Through the above analysis table, we can see that in the total assets of the company, short-term assets account for a smaller proportion than long-term assets. Specifically as follows: In 2016, short-term assets accounted for 36.1%, long-term assets accounted for 63.9% of total assets, in 2017, short-term assets accounted for 41.4%, long-term assets accounted for 58.6% of total assets, in 2018, short-term assets increased slightly to 41.7% and long-term assets accounted for 58.3% of total assets. Thus, short-term assets in 2018 increased compared to 2017 and 2016, but the growth rate was relatively slow and long-term assets, although decreased, still accounted for a large proportion of total assets. This is also reasonable for a transportation and commercial service company like the Company when in the past year the Company increased maintenance and repair activities of machinery, equipment, and old transport vehicles to improve the Company's operational capacity.
- In short-term assets, receivables account for a relatively large proportion. In 2016, receivables accounted for 21.3% of total assets, in 2017, they accounted for 25.3% of total assets, and in 2018, they decreased to 24.4% of total assets. Thus, we see that the proportion of receivables is not uniform over the years. In 2018, although receivables decreased in proportion, they still increased in absolute numbers between years, so the company also needs to find out the reasons to have a reasonable debt policy. In short-term receivables, receivables from customers account for the highest proportion and increase steadily over the years. Meanwhile, the company still sets up provisions for bad debts but they gradually decrease. Thus, the company will encounter less difficulties if customers occupy capital for too long.
- However, inventories increased in both proportion and absolute numbers, accounting for 4.9% in 2016, 5.7% in 2017 and 7.0% in 2018 of total assets, which shows that the company's raw materials and tools have not been used, proving that the company's inventory management and use are not effective.
- The company's cash capital accounts for a significant proportion of total assets and has decreased over time. In 2016, cash capital accounted for 7.7% of total assets, in 2017, cash capital accounted for 7.1% of total assets and by 2018, cash capital had decreased to 5.5%. This proves that the company has become more and more passive in production and business and cannot ensure its payment ability, but if cash capital accounts for a large amount and increases, the money may be stagnant because it is not put into business operations for the company. With the amount of money, the company basically ensures the needs of use and reserves.
for their payment operations and suitable for the characteristics of companies in the field of water transport.
The increase in the proportion of short-term assets in total assets has caused long-term assets, mainly fixed assets, to slightly decrease in the proportion of total assets. In 2016, long-term assets accounted for 63.9%, in 2017, long-term assets accounted for 58.6%, and in 2018, it decreased to 58.3%. However, the investment value of fixed assets still accounts for a large proportion of the company's total assets and is mainly means of transport, transportation and machinery and equipment systems serving the exploitation and collection of hard coal. Although the value has increased over the years, the proportion of long-term assets has decreased, which shows that the company did not purchase new fixed assets in the past year but only invested in maintenance and repair of old assets.
2.2.1.1.2. Analyze the capital situation through the balance sheet
Analyze horizontal fluctuations in capital scale.
Next, to specifically consider the analysis of the capital situation, we create a table:
Table 2.3. Horizontal analysis of capital size fluctuations
Unit: million VND
Target
2016 | 2017 | 2018 | Comparison 2017/2016 | Comparison 2018/2017 | |||
Amount | % | Amount | % | ||||
A. LIABILITIES | 24,526 | 30,005 | 30,260 | 5,479 | 22.3% | 255 | 0.9% |
I. Short-term debt | 11,918 | 18,459 | 17,304 | 6,541 | 54.9% | -1.155 | -6.3% |
1. Short-term loans and debts | 5,546 | 8,065 | 7.153 | 2,519 | 45.4% | -912 | -11.3% |
2. Payable to seller | 4,063 | 7,641 | 7,051 | 3,578 | 88.1% | -590 | -7.7% |
3. Buyer pays in advance | 948 | 837 | 1,006 | -111 | -11.8% | 170 | 20.3% |
4. Taxes and other payables to the State | 717 | 1,010 | 1,050 | 293 | 40.9% | 40 | 4.0% |
5. Must pay employees | 645 | 907 | 1,043 | 262 | 40.7% | 136 | 15.0% |
II. Long-term debt | 12,608 | 11,547 | 12,957 | -1.062 | -8.4% | 1,410 | 12.2% |
1. Long-term loans | 12,608 | 11,547 | 12,957 | -1.062 | -8.4% | 1,410 | 12.2% |
B. OWNER'S EQUITY | 13,652 | 13,984 | 14.141 | 332 | 2.4% | 157 | 1.1% |
I. Owner's capital | 13,560 | 13,899 | 14,002 | 340 | 2.5% | 103 | 0.7% |
II. Other funding sources | 92 | 84 | 139 | -8 | -8.2% | 55 | 64.9% |
TOTAL | 38,178 | 43,989 | 44,401 | 5.811 | 15.2% | 413 | 0.9% |
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Financial Analysis Through Balance Sheet
(Source: Finance - Accounting Department)
44
Through the above analysis table, we can see that the total capital of the Company in 2017 increased compared to 2016 by 5,811 million VND (an increase of 15.2%), in 2018 increased compared to 2017 by 413 million VND, corresponding to an increase of 0.9%, so the total capital of the Company has increased, the increase in capital is due to a number of reasons such as: increased liabilities, increased equity.
The company's liabilities in 2017 increased by VND 5,479 million compared to 2016 (an increase of 22.3%), and in 2018, it increased by VND 255 million compared to 2017, an absolute increase of 0.9%. The company's liabilities in 2018 increased mainly due to a decrease in short-term debt and an increase in long-term debt. The decrease in short-term debt was due to a decrease in payables to suppliers, which shows that in 2018, the company did not owe any money to suppliers. The decrease in short-term debt was also due to an increase in taxes and payables to the State, but this amount did not greatly affect the increase in short-term debt. The increase in the company's reasonable appropriation shows that the company took advantage of its reputation, thereby reducing interest expenses. The company's equity in 2017 increased by 332 million VND compared to 2016 (an increase of 2.4%), in 2018, it increased by 157 million VND compared to 2017 in absolute terms, corresponding to an increase of 1.1%. The increase in the company's equity was mainly due to the sharp increase in the company's undistributed profit after tax, which showed that the company's revenue in 2018 increased and increased faster than costs, and the company's service provision activities were also quite active. In addition, other funding sources and funds also increased rapidly, in 2018, it increased by 64.9% compared to 2017, the increase in funding sources and other funds was due to the increase in the reward and welfare fund. This proves that the company always cares about and improves the lives of its employees.
Vertical analysis of capital structure:
To better understand the capital structure, we analyze the capital structure vertically. We have the following analysis table:
45
Table 2.4. Vertical analysis of capital structure
Unit: million VND
Target
2016 | 2017 | 2018 | ||||
Value | Proportion | Value | Proportion | Value | Proportion | |
A. LIABILITIES | 24,526 | 64.2% | 30,005 | 68.2% | 30,260 | 68.2% |
I. Short-term debt | 11,918 | 31.2% | 18,459 | 42.0% | 17,304 | 39.0% |
1. Short-term loans and debts | 5,546 | 14.5% | 8,065 | 18.3% | 7.153 | 16.1% |
2. Payable to seller | 4,063 | 10.6% | 7,641 | 17.4% | 7,051 | 15.9% |
3. Buyer pays in advance | 948 | 2.5% | 837 | 1.9% | 1,006 | 2.3% |
4. Taxes and other payables to the State | 717 | 1.9% | 1,010 | 2.3% | 1,050 | 2.4% |
5. Must pay employees | 645 | 1.7% | 907 | 2.1% | 1,043 | 2.3% |
II. Long-term debt | 12,608 | 33.0% | 11,547 | 26.2% | 12,957 | 29.2% |
1. Long-term loans | 12,608 | 33.0% | 11,547 | 26.2% | 12,957 | 29.2% |
B. OWNER'S EQUITY | 13,652 | 35.8% | 13,984 | 31.8% | 14.141 | 31.8% |
I. Owner's capital | 13,560 | 35.5% | 13,899 | 31.6% | 14,002 | 31.5% |
II. Other funding sources | 92 | 0.2% | 84 | 0.2% | 139 | 0.3% |
TOTAL | 38,178 | 100% | 43,989 | 100% | 44,401 | 100% |
(Source: Finance - Accounting Department)
46
Through the above calculations, we see that in 2016, liabilities accounted for 64.2% and equity accounted for 35.8% of total capital. Liabilities and equity in 2017 and 2018 remained almost unchanged. In 2017 and 2018, liabilities accounted for 68.2% and equity accounted for 31.8% of total capital. This is a good sign for the company because it shows that the company's financial situation is always stable. The company has been more proactive in ensuring capital for the needs of production and business activities and the company's financial risks are also decreasing.
* Analysis of the couplet Assets and Capital
Table 2.5: Balance between assets and capital sources
Unit: million VND
Year
Short term TS | Long term TS | Short term capital | Long term capital | |||||
Value | % | Value | % | Value | % | Value | % | |
2016 | 13,792 | 36% | 24,835 | 64% | 11,918 | 31% | 26,260 | 69% |
2017 | 18,220 | 41% | 25,769 | 59% | 18,459 | 42% | 25,531 | 58% |
2018 | 18,530 | 42% | 25,872 | 58% | 17,304 | 39% | 27,098 | 61% |
(Source: Finance - Accounting Department)
Net working capital:
2016 operating expenses = 1,874 million VND > 0 2017 operating expenses = - 239 million VND < 0 2018 operating expenses = 1,226 million VND > 0
Working capital in 2016 and 2018 was positive, reaching a fairly high value of VND 1,874 million and VND 1,226 million. This shows that in 2016 and 2018, the Company used a part of long-term capital to finance short-term assets to maintain stability in the production and business process and ensure capital and liquidity safety. However, in 2017, the Company's net working capital was less than 0; with a value of - VND 239 million. This means that the Company is facing capital pressure because it has to finance long-term assets from short-term capital. This is the reason why liquidity pressure and capital risk in 2017 increased compared to 2016.
2.2.2. Current status of capital management of Quang Doanh company
2.2.2.1 Asset structure and capital sources of Quang Doanh company
Table 2.6: Analysis table of the Company's capital structure
Unit: million VND
Status
Target | 2016 | 2017 | 2018 | ||||
Value | Ratio weight | Value | Ratio weight | Value | Ratio weight | ||
A | CURRENT ASSETS | 13,792 | 36.1% | 18,220 | 41% | 18,529 | 42.1% |
I | Money | 2,943 | 7.7% | 3.134 | 7% | 2,424 | 5.5% |
II | TC NH Investments | 354 | 0.9% | 550 | 1% | 657 | 1.5% |
III | Bank receivables | 8,124 | 21.3% | 11,135 | 25% | 10,847 | 24.7% |
IV | Inventory | 1,857 | 4.9% | 2,505 | 6% | 3.103 | 7.1% |
V | Other current assets | 513 | 1.3% | 894 | 2% | 1,497 | 3.4% |
B | LONG-TERM ASSETS | 24,385 | 63.9% | 25,768 | 59% | 25,871 | 58.8% |
I | Fixed assets | 23,929 | 62.7% | 25,261 | 57% | 5.221 | 57.3% |
II | Other long-term assets | 456 | 1.2% | 507 | 1% | 650 | 1.5% |
Total assets | 38,177 | 100% | 43,988 | 100% | 44,401 | 100% | |
A | LIABILITIES PAYABLE | 24,525 | 64.2% | 30,005 | 68% | 30,260 | 68.8% |
I | Short-term debt | 11,917 | 31.2% | 18,458 | 42% | 17,303 | 39.3% |
II | Long-term debt | 12,608 | 33.0% | 11,546 | 26% | 12,956 | 29.5% |
B | EQUITY | 13,651 | 35.8% | 13,983 | 32% | 14.141 | 32.1% |
I | Owner's equity have | 13,559 | 35.5% | 13,899 | 32% | 14,001 | 31.8% |
II | Other funding sources | 91 | 0.2% | 84 | 0% | 139 | 0.3% |
Total capital | 38,177 | 100% | 43,988 | 100% | 44,401 | 100% | |
(Source: The Company's balance sheet for the years 2016 - 2017)
* About capital structure:
The company's capital is formed from two sources: Owner's equity and liabilities. A reasonable and effective capital structure must ensure a harmonious combination between liabilities and the company's equity, ensuring financial safety for the company, while maximizing the positive impact of financial leverage in business, creating high liquidity in the use of capital of the company.
From Table 2.4 we see that the scale of business capital in 2017 increased compared to 2016 by 6,811 million VND. Detailed analysis shows:
- In total business capital, owners' equity accounts for a lower proportion than liabilities and tends to fluctuate over the years. In 2016, owners' equity was 13,651 million VND. In 2017, owners' equity was 13,983 million VND, accounting for 32% of total business capital, an increase of 332 million VND compared to 2016. The reason is that in 2017, the company issued additional owners' equity, causing the owners' capital contribution to increase to 339 million VND, increasing the value of surplus capital, and at the same time, because in 2016, the company had good business operations and made a profit, so it added more capital from retained earnings. However, the proportion of owners' equity in 2017 was lower than in 2016. Because the increase in asset value was greater than the increase in owners' equity. This shows that in order to meet the needs of business development in 2016, the company mainly borrowed short-term and used capital to serve business, but by 2017, the company relied on short-term loans and lost financial autonomy. Short-term debt in 2016 was 11,917 million VND, by 2017 it was 18,458, an increase of 6,540 million VND compared to 2016. Meanwhile, long-term debt in 2017 decreased from 12,608 million VND to 11,546 million VND, a decrease of 1,061 million VND. The company's self-financing ratio is also very low, showing the company's financial instability, or in other words, the company is financially dependent.
In 2018, equity was 14,141 million VND, accounting for 32.1% of total operating capital, an increase of 157 million VND compared to 2017. The reason is that in 2018, the Company increased its equity. The Company's self-financing ratio in 2018 increased at a negligible level, showing financial safety.
- The company's liabilities are mainly short-term and long-term debts - temporary capital sources account for 31.2% to 42% of total capital (prepayments from buyers, payables to sellers, internal payments, payables to employees...), especially payables to sellers and short-term bank debts account for a large proportion; long-term debts account for a decreasing proportion over the years in total liabilities, accounting for only about 33% to 26% of total capital. The Company's capital mobilization policy is mainly to use short-term loans.