33 “ FINANCIAL SITUATION AT HANOI CONSTRUCTION ASSOCIATION ONE MEMBER LIMITED COMPANY

MINISTRY OF FINANCE
ACADEMY OF FINANCE
*

BUI LINH TRANG
CQ55/11.02

GRADUATION THESIS
TOPIC:
“ FINANCIAL SITUATION AT HANOI CONSTRUCTION
ASSOCIATION ONE MEMBER LIMITED COMPANY”

Major

: Corporate Finance

Student ID : 17523402010820
Supervisor

: PhD. Ngo Thi Kim Hoa


Ha Noi - 2021


DECLARATION
I hereby declare that this thesis is my own work and effort. It has not been
submitted anywhere for an award. Where other sources of information have been
used, they have been acknowledged.
Graduation thesis author

Bui Linh Trang

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ACKNOWLEDGEMENT
I would like to take this opportunity to express my deepest gratitude and
appreciation to the people who have given me their assistance throughout my
studies during the preparation of this thesis. They are my teachers, my colleagues,
my family and my friends. I would like to express my great thanks to all of them.
First of all, I would especially like to thank my advisor, PhD. Ngo Thi Kim
Hoa , for her continuous encouragement and especially for her academic and
creative guidance. She has been my source for inspiration throughout my thesis.
Without her support, I would not be able to complete my thesis. And I really
appreciate her patience in reading and correcting my thesis.
Secondly, I am indebted to all my teachers at Academy of Finance for their
guidance and help with valuable lessons throughout four years of study.
Moreover, I would like to thank especially chief accountant, and the staffs of
Hanoi Construction Association One Member Limited Company, for their valuable
supports during the internship period. Without their helps, it would be impossible
for me to finish this work.
Last but not least, many thanks to my family, friends and classmates for their
great love and care in both spirit and health during preparation for the
undergraduate thesis.

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ABSTRACT
This study investigated the factual state of financial efficiency at Hanoi

Construction Association One Member Limited Company from the viewpoint of a
fourth year student of Faculty of Corporate Finance, Academy of Finance. The
paper aims at finding out the drawbacks in the company’s financial and the reasons,
and more importantly suggesting main methods to improve the efficiency of
financial in the company. In achieving these aims, the graduation paper surveys the
current situation of financial and assess that whether it is effective or not. From
received results, the study argues the most practical implications at Hanoi
Construction Association One Member Limited Company to improve the efficiency
of financial of the company in the year to come.

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TABE

DECLARATION.................................................................................................
ACKNOWLEDGEMENT...................................................................................
ABSTRACT.........................................................................................................
LIST OF ABBREVIATIONS.............................................................................
CHAPTER I......................................................................................................2
OVERVIEW OF FINANCIAL SITUATION OF A COMPANY....................2
1.1. Corporate finance and corporate financial management........................2
1.1.1. Corporate finance and corporate finance decisions..........................2
1.1.2 Corporate financial management.......................................................4
1.2. The financial situation of a company.......................................................8
1.2.1. Definition of financial situation of a company.................................8
1.2.2 Indicators for assessing financial situation of a company.............14
1.3. Determinants of financial situation of a company............................35
1.3.1. Subjective factors affecting corporate financial management........35
1.3.2. Objective factors affecting corporate financial management..........36

CHAPTER II:.................................................................................................37
THE

FINANCIAL

SITUATION

OF

HANOI

CONSTRUCTION

ASSOCIATION ONE MEMBER LIMITED LIABILITY COMPANY.......37
2.1 Overview of HaNoi Construction Association One Member Limited
Liability Company....................................................................................37
2.1.1 The establishment and development of HaNoi Construction
Association One Member Limited Liability Company.............................37
2.1.2 The business characteristics of the company...................................38
2.1.3. Overview of financial performance of a one-member limited
liability company of Hanoi Construction Association..............................45

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2.2. The financial situation of Hanoi Construction Association One
Member Limited Company.......................................................................46
2.2.1. The company’s of assets and Assets structure...............................46
2.2.2 The company’s of Capital and structure Capital...........................52
2.2.3 The company’s Revenues, Expenses and Income............................62

2.2.4 The company’s cash flow situation of the business.........................67
2.2.5 The company’s debt and Liquidity of the compay:..........................72
2.2.6 The company’s asset utilization efficiency and Profitablity............79
2.2.7 The company’s profit distribution....................................................87
2.3. General assessment of the financial status of Hanoi Construction
Association One Member Limited Liability Company...........................88
2.3.1. These achievements.........................................................................88
2.3.2. Limitations exist..............................................................................89
CHAPTER 3:..................................................................................................90
SOLUTIONS TO IMPROVE FINANCIAL SITUATION OF HANOI
CONSTRUCTION

ASSOCIATION

ONE

MEMBER

LIMITED

LIABILITY COMPANY.................................................................................90
3.1. The strategies of Hanoi Construction Association One Member
Limited Liability Company in the future.................................................90
3.1.1. Socio-economic context..................................................................90
3.1.2. The strategies of Hanoi Construction Association One Member
Limited Liability Company of in the future..............................................96
3.2. Solutions to improve financial situation of Hanoi Construction
Association One Member Limited Liability Company...........................99
3.2.1. Strengthen debt management, improve the efficiency of commercial
credit policy...............................................................................................99

3.2.2. Strengthen in inventory management............................................113

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3.2.3. Strictly manage and improve the efficiency of capital in money. 103
3.2.4. Promote bidding activities, increase revenue and manage
production and business costs in an economical and effective way.......105
3.2.5. Improve operational efficiency, exploitation and use of capital. . .109
3.2.6. Improve business performance......................................................111
3.2.7. Other solutions...............................................................................111
3.3. Conditions needed for implementing the solutions........................114
3.3.1. On the business side......................................................................114
3.3.2. On the State side............................................................................114
CONCLUDE.................................................................................................116
LIST OF REFERENCES....................................................................................

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LIST OF ABBREVIATIONS
BEP

Basic Earnings Power

CA

Current Assets

CL

Current Liabilities

EBIT
EBT
ROA
ROE
NI

Earnings Before Interest and Tax
Earnings Before and Tax
Return on Assets
Return on Equity
Net income

NWC

Net working capital

ROS

Return on Sales

VND

Viet Nam dong

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Bảng

Table 2.1: Indicators reflecting the business performance of HaNoi
Construction Association One Member Limited Liability Company in the
last 2 years......................................................................................................45
Table 2.2: Analysis of the size and structure of assets in 2020.....................47
Table 2.3: Analysis of structure capital in 2020............................................53
Table 2.4: Analysis of capital size and structure in 2020..............................54
Table 2.5 Analysis of the funding model........................................................61
Table 2.6: Analysis of business performance and results in 2020................63
Table 2.7: Analysis of Business operation of the company in 2019-2020...65
Table 2.8 Ratio of money generation of the enterprise.................................67
Table 2.9 Size of company liabilities..............................................................72
Table 2.10: Liquidity and Solvency analysis in 2020....................................77
Table 2.11: Performance analysis in 2020.....................................................79
Table 2.12: Analysis of profitability of companies in 2020...........................83
Table 3.1: The main targets of the plan for the year 2021...............................98

Biểu

Figure 2.1: Overview of the company's financial situation in the period of
2018 - 2020.....................................................................................................46
Figure 2.2: Changes in the size and structure of assets in the period of 2019
- 2020..............................................................................................................48
Figure 2.3: Changes in the size and structure of capital resources in the period
of 2019 - 2020.................................................................................................56

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PREFACE
1. Research background
Currently, the deep changes of the world economy as well as the domestic
economy have posed many difficulties and challenges for businesses, making the
competition among economic sectors more and more. should be harsh. Besides,
globalization has become an inevitable trend of the world economy, Vietnam is not
out of that inevitable trend. Globalization has opened up new opportunities for
businesses and organizations, but it means that businesses are facing many new
challenges with increasingly fierce competition from the market economy. .
Enterprises not only compete with enterprises in the same industry and field but
also have to compete with many competitors with strong financial potential both at
home and abroad.
In this situation, the urgent requirement for managers is how to build and
maintain a competitive advantage, thereby helping their businesses survive and
develop sustainably. This has forced businesses not only to rise up in the process of
production and business but also to know how to maximize their potential to
achieve the highest business efficiency. From these practical requirements,
enterprises need to understand the results of their business activities and their
financial status in each period in order to make appropriate decisions to minimize
risks in activities, especially especially in financial management as well as
orientation for the development of the entire enterprise in the future. To do so, the
financial managers must evaluate and analyze the business activities as well as the
financial activities of the enterprises on a regular basis in detail and efficiency.
Recognizing the importance of analyzing the financial situation and assessing
the financial status of a business, I have researched, researched and selected to
implement the topic: “ Financial stituation of Hanoi Construction Association One
Member Limited Company ”
2. Research question and purpose

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The research project of financial situation and solutions to improve the
financial situation implemented at Hanoi Construction Association One Member
Limited Company has the following purposes:
- Proposing a number of major solutions to contribute to improving the
financial situation in the future
At the same time, set out a number of tasks:
- Systematize the theoretical issues of corporate finance and analyze the
corporate financial situation
- Find out the current financial situation of the company in 2020 on the basis
of comparison with 2019
- From the assessment of the current situation of the business to propose a
number of major solutions to contribute to improving the financial situation in the
future.
- Research subjects: Financial situation of Hanoi Construction Association
One Member Limited Liability Company.
3. Scope of study
- Research subjects: Financial situation of Hanoi Construction Association
One Member Limited Liability Company.
- Research on the financial situation of Hanoi Construction Association One
Member Limited Liability Company in the period 2019-2020
- Figures are taken from accounting book, financial statements in 2019,2020
4. Methodology and Data
4.1. The method of data collection
Through collecting an overview of the internship unit from relevant
departments, the intern's financial statements over the years 2019

and 2020;

current legal documents related to research issues; publications, books and
newspapers inside and outside the Academy ...
4.2 Methods of data analysis

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From the collected data, to have the appropriate information to complete the
final thesis, the methods used are:
Evaluation

methods: including techniques: comparison, division, correlation

relationship, ranking, graph, ...
Factor

analysis method: includes methods: continuous replacement, number

difference, balance, analysis of the nature of the factors
Prediction

method: is the corporate financial analysis method used to

forecast corporate finance, including the following main methods: probability
calculation method, sensitivity analysis, regression, linear planning, using model
econometric.
5. Literature review
Regarding analyzing the financial situation of enterprises, there are many
research topics, including topics such as:
- Thesis “The financial situation of Kinh Do Joint Stock Company" by Vu

Thi Bich Ha- Hanoi National University in 2012. In which, the author has analyzed
the current financial situation at Kinh Do Joint Stock Company by general analysis
and analysis of groups of financial ratios. In the thesis, the group of market value
coefficients and the Z-score model are used in the analysis.
- Thesis "The financial situation at Vinaconex Joint Stock Company" in 2013
by Bui Van Lam. Based on many analytical methods such as comparison, detail
that determines the impact of the coefficients on the company's finances. Since
then, it has proposed to propose the award to contribute to perfecting the analysis
of the financial situation to serve the needs of financial management, production
and business to meet the requirements of the market.
- Thesis "Financial situation at Construction and Infrastructure Development
Joint Stock Company No. 18" in 2015 by Hoang Duc Anh - Academy of Finance.
The main structure of the thesis is analysis of the current situation. on the financial
situation and analyzing financial indicators to propose solutions to improve the

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efficiency of capital use, the efficiency of financial management of the Company,
thereby knowing strengths and weaknesses. and solutions to overcome.
- Thesis "Financial situation at Vinaconex 25 Joint Stock Company", 2016 by
author Bui Van Lam - University of Da Nang. The thesis contributes to
systematizing theories about analyzing the financial situation. At the same time,
from assessing the current situation of analyzing the financial situation to create a
company, the sis has come up with a solution to complete the financial analysis of
Vinaconex 25 Joint Stock Company.
- Thesis "The financial situation at Binh Minh Import - Export Investment
Joint Stock Company" by Chu Hong Anh - Academy of Finance. The thesis
presents basic theoretical basis, analyzes the current situation and recommends
solutions to improve the financial performance of the company.

Through analyzing theses on the financial situation of the enterprises
mentioned above, the author has a deeper insight into the process of analyzing the
financial situation of an enterprise. Understand the method of analyzing the
financial situation. However, in the studies on this topic, there is no research on the
financial situation of the one member limited liability company of Hanoi
Construction Association. Therefore, the thesis has focused on researching the
financial situation of the company to offer solutions to improve financial efficiency
in this business.
6. Thesis structure:
Chapter 1: Overview of financial situation of a company
Chapter 2: The financial situation of Hanoi Construction Association One
Member Limited Liability Company.
Chapter 3: Solutions to improve the financial situation of Hanoi Construction
Association One Member Limited Liability Company.
Due to the limited knowledge as well as pratical experience, the limitations
and shortcomings in my article cannot be ignored. I look forward to receiving the
suggestions from the company and the teachers in the Corporate Finance subject to
make my final thesis more complete.

4


Hanoi, May 2021
The author of thesis
Bui Linh Trang

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1

CHAPTER I

OVERVIEW OF FINANCIAL SITUATION OF A COMPANY
1.1. Corporate finance and corporate financial management
1.1.1. Corporate finance and corporate finance decisions
1.1.1.1. Definition of corporate finance
The textbook of Corporate Finance of the Academy of Finance published in
2015 states that:
In essence, corporate finance is the economic relationship in the form of
value arising associated with the creation and use of monetary funds of an
enterprise during the operation of the business.
In terms of form, corporate finance are monetary funds in the process of
creating, distributing, using and mobilizing associated with enterprise operations.
Thus, it can be understood, the superficial manifestation of corporate finance
is the cash flows arising in the process of creating and using monetary funds
associated with the enterprise's operations. However, the internal content of those
cash flows is economic relations in the form of value between enterprises and
entities in the distribution of financial resources.
1.1.1.2 Financial decisions of the company
Although not completely unified in the concept of corporate finance in terms
of language; However, there is a consensus when different conceptions about
corporate finance are that: corporate finance is actually interested in studying three
main decisions, which are investment decisions, capital decisions and decide to
distribute profits.
+ Investment decision: are decisions related to the total value of assets and
the value of each part of assets (fixed assets and liquid assets). The investment
decision affects the left side (the assets part of the balance sheet). Major
investment decisions of a company include:

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- Decisions on investment in liquid assets: decisions on inventory, decisions
on inventory, decisions on sales policies, decisions on short-term financial
investments
- Decision on investment in fixed assets: decision to purchase fixed assets,
decide on project investment, decide on long-term financial investment ...
- Deciding on the structural relationship between investment in liquid assets
and investment in fixed assets: Deciding to use leverage and deciding break-even
point.
Investment decision is considered the most important decision in corporate
finance because it creates value for the business. A correct investment decision will
contribute to increasing the value of the business, thereby increasing the value of
assets for the owner, otherwise a wrong investment decision will damage the value
of the business, leading to damage. property for business owners.
+ Financing decision : are decisions related to choosing which source of
capital to provide for investment decisions. Capital decisions affect the right side
of the balance sheet (capital portion). Major capital raising decisions of businesses
include:
- Decision to mobilize short-term capital: decision to borrow short-term or
use commercial credit.
- Long-term capital mobilization decision: Decision to use long-term debt
through long-term bank loans or corporate bonds; decision to issue share capital
(common shares or preferred shares); decide the structural relationship between
debt and equity (financial leverage); decide to borrow to buy or rent property, ...
To make the right financing decisions, financial managers must have a firm
grasp of the advantages and disadvantages of using capital mobilization tools;
accurately assess the current situation and properly forecast market movements future prices ... before making a decision to raise capital.
+ Dividend dicision: Attached to decisions about the dividend distribution or

dividend policy of the business. Financial managers will have to choose between
using the majority of their after-tax profits for dividends or withholding for
reinvestment. These decisions relate to how a firm should pursue a dividend policy

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and whether the dividend policy affects the firm's value or the company's stock
price on the stock market. or not.
1.1.2 Corporate financial management
1.1.2.1 Definition of financial mangement
Corporate financial management is the selection and making of financial
decisions, the organization implementing those decisions to achieve the financial
performance of the business, which is to maximize profits, continuously. increase
the enterprise value and the competitiveness of the business in the market.
1.1.2.2. The role of corporate financial management
The role of financial governance in business operations is reflected through
the following main aspects:
a) Raising capital to ensure the normal and continuous operation of the
business:
Monetary capital is the money for the operations of the business. During the
operation of the business, there are often short-term and long-term capital
requirements for regular business activities, as well as for investment and
development of enterprises. Failure to promptly and adequately mobilize capital
will make business operations difficult or impossible. Therefore, ensuring business
activities are carried out normally and continuously depends greatly on the
organization of capital mobilization of corporate finance.
The enterprise's financial manager on the basis of considering the financial
market situation, capital needs and specific conditions of the business, then makes
the best decision in organizing the mobilization of capital sources (inside, outside)

to meet the needs of business activities. A proper sponsorship policy not only helps
businesses minimize financial risks but also has a great impact on the achievement
of the goal of maximizing business value.
b) Organizing the use of capital economically and effectively, contributing to
improving the efficiency of business operations of enterprises

3


With the selection of optimal investment projects on the basis of
consideration and comparison between the rate of return, the cost of capital
mobilization and the level of risk of investment projects ... financial managers have
created a premise for the use of capital economically and effectively.
The timely and sufficient capital mobilization will help businesses take
advantage of business opportunities, increase revenue and business profits.
Choosing the right form and method of capital mobilization, ensuring the optimal
capital structure can help businesses reduce the cost of capital, contribute to
increasing profits and return on equity of enterprise.
On the other hand, with the maximum mobilization of existing capital in
business activities can help businesses avoid losses due to capital stagnation,
increase asset turnover, reduce the amount of loans, thereby reducing interest
payments. loans, contributing to increase the profit after tax of the business.
c) Comprehensively inspect and supervise all aspects of production and
business activities of the enterprise
The business operation process of an enterprise is also the process of
mobilizing and transforming monetary capital form. Therefore, by examining the
daily monetary revenues and expenditures, and especially through analyzing and
evaluating the financial position of the business and the implementation of
financial indicators, financial managers. can control in time and comprehensively
all aspects of business activities, thereby pointing out shortcomings, untapped

potentials to make appropriate decisions, adjusting activities to achieve title out of
the business.
1.1.2.3 The contents of financial management in a company
Corporate financial management often includes the following main contents:
Participate in evaluation, selection, investment projects and business plans.
The construction and selection of investment projects are done jointly by many
parts of the business. From a financial perspective, the main thing to consider is
the main financial efficiency that is to consider and weigh the costs, the risks that

4


can be encountered and the possibility of profitability, ability to carry out the
project. In the selection analysis, evaluation of optimal projects, projects with high
profitability, the financial manager is the one who considers how to use investment
capital; on the basis of participating in the evaluation and selection of investment
projects, it is necessary to find out the business development orientation, when
considering investing capital to implement investment projects, attention should be
paid to enhancing competitiveness. to ensure immediate and long-term economic
efficiency.
Determine capital needs, organize the mobilization of capital sources to meet
the operation of enterprises. All activities of the business require capital. Entering
into business operations, corporate financial management needs to determine the
essential capital needs for the operations of the business in the period. Working
capital includes long-term and short-term capital, and it is important to organize
the mobilization of capital to fully meet the operating needs of the business. The
mobilization of capital sources has a great influence on the performance of an
enterprise. In order to decide on the appropriate form and method of capital
mobilization, enterprises need to consider and consider in many aspects such as:
capital structure, costs for the use of capital sources, advantages and

disadvantages. benefits of capital mobilization.
To well organize the use of existing funds, strictly manage revenues and
expenditures, and ensure the solvency of the enterprise. Corporate financial
management must find ways to contribute to maximum mobilization of existing
capital in business operations, freeing up stagnant capital sources. Closely monitor
and implement well the sales and other revenues, strictly manage expenses arising
during the operation of the business. Find ways to restore the balance between
revenue and expenditure in money to ensure that businesses are always able to pay.
On the other hand, it is also necessary to clearly define the expenses in the
business of the enterprise, the taxes that the enterprise must pay, determine which
expenses are the costs for the business operation and the expenses belonging to the
other activities.

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Perform well the distribution of profits, setting up and using the funds of the
business. The proper distribution of profit after tax as well as appropriation and
good use of corporate funds will make an important contribution to the
development of the business and to improve the lives of employees. Profit is the
goal of business operation is an indicator that enterprises must pay special
attention to because it is related to the existence and expansion of the business. It
cannot be said that a good enterprise has high efficiency while operating profit is
reduced. Enterprises need to have optimal methods in distributing corporate
profits. In determining the rate and form of the enterprise's funds such as
development investment fund, financial reserve fund, bonus fund and welfare
fund.
Ensure regular inspection and control over the business operations of the
business and perform well financial analysis. Through the situation of daily money
collection and spending, the implementation of financial indicators allows to

regularly check and control the operation of the business. On the other hand,
periodically need to conduct analysis of corporate financial situation. Financial
analysis to assess the strengths and weaknesses of the financial and business
performance of the business, thereby helping business leaders in overall
assessment of the performance of the business. enterprises, strengths and
weaknesses in business operations such as solvency, material rotation, capital,
business performance, from which right decisions can be made. in terms of
production and finance,
Perform well financial planning. The financial performance of the business
should be foreseen in advance through financial planning. Good implementation of
financial planning is an essential tool to help businesses proactively come up with
timely solutions when there are market fluctuations. The financial planning process
is also the appropriate financial decision-making process to achieve the business
goals.
1.2. The financial situation of a company
1.2.1. Definition of financial situation of a company

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a) Definition of financial situation of a compay
Assessment of corporate financial situation is a combination of methods that
allow assessing the past and present financial situation, predicting the future
financial situation of the business, helping managers to make the Effective
management decisions, consistent with the goals they care about.
b) Objective of corporate financial assessment
The goal of assessing the financial position of a business is different for each
audience. Specifically:
- For business managers: need information about the financial situation of the
business to control and direct the business and production situation of the business,

to orient decisions on investment and structuring financial resources, distributing
profits, assessing business performance to take measures to adjust accordingly,
implementing financial balance, profitability, solvency and forecasting risks Risk
risk, especially financial risk signals in the business, from which to make financial
forecasts and plans and appropriate financial decisions, to easily conduct
inspection and control. management in the business.
- For investors: need information about the financial assessment of the
business to clarify the development prospects of the business, estimate the value of
shares on the financial market to make a major investment decision. corpses bring
high profits in the future.
- For lenders: for short-term loans, the lender is interested in counting the
immediate solvency of the business (also known as the enterprise's ability to
respond to the maturity of the loan); For long-term loans, lenders are concerned
with the profitability of borrowed capital, invested capital and factors causing
payment risks and long-term financial risks to determine their repayment capacity.
pay capital and interest and make loan decisions.
- For people with salary in the business: the benefits of this group of people
are the income and promotion opportunities that the business gives them, so

7


assessing their financial situation helps them orient their jobs and invest. finance
for the future.
- For state management agencies: State management agencies (tax agencies,
financial inspection agencies, Statistics ...) use the results of corporate financial
assessment to inspect and supervise the business performance of enterprises in the
economy, thereby proposing policies, management mechanisms and financial
solutions suitable to the actual situation of the business, creating Favorable legal
corridor environment contributes to helping enterprises improve production and

business efficiency.
Thus, assessing the financial position of the business is a useful management
tool that helps to provide information to management entities, as a basis for making
useful management decisions to preserve and increase. your interests at the business.
c) The sequence of steps to conduct corporate financial analysis
To accurately analyze corporate financial situation, analysts need to follow 3
main steps: Information gathering, information processing, prediction and
decision.
- Collect information:Financial analysis uses all sources of information
capable of explaining and disclosing the current financial status of the business,
serving the financial prediction process. It includes inside information to outside
information, of which accounting information is concentrated in the corporate
financial statements are particularly important sources of information.
- Information processing:Information collected must be handled in a
systematic and scientific manner. Depending on different analytical objectives,
information users have analytical angles and apply different analytical methods to
calculate, compare, explain, evaluate, and determine the cause for the process.
process prediction and decision-making.
- Prediction and decision making: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 goals of growing, developing, and

8


maximizing business value. For lenders and investing in a business, it's about
making financing and investment decisions, ...
d) The sequence of steps to conduct corporate financial analysis
To accurately analyze corporate financial situation, analysts need to follow 3
main steps: Information gathering, information processing, prediction and

decision.
- Collect information:Financial analysis uses all sources of information
capable of explaining and disclosing the current financial status of the business,
serving the financial prediction process. It includes inside information to outside
information, of which accounting information is concentrated in the corporate
financial statements are particularly important sources of information.
- Information processing:Information collected must be handled in a
systematic and scientific manner. Depending on different analytical objectives,
information users have analytical angles and apply different analytical methods to
calculate, compare, explain, evaluate, and determine the cause for the process.
process prediction and decision-making.
- Prediction and decision making: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 goals of growing, developing, and
maximizing business value. For lenders and investing in a business, it's about
making financing and investment decisions, ...
e) Documents used in corporate financial analysis
In order to be able to accurately and comprehensively assess an enterprise's
financial position, analysts need to use a combination of documents including
external and internal documents:
* Documents outside the enterprise: are financial ratios, industry averages,
legal documents prescribing the accounting regime, management regime for each
business line.
* Internal corporate documents: are quarterly and annual financial statements,
detailed accounting books that track accounts, business plans for each period of the
company. In which the main and most important documents are the financial
statements of the unit. Specifically

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Accounting balance sheet: is the main financial statement, which generally
reflects the entire situation of assets and sources of asset formation at a given time.
Reporting business results: means a general financial report, generally
reflecting the situation and results of business activities in an accounting period of
the enterprise in details for each production and business activity (sales and service
provision; activities). financial activities and other activities).
Statements of cash flows: is an integral part of the corporate financial
reporting system, providing information to help users evaluate changes in net
assets, financial structure, ability to convert assets into money, liquidity and the
ability to generate cash flows during the operation.
Notes to the financial statements: is a detailed explanation of some general
indicators reflected in other financial statements and at the same time a statement
of the applied corporate accounting policies to record economic transactions
arising in the enterprise. The report reader has additional information necessary for
evaluating the financial position of the business
The above documents are the basis for analysts to get data and information,
correctly determine the financial indicators of the business and make reasonable
comment
f) Analytical method
To analyze corporate finance, one can use one or a combination of different
methods in the corporate financial analysis methods system. Here, the writer would
like to present some basic methods as follows:
Evaluation method
The evaluation method is always used in corporate financial analysis, and is
also used in many stages of the analysis process. Usually when assessing people
often use the following techniques:
Comparative method:This is a widely used method in economic analysis in
general and financial analysis in particular. When using the comparison method, it
is necessary to pay attention to the problems of comparison conditions, the basis

for comparison and the commonly used comparison technique is absolute
numerical comparison, relative numerical comparison, vertical comparison,
horizontal comparison ...

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