Financial analysis at Dan Viet Steel Company

Expected results

According to market research, based on the experience of previous businesses when implementing the above activities, considering the actual results the company has achieved in recent years, it is expected that the company's revenue after implementing this measure will increase by 15%, that is, it will reach 261,297,937,298 VND (2017).

The expected expenses will account for the following proportions: cost of goods sold increases by 15%:

213,968,914,512 x 115% = 246,064,251,689 VND

Selling expenses increased by 20%:

989,402,800 x 120% = 1,187,283,360 VND

Business management costs increased by 15%: 201,381,680 x 115% = 3,461,363,863 VND

Market research and marketing costs 150,000,000 VND other costs 50,000,000 VND

Total cost:

246,064,251,689 +1,187,283,360 +3,461,363,863 +150,000,000

+50,000,000 =250,912,898,912 VND

After deducting expenses, the increase in pre-tax profit causes the company's after-tax profit to increase, as shown in the following table:

Table 26: Table of expected results after implementing measures to promote revenue growth

Target

Unit	Before taking action	After taking the measure	Difference
Unit	Before taking action	After taking the measure	Value	%
1 Net revenue	Copper	227.215.597.650	261.297.937.298	34,082,339,648	15
2 Cost of goods sold	Copper	213,968,914,512	246.064.251.689	32,095,337,177	15
3 Profit after tax	Copper	4,499,713,888	10,385,038,386	5,885,324,498	130.8
4 Profit after tax	Copper	3,239,794,000	7,477,227,638	4,237,433,638	130.8
5 Working capital BQ	Copper	77,563,563,282	83,923,775,471	6,360,212,189	8.2
6 Fixed capital BQ	Copper	33,700,977,825	35,544,421,312	1,843,443,487	5.47
7Total capital turnover	Ring	2.04	2.19	0.15
8 VLD rotations	Ring	2.93	3.11	0.18
9 Rounds of VCĐ	Ring	6.74	7.35	0.61

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The total cost of implementing the measure, including cost of goods sold, selling costs, business management costs, marketing costs and other costs, is estimated at VND 250,912,898,912.

After implementing this revenue promotion measure, the company's revenue will reach 261,297,937,298 VND. After deducting necessary expenses, the company's pre-tax profit will reach 10,385,038,386 VND. After-tax profit will reach 7,477,227,638 VND, an increase of 130.8% compared to before implementing the revenue promotion measure.

Thus, after the company's revenue was expected to increase by 15% compared to before implementation, the cost of goods sold factor also changed, the selling expenses and business management expenses both increased, other income and other expenses remained the same, the result was that pre-tax profit increased by VND 5,885,324,498, making after-tax profit also increase by VND 4,237,433,638, equivalent to 130.8%. Working capital turnover and fixed capital turnover both increased, working capital turnover increased by 0.18 times, fixed capital turnover increased by 0.61 times, total capital turnover also increased by 0.15 times.

By increasing revenue by attracting more customers and expanding the market, the company can improve capital efficiency, contribute to increasing profits, and expand production and business scale.

3.2.3. Perfecting the financial reporting system.

In fact, Dan Viet Steel Trading Co., Ltd., as well as other enterprises, do not have a complete financial reporting system. The company's current financial reporting system only includes: balance sheet, business performance report, and financial explanatory report. Although the company has done a good job of analyzing financial reports, to complete the financial reporting system, the company needs to add a cash flow report. Therefore, it is necessary to include a cash flow report in the company's reporting system. Because the cash flow report is a comprehensive financial report, reflecting the process of forming and using the amount of money generated during the reporting period of the enterprise. Information about the enterprise's cash flow helps users of financial statements have a basis to evaluate the ability to generate cash and use that cash in the enterprise's production and business activities.

 The main effects of cash flow statements are:

- Provide information to assess the ability to generate cash, cash equivalents and the business's needs in using cash.

- Provide information to users of the analysis report to evaluate the timing and certainty of generating cash in the business.

- Provide information on cash sources generated from business and financial investment activities to assess the impact of those activities on the financial situation of the enterprise.

- Provide information to assess the solvency and determine the business's cash needs in the next operating period.

General comments:

Above are some measures to contribute to improving the efficiency of capital use of Dan Viet Steel Trading Company Limited. Based on the comments, assessments and theoretical basis when proposing the measures, we see that they are all feasible. After implementing these measures, the efficiency of capital use of the company will increase.

3.3. Some recommendations to facilitate the implementation of measures in a convenient and effective manner

3.3.1. For the state:

There are policies and incentives to encourage production and business activities, contributing to improving production and business efficiency.

The State should consider state-owned enterprises on the way to equitization such as policies on capital, taxes, etc.

Recommend to the government and relevant departments such as transportation, import-export market management, and tax to strengthen inspection and supervision of other businesses to create a healthy playing field. Establish a specific, clear, and strict legal mechanism.

3.3.2. For businesses

Strengthen management training, improve workers' qualifications, and better meet today's innovative needs.

Implement policies that link rights and responsibilities to each individual department, with transparent and appropriate reward and punishment policies.

Review and rearrange the appropriate labor structure, right people, right jobs. Resolutely and strictly handle officers and employees who lack awareness and expertise.

Improve the capacity and practical level of management, production and technical staff, directly impact the thinking and working style of the production team, ensure efficiency and savings, and meet the requirements of managers.

Implement customer policies well, attract large customers, and retain new customers. Conduct financial analysis more deeply and regularly through a number of indicators appropriate to the analysis purpose. The company's financial analysis should be assigned to competent, qualified and professional staff to evaluate and make the most accurate comments on the company's financial situation and recommendations to help managers make recommendations related to production and business activities.

CONCLUDE

Finance is a very important field in the production and business activities of each enterprise. Financial analysis helps business owners have a deeper insight into the financial situation of their enterprise. Thereby, they can see the strengths, weaknesses, or untapped potential, thereby making the right financial decisions to bring profits to the enterprise, improving the competitiveness of the enterprise in the market.

Based on the importance of financial analysis in enterprises, with the knowledge that has been equipped along with the practical activities of Dan Viet Steel Trading Company Limited, I have completed my graduation thesis with the topic "Analysis of the financial situation at Dan Viet Steel Company".

Due to the short time of studying and learning about the reality at the company and my limited knowledge, my thesis is inevitably flawed and lacking. I look forward to the comments and criticisms of teachers, uncles and aunts in Dan Viet Steel Trading Co., Ltd. and of you so that my thesis can be more complete.

Finally, I would like to sincerely thank the help of the company's management board, the finance and accounting department of Dan Viet Steel Trading Limited Company and the dedicated and close guidance of teacher Pham Thi Nga and other teachers who created conditions to help me complete this thesis.

Thank you very much!

Hai Phong, October 26, 2017

REFERENCES

1. Financial report of Dan Viet Steel Trading Company Limited 2014-2016

2. Nguyen Tan Binh, Business performance analysis, Statistical Publishing House 2005

3. Ngo The Chi, Nguyen Trong Co, Textbook of Corporate Financial Analysis, Academy of Finance

4. Ngo Ngoc Mai, Corporate Finance Management, Finance Student

5. Le Thi Xuan, Analysis and use of financial statements , Banking Academy 2010

No. 108B Chua Hang, Ho Nam Ward, Le Chan District, Hai Phong City

DAN VIET TRADING COMPANY LIMITED

FINANCIAL REPORT

For the fiscal year ended December 31, 2016

BALANCE SHEET

As of December 31, 2016

Unit: VND

ASSET

Code	Explanation	Year-end number	Beginning of year number
A. Current assets 1) Cash and cash equivalents 2) Short-term financial investments 3) Short-term receivables 4) Inventory 5) Other current assets B. Long-term assets 1) Long-term receivables 2) Fixed assets 3) Investment real estate 4) Long-term financial investments	100 110 120 130 140 150 200 210 220 240 250	V.01 V.02 V.03 V.04 V.05	110,198,491,178 3,719,455,730 - 19,100,260,271 80,357,375,594 7,021,399,583 32,607,614,499 - 32,607,614,499 - -
TOTAL ASSETS			142,806,105,677	79,722,976,536
CAPITAL SOURCE
A. Liabilities I) Short-term debt 1) Short-term loans and financial leases 2) Short-term payables to suppliers	300 310		96,298,437,465 90,935,325,788 87,321,435,159 3,375,042,629	37,608,202,828 25,379,647,872 24,523,000,000