Analysis of financial situation at Military Petrochemical One Member Limited Liability Company

- Ability to pay

The company's current solvency is quite good, most of the solvency ratios are increasing and stable. In 2013, the general solvency was 2.96. The quick solvency was 1.38 with an increase rate compared to 2012 of 55.6%. With the rate

increased by 27.54% compared to 2012, current payment capacity reached 2.13, but the cash payment capacity ratio decreased rapidly because the amount of cash was decreasing quite rapidly from 0.53 to only 0.32 in the period 2011 - 2013.

- About equity

Maybe you are interested!

Owner's equity accounts for a high proportion of capital: owner's equity increased from 352,677 million VND to 438,152 million VND in the period 2011 - 2013. In 2013, the proportion accounted for 66.2% of total capital.

- About performance

The profitability ratios of Military Petrochemical Company Limited have all increased over the past 3 years, these ratios have increased due to the high growth rate of profits. In 2013, profit on revenue was 0.083 with an increase rate compared to 2012 of 62.75%. The ratio of EBIT to total assets was 0.156, an increase rate of more than 50%. With an increase rate of 58.9%, ROA was 0.116. ROE was 0.172 with an increase rate of 57.8%.

2.2.3.2. Disadvantages

Besides the advantages, the company also has disadvantages that need to be overcome:

- About short-term assets

In the company's asset structure, short-term assets are higher than long-term assets. The reason is that the company is focusing on investing in short-term assets and at the same time, inventory is increasing. At the same time, the company is not managing assets well. Specifically: the short-term asset turnover rate in 2012 was 3.02 times, by 2013 the turnover rate decreased to 0.4 times, only 2.62 times.

- About inventory

Inventory is quite high and increasing. In 2011, inventory was only over 80 billion VND, but by 2013, inventory had reached 137 billion VND, the growth rate in 2013 compared to 2012 was 16.66%. This leads to capital stagnation in the company. On the other hand, the products that the company trades in are gasoline, chemicals, etc., which are very easy to lose if stored in the warehouse for a long time.

- About debt recovery

The company's debt collection ability is still quite slow, the receivables turnover in 2012 was 16.36 times, decreasing to 14.4 times in 2013. That is, the collection period in 2012 was 22 days, increasing to 25 days in 2013.

- About business management costs

Business management costs are increasing, from 16,365 million VND in 2011 to 30,448 million VND in 2013.