has not really been focused on. Foreign language skills, computer skills, and financial analysis ability of accounting staff are still limited. Therefore, the company should send employees to attend some additional courses to improve their professional qualifications to increase work efficiency and bring benefits to the company.
Third opinion: Balance Sheet analysis at Dong Do Maritime Joint Stock Company Branch in Hai Phong.
In order to grasp the financial situation and capacity of the Company, the Company should periodically analyze the Balance Sheet so that managers can make correct and appropriate decisions for management.
Balance Sheet analysis is a time-consuming and laborious task and requires the analyst to have a high level of expertise. The company can organize the Balance Sheet analysis every 3 months, every 6 months or every year depending on the needs of the administrator and the company. Only then can the company have a general and correct view of its capacity.
From there, the board of directors will have the basis to determine a new production and business strategy to achieve the best business efficiency.
The company needs to conduct the analysis in the following order for the analysis to be most effective:
Step 1: Staffing
For the analysis to be done well, the company should establish a specialized team of staff to undertake the analysis. This team can consist of 2 people: Chief Accountant and Sales Manager.
After organizing a team of specialized staff to undertake analysis, the company needs to strengthen training and improve the qualifications of the analysis staff by sending them to attend short-term training courses on financial analysis.
Step 2: Collect information
Collect documents for analysis such as: balance sheets of the two most recent years to the year of analysis, relevant financial reports, business plans, and other necessary information. These documents must be checked for authenticity and reasonableness before being used for analysis.
Step 3: Plan the analysis
- Determine the analysis objective: The company needs to clearly determine the analysis objective, which is to use the balance sheet to assess the general situation of capital use and capital sources of the enterprise, short-term payment ability, financial structure and financial risk level, and capital use efficiency of the enterprise.
- Building an analysis program: the more detailed and meticulous the analysis program is, the more effective the analysis organization will be. When building an analysis program, the Company needs to clarify the following issues:
+ Choose a system of analysis methods such as comparison method, ratio method. These methods can be combined for analysis, thus, the content of financial analysis through the company's financial statements will be more profound, and the company's finances will be more comprehensively assessed.
+ Determine analysis content: analysis content of the company's financial statements may include:
- Analysis of asset structure and capital sources.
- Analyze typical financial ratios.
+ Determine the time to perform the analysis program: Can be performed at the end of the fiscal year.
Step 4: Conduct analysis
- Conduct analysis: based on the analysis methods selected in the above step, conduct analysis according to the planned content.
- Summarize results and draw conclusions: after analysis, proceed to create summary evaluation tables, detailed evaluation tables...
Step 5: Report analysis results
The analysis results report is presented and explained to the company's board of directors and leaders of functional departments in the company to discuss and agree on opinions in that analysis report.
Perform content analysis:
I would like to present some analysis as follows:
Analysis of the structure of assets and capital sources
Asset structure analysis:To facilitate the analysis of asset structure, the following table can be created:
Table 3.1:
Hai Phong University of Economics Graduation Thesis
TABLE OF ANALYSIS OF ASSET FLUCTUATION AND STRUCTURE
Target
2011 | 2012 | 2012 vs 2011 | ||||
Amount (VND) | Proportion (%) | Amount (VND) | Proportion (%) | Amount (VND) | Rate (%) | |
A. SHORT-TERM ASSETS | 3,338,206,303 | 35.72 | 4,401,901,139 | 45.52 | 1,063,694,836 | 31.86 |
I. Cash and cash equivalents | 791,970,101 | 8.47 | 1,238,097,537 | 12.80 | 446,127,436 | 56.33 |
III. Bank receivables | 2,500,987,440 | 26.76 | 3,012,653,036 | 31.15 | 511,665,596 | 20.46 |
V. Other current assets | 45,257,762 | 0.48 | 151,150,566 | 1.56 | 105,892,804 | 233.98 |
B. LONG-TERM ASSETS | 6,008,148,328 | 64.28 | 5,269,203,475 | 54.48 | -738,944,853 | -12.30 |
II. Fixed assets | 5,621,582,355 | 60.15 | 5,139,794,885 | 53.15 | -481,787,470 | -8.57 |
V. Other long-term assets | 386,565,973 | 4.14 | 129,408,590 | 1.34 | -257,157,383 | -66.52 |
TOTAL ASSETS | 9,346,354,631 | 100.00 | 9,671,104,614 | 100.00 | 324,749,983 | 3.47 |
Maybe you are interested!
-
Completing the work of preparing and analyzing the Balance Sheet at Hai Long Shipbuilding and Repairing Company Limited - 12 -
Completing the work of preparing and analyzing the balance sheet at Van Long Company Limited - 14 -
Completing the work of preparing and analyzing the balance sheet at the Dong Do Maritime Joint Stock Company Branch in Hai Phong - 11 -
Completing the work of preparing and analyzing the balance sheet at Van Long Company Limited - 9 -
Completing the work of auditing cash capital in auditing financial statements performed by An Phat Auditing and Accounting Consulting Co., Ltd. - 13
Student: Le Thi Thu Hoai - Class QT1307K 78
Hai Phong University of Economics Graduation Thesis Through the above analysis table, we can see that: the company's total assets in 2012 were 9,671,104,614 VND, an increase of 324,749,983 VND, equivalent to an increase of 3.47% compared to 2011. That is because short-term assets increased from 3,338,206,303 VND, accounting for 35.72% of total assets in 2011, to 4,401,901,139 VND, accounting for 45.52% of total assets in 2012. Short-term assets with such a proportion in the structure is not good, but the fluctuation of short-term assets
term is good. Therefore, the company needs to adjust its asset structure to be more reasonable.
Cash and cash equivalents increased by VND 446,127,436, equivalent to an increase of 56.33%. The reason is that the company has not paid December salaries to employees in the last month of the year. This shows that the company's cash and cash equivalents are relatively stable.
Short-term receivables increased, specifically in 2012 compared to 2011, it increased by 511,665,596 VND, equivalent to an increase of 20.46%. This also shows that the company has not done a good job of collecting debts from customers, causing capital congestion in payment, affecting the efficiency of capital use. Therefore, in the coming time, the company needs to pay attention to managing the debt collection process on time, speeding up the capital circulation speed, avoiding capital occupation for a long time.
For long-term assets, the fixed assets index decreased by VND 481,787,470, corresponding to a decrease rate of 12.30%. The reason for this decrease is that the company has many assets with large values but short depreciation periods, so the large depreciation rate makes the remaining value of the assets in the following year less than the previous year.
Analysis of capital structure:
Analyzing the structure and fluctuations of capital sources helps managers grasp the situation of capital use and mobilization of their business. From there, they can make appropriate decisions to increase the company's financial self-financing capacity as well as the level, autonomy and initiative in business. To facilitate the assessment of capital structure, when conducting analysis, the following table can be created:
Table 3.2:
Student: Le Thi Thu Hoai - Class QT1307K 79
Hai Phong University of Economics Graduation Thesis
ANALYSIS TABLE OF CAPITAL STRUCTURE AND FLUCTUATION
Target
2011 | 2012 | 2012 vs 2011 | ||||
Amount (VND) | Proportion (%) | Amount (VND) | Proportion (%) | Amount (VND) | Rate (%) | |
A. LIABILITIES | 5,126,897,839 | 54.85 | 5,322,348,524 | 55.03 | 195,450,685 | 3.81 |
I. Short-term debt | 4,677,697,839 | 50.05 | 5,157,548,524 | 53.33 | 479,850,685 | 10.26 |
II. Long-term debt | 449,200,000 | 4.81 | 164,800,000 | 1.70 | -284,400,000 | -63.31 |
B. OWNER'S EQUITY | 4,219,456,792 | 45.15 | 4,348,756,090 | 44.97 | 129,299,298 | 3.06 |
I. Equity | 4,219,456,792 | 45.15 | 4,348,756,090 | 44.97 | 129,299,298 | 3.06 |
II. Other funding sources and funds | - | - | - | - | - | - |
TOTAL CAPITAL | 9,346,354,631 | 100.00 | 9,671,104,614 | 100.00 | 324,749,983 | 3.47 |
Student: Le Thi Thu Hoai - Class QT1307K 80
Through the analysis table of fluctuations and capital structure, we can evaluate the financial capacity of the company. Owner's equity in 2012 increased compared to 2011 by 324,749,983 VND, corresponding to an increase rate of 3.47%.
The liabilities at the beginning and end of the year always account for a large proportion of the total capital and the increasing amount of liabilities shows that the company is using a large amount of capital from outside to serve the production and business process. This shows that the company uses financial leverage in business well. However, that also makes the company's financial autonomy not strong.
In the total capital of the company, the debt payable at the end of the year compared to the beginning of 2012 increased by 195,450,685 VND, corresponding to an increase of 3.81%. In which: short-term debt increased by 479,850,685 VND, corresponding to an increase of 2.96% and long-term debt decreased by 284,400,000 VND, corresponding to a decrease of 63.31%. In terms of value, the above data shows that the company focuses on mobilizing short-term capital. In addition, the proportion of debt payable is always higher than the proportion of equity and tends to increase towards the end of the year, specifically increasing by 0.18%, demonstrating that the company's financial independence is low and decreasing.
Regarding Owner's Equity: during the year, the Owner's Equity index increased, proving that the company was profitable but only increased by a small percentage: 3.06%, equivalent to 129,299,298 VND, almost insignificant compared to the increase in Liabilities, this shows that the company's financial dependence is on the rise, the company will face difficulties in the future when short-term debts are due. Therefore, in the coming time, the company should pay attention to finding sources to pay short-term debts due.
To better understand the financial situation, solvency and profitability of a business, it is necessary to analyze the following indicators:
Solvency analysis:
The solvency of a business reflects the financial relationship between the amounts that can be paid during the period and the amounts that must be paid during the period and clearly shows the financial quality. At a certain point, if a business is unable to pay, it is the first sign of financial difficulties, and if more serious, it can lead to bankruptcy. Therefore, solvency is an important indicator in the analysis of corporate finance, it will reflect the risks in the production and business activities of the business. On that basis, it helps businesses find the causes and propose solutions to limit the level of risk of the business.
Table 3.3:
SOLVENCY ANALYSIS TABLE
Target
2011 | 2012 | 2012 vs. with 2011 | |
1. Total assets. | 9,346,354,631 | 9,671,104,614 | 324,749,983 |
2. Current assets. | 3,338,206,303 | 4.401.901.139 | 1,063,694,836 |
3. Inventory. | - | - | - |
4. Liabilities. | 5,126,897,839 | 5,322,348,524 | 195.450.685 |
5. Total short-term debt. | 4,677,697,839 | 5,157,548,524 | 479,850,685 |
6. Overall payment ratio (1)/(4). | 1.82 | 1.82 | - |
7. Current ratio term (2)/(5). | 0.71 | 0.85 | +0.14 |
8. Quick ratio (2-3)/(5) | 0.71 | 0.85 | +0.14 |