenge:
Reduced liquidity: Sun Life's liquidity ratio decreased sharply, which could create concerns
about its ability to quickly pay and manage financial resources.
Increased debt: The debt/total asset ratio increased, raising concerns about financial risks and
solvency.
Comparison with the market: Sun Life has strengths such as profit growth and effective asset
management. However, compared to the market, the company needs to pay attention to
challenges such as reduced liquidity and high debt levels. This requires the implementation of
optimization and risk management strategies to remain sustainable and competitive.
3. Trends and forecasts.
a. Trend:
Liquidity: Liquidity ratios (including both quick ratios and liquid ratios) decreased sharply from
2020 to 2022, indicating a downward trend in quick liquidity. This may require attention to
financial resource and liquidity management in the future.
Asset Operations: Asset turnover ratio increased, showing efficiency in managing and using
assets to generate revenue. This trend could continue if the company maintains an effective
asset management strategy.
Profitability: The gross profit to revenue ratio increased significantly, suggesting a positive trend
in the company's performance and profitability. This could continue if Sun Life maintains its
strategy of increasing value and cost efficiency.
Debt: The debt/total assets ratio increases, especially from 2021 to 2022. This trend requires
special attention to financial risk management and future solvency.
b. Forecast:
Liquidity: It is anticipated that Sun Life may continue to face liquidity pressures, and the
company may need to adopt a strategy to improve liquidity quickly.
Asset Operations: If the upward trend in asset turnover ratio continues, Sun Life may maintain
or expand its asset management strategy to optimize profitability.
Profitability: It is expected that the company can continue to increase performance and
profitability, especially if it maintains its cost management strategy and product/service quality.
Debt: This requires special attention to debt and financial risk management. The company may
need to review its financial strategy to ensure solvency and financial stability.

4. Evaluation
Strength:
Sun Life owns many important and diverse intangible and tangible assets, expanding and
developing the company over the years => to build trust and confidence from customers and
partners.
Effective use of capital and financial leverage to create high profits.
High-interest coverage ratio
Weakness:
Management of long-term and short-term debt and risks is limited.
Difficulty in debt collection and payment of expenses.
Wrong investment predictions about stocks and bonds.
The management of financial resources in the face of market fluctuations is not good.
Reduced ability to pay quickly.
Opportunities for improvement:
Comparing profit/loss before and after tax, risk management and cost savings management can
be improved.
The ability to pay short-term and long-term debt, because over the years it has been shown that
the increase in debt amounts reflects the expansion and development of the company.
Improvements in ROE, ROA, Quick Ratio and Current Ratio
Cash flow from investment and financial activities can be improved.
Ability to manage assets and business operations to adapt to a changing business environment.
Remedies:
Identify and evaluate to reduce gaps in risk and cost management, then develop prevention and
response measures.
Always update the market situation
Adjust insurance premiums or apply new terms to suit and reduce risks and costs.
Adjust and invest effectively
Reserve initial liquidity by keeping a large amount of cash to deal with related risks
Reduce investment in short-term assets, increase short-term capital mobilization.
5. Conclusion
This article analyzes Sun Life's finances and studies its development strategy through the years
2020, 2021 and 2022. To analyze finances, this article analyzes Sun Life's financial situation
through its ability to profitability, operating capacity, liquidity and solvency, and concludes
compared to Benchmark and to companies in the same industry. Therefore, Sun Life needs to
come up with ways to resolve and improve stressful issues, change strategies, create innovation
and especially manage risks so that the company's situation changes in a positive direction.
more extreme.
6. References:

https://www.Sun Life.com.vn/content/dam/Sun Life/regional/vietnam/documents/bao-cao-

tai-chinh-da-kiem-toan-2020.pdf

https://Sun Life.com.vn/content/dam/Sun Life/regi9onal/vietnam/documents/bao-cao-tai-

chinh-da-kiem-toan-2021.pdf

https://www.Sun Life.com.vn/content/dam/Sun Life/regional/vietnam/documents/bao-cao-

tai-chinh-da-kiem-toan-2022.pdf