1.2.1.2. Business performance report
The business performance report is a summary report that shows the financial situation of the enterprise at certain points in time. It is the results of the entire enterprise's production and business activities, and the results of each type of business activity (production, business, financial investment, and unusual activities). In addition, the business performance report also shows the enterprise's performance of its obligations to the state during that business period.
Based on the data in the business performance report, information users can check, analyze and evaluate the business performance of the enterprise during the period, compare it with previous periods and with other enterprises in the same industry, to get an overview of the business performance during the period, and the trend, in order to make appropriate management and financial decisions.
* Role:
The income statement aims to summarize the revenue, expenses and business results of an enterprise for a certain period. Evaluate the operating efficiency and profitability of the enterprise.
The business performance report also reflects the performance of the enterprise's obligations to the state budget regarding taxes and other payments.
* Structure of the business performance report:
* Analyze financial situation through business performance report
The process of assessing the general financial situation through the business performance report of the enterprise can be done through analyzing the following 2 contents:
- Analyze the results of activities
Profits from business activities need to be analyzed and evaluated in general between revenue, costs and results of each type of activity. From there, comments can be made on the revenue situation of each type of activity corresponding to the costs incurred to determine the results of each type of activity.
in the total activities of the entire enterprise.
- Analysis of main business production results
Business performance results reflect the results of operations brought about by business functions, in each accounting period of the enterprise, and are the main basis for evaluating and analyzing the effectiveness of all aspects and fields of operations, analyzing the causes and the level of influence of the basic causes on the overall results of the enterprise. The correct and accurate analysis of business performance reports will be important data for calculating and checking the amount of revenue tax and income tax that the enterprise must pay and the inspection and assessment of the management agencies on the quality of the enterprise's operations.
The data on the business performance report is used to calculate indicators on profitability, the status of fulfilling obligations to the state regarding payables. Along with the data on the balance sheet, the data on the business performance report is used to calculate the efficiency of capital use, indicators on profit margins, etc.
When analyzing and using data from business performance reports for financial analysis, it is necessary to pay attention to a number of issues:
- There is a close relationship between revenue, costs and profits. When the growth rate of revenue is greater than the growth rate of costs, profits increase and vice versa.
- Sales discounts and sales returns increase, showing that the quality of the business's goods does not meet customer requirements.
When using sales figures to calculate a ratio, net sales should be used.
1.2.2. Sequence and steps to conduct corporate financial analysis.
Information collection: financial analysis uses all sources of information capable of explaining and explaining the financial performance of the enterprise, serving the financial forecasting process. It includes both internal and external information, accounting information and other management information, information on quantity and value.
value...in which accounting information is reflected in the financial statements of enterprises, are particularly important sources of information. Therefore, financial analysis is actually the analysis of financial statements of enterprises.
Information processing: the next stage of financial analysis is the process of processing the collected information. In this stage, information users from different research and application perspectives have different information processing methods to serve the set analysis goals: information processing is the process of arranging information according to certain goals to calculate, compare, explain, evaluate, and determine the causes of the results to serve the prediction and decision process. Prediction and decision: collecting and processing information to prepare the necessary premises and conditions for information users to predict needs and make financial decisions. It can be said that the goal of financial analysis is to make financial decisions. For business owners, financial analysis aims to make decisions related to the business's operational goals of growth, development, and profit maximization. For lenders and investors in businesses, they make decisions on financing and investment, for business superiors, they make decisions on business management... 1.3.Methods of analyzing business finance
Financial analysis methods include a system of tools and measures to approach and study events, phenomena, internal and external relationships, financial flows and changes, and comprehensive and detailed financial indicators to assess the financial situation of enterprises.
1.3.1.Comparison method
When applying the comparison method, the following factors should be noted:
First: comparison conditions.
- There must be at least 2 quantities (2 indicators)
- Quantities (indicators) must ensure comparability. That is, unity in economic content, unity in calculation methods, unity in time and measurement units.
Second: identify the base for comparison.
The comparative base period depends on the purpose of the analysis. Specifically:
- When determining the trend and growth rate of an analytical indicator, the comparison base is determined as the value of the analytical indicator in the previous period or a series of previous periods (previous year). At this time, the indicator will be compared between this period and the previous period, this year and the previous year or a series of previous periods.
- When evaluating the implementation of the set goals and tasks, the basis for comparison is the planned value of the analyzed indicator. Then, compare the actual with the plan of the indicator.
- When determining the position of a business, the basis of comparison is determined as the industry average value or the analysis index of competitors.
Third: comparison technique.
The commonly used comparison techniques are absolute comparison and relative comparison.
- Compare by absolute numbers to see the absolute number fluctuations of the analyzed indicators.
- Compare by relative numbers to see how much the actual index increases or decreases compared to the base period.
1.3.2.Ratio analysis method
Ratio is the most common financial analysis tool, a ratio is the proportional relationship between two lines or two groups of lines of the balance sheet. The ratio analysis method is based on the standard meaning of the ratios of financial quantities in financial relations. The transformation of ratios is the transformation of financial quantities. In principle, the ratio method requires determining thresholds and norms to comment on and evaluate the financial situation of the enterprise, based on comparing the enterprise's ratios with the values of reference ratios.
In corporate financial analysis, financial ratios are divided into specific groups of indicators reflecting basic contents according to the analysis objectives of the enterprise. In general, there are the following 4 groups:
- Group of indicators on payment ability
- Group of indicators on financial structure and investment situation
- Activity index group
- Profitability index group
Each group of ratios includes many separate ratios reflecting each part of financial activities in each different case. Depending on the analytical perspective, the analyst chooses different groups of indicators to serve his analysis goals.
Choosing the right ratios and analyzing them will certainly reveal the financial situation. Ratio analysis allows for a complete analysis of trends because some signs can be concluded through observing a large number of separate research phenomena.
1.3.2.1.Group of indicators on payment capacity
a. General payment ratio
Total assets | |
Overall liquidity ratio (h1) = | Total debt |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Procedures for Trial of Cases Involving Minor Defendants -
General Theoretical Basis of Corporate Finance and Corporate Financial Analysis. -
Theoretical Basis of Lending to Corporate Customers at Commercial Banks
General solvency ratio: indicates how many times a business can pay its liabilities with all its assets (this ratio must be greater than 1)
- If h1 > 1: it shows that the total value of the enterprise's assets is enough to pay the enterprise's current debts. However, not all existing assets are ready to be used to pay debts and not all debts must be paid immediately.
- If h1 < 1: signals the bankruptcy of the enterprise, the owner's equity is lost in its entirety, the total existing assets are not enough to pay the debt that the enterprise must pay.
b. Current ratio
- Current debt ratio (h2): shows how many times a business can pay its short-term debt with its short-term assets.
(Assets that can be converted into cash within 1 year or within 1 business production cycle)
Current assets |
Total current liabilities |
A current debt payment ratio greater than 1 shows that the enterprise has working capital (short-term assets > short-term debt), which means that the enterprise has used a part of long-term capital to finance short-term assets. Therefore, the financial situation of the enterprise is healthy, safe, and stable. On the contrary, if the ability to pay short-term debt is less than 1, it shows that the enterprise has no working capital. The financial situation of the enterprise is unstable and unsafe.
c.Quick payment ratio
Quick ratio: shows how many times a business can pay off its short-term debts with its cash and cash equivalents.
Quick ratio (h3)=Current Assets – Inventory |
Total current liabilities |
If h3=1, it means that the business is maintaining its ability to pay quickly. If h3<1, it means that the business is having difficulty paying its debts.
If h3>1, it means that the business is suffering from capital stagnation, slow capital turnover, reducing capital usage efficiency.
d.Interest coverage ratio
Interest payable is a fixed cost, the source of interest payment is net profit before tax. Comparing the source of interest payment with the interest payable will tell us how much the business is willing to pay interest.
Interest coverage ratio (h5)=Profit before tax |
Interest payable |
This ratio is used to measure the level of profit obtained by using capital to ensure interest payments to creditors. In other words, the interest coverage ratio tells us how well the borrowed capital has been used and how much profit it has made.
How much profit is left, is it enough to cover the interest payable?
1.3.2.2.Group of indicators on financial structure and investment situation
These ratios reflect the level of financial stability and autonomy as well as the ability to use debt of the enterprise. They are used to measure the capital contribution of the enterprise's owners compared to the financing of the enterprise by creditors. The origin and composition of these two types of capital determine the long-term solvency of the enterprise to a remarkable extent.
a. Debt ratio (hv)
The debt ratio reflects how much borrowed capital is in each unit of capital the enterprise is using.
Debt ratio (hv) =Liabilities |
Total capital |
The higher the debt ratio, the less financial independence of the enterprise, the enterprise is bound and pressured by debt. However, the enterprise benefits because it can use a large amount of assets while only investing a small amount.
b.Self-funding ratio
The self-financing ratio or equity ratio is a financial indicator that measures the contribution of equity in the total current fixed assets of the enterprise.
Self-funding ratio =Equity capital | x 100% |
Total capital |
The higher the self-financing ratio, the more the enterprise has its own capital, is highly independent from creditors, and therefore is not bound or pressured by debt.
c. Short-term asset investment rate
Investment ratio is the ratio of short-term assets to total assets of the enterprise.
Investment Rate =Total current assets | x 100% |
Total assets |
The larger this ratio, the more it shows the importance of the asset.
short-term assets in the total assets of the enterprise, reflecting the situation of technical facilities, production capacity and long-term development trends as well as the enterprise's competitiveness in the market.
However, to conclude whether this ratio is good or bad depends on the business sector of each enterprise in a specific period.
d. Long-term asset self-financing ratio
The long-term asset self-financing ratio shows how much of a company's long-term assets are financed by equity, reflecting the relationship between equity and the value of long-term assets.
Long-term asset self-financing ratio =Equity | x 100% |
Long-term assets |
If this ratio is greater than 1, it shows that the enterprise can use its own equity to equip long-term assets for its enterprise.
If the long-term asset self-financing ratio is less than 1, it means that a part of the enterprise's long-term assets are financed by borrowed capital, especially risky short-term loans.
1.3.2.3.Group of performance indicators
When giving capital to others to use, investors, business owners, lenders... often wonder: how effectively are their assets used? Activity indicators will answer this question. This is a group of indicators that characterize the use of resources and assets of the enterprise. These indicators are used to evaluate the impact on the efficiency of capital use of the enterprise. The capital of the enterprise is used to invest in fixed assets and current assets. Therefore, analysts are not only interested in measuring the efficiency of total capital use but also pay attention to the efficiency of each component of the enterprise's capital.
a. Average collection period.
In the process of operation, the arising of receivables and payables is inevitable. The larger the receivables, the more the capital of the enterprise is occupied (stuck in the payment stage). Quickly releasing the capital stuck in the payment stage is a part of the