Analysis of business capital efficiency at ha do 1 joint stock company

MINISTRY OF FINANCE
ACADEMY OF FINANCE

----------

NGUYEN PHAM NGOC NAM
CQ57/09.01CLC

GRADUATION THESIS

Topic: ANALYSIS OF BUSINESS CAPITAL EFFICIENCY AT HA
DO 1 JOINT STOCK COMPANY

Major : Financial Analysis
(Advanced Education Program)
Code
Instructors : 09
: Ph.D. Pham Thi Quyen

Ph.D Dao Hong Nhung

HANOI – 2023

Academy of Finance Graduation Thesis

DECLARATION
I declare that this thesis was written entirely by myself with the assistance of
the instructor and is not based on the research of other writers. The
information gathered, cited, and studied in this article is accurate and has a
clear source.

Student

Nguyen Pham Ngoc Nam

ST: Nguyen Pham Ngoc Nam i Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

ACKNOWLEDGMENTS
During the process of researching and completing the thesis, I have received
dedicated guidance and valuable help from the lecturers of the Academy of
Finance as well as the staff of the Ha Do 1 Joint Stock Company.
First of all, I would like to express my deep gratitude to the teachers, lecturers
of the Academy of Finance, the teachers of the Financial Analysis department
who have wholeheartedly helped and imparted specialized knowledge to me
for four years. study last.
At the same time, I would also like to thank the members of Ha Do 1 Joint
Stock Company for creating favorable conditions during my internship at the
company. I wish the company will achieve more success and develop more
and more in the future.
In particular, I would like to thank my teacher, Dr. Pham Thi Quyen and Dr.
Dao Hong Nhung, who enthusiastically guided, provided valuable comments
and shared valuable experiences and helped me throughout the process of
completing my thesis.
In the process of completing the thesis, although I have tried to, I still have
many shortcomings. Therefore, I hope to receive valuable suggestions and
evaluations from teachers and friends!
Thank you sincerely

Hanoi, February 13, 2023

Student

ST: Nguyen Pham Ngoc Nam ii Nguyen Pham Ngoc Nam
Class: CQ57/09.01CLC

Academy of Finance TABLE OF CONTENTS Graduation Thesis

DECLARATION........................................................................... i
ACKNOWLEDGMENTS.............................................................. ii
TABLE OF CONTENTS..............................................................iii
ACRONYM............................................................................... vi
LIST OF TABLES......................................................................vii
PREFACE.................................................................................. 1

The urgency of the thesis.....................................................1
Overview of the research situation of the thesis...................2
Research objectives..............................................................4
Subjects and scope of the study...........................................4
Theoretical and practical significance...................................5
Research Methodology..........................................................5
Structure............................................................................... 6
CHAPTER I: BASIS THEORIES OF ANALYSIS OF BUSINESS
CAPITAL EFFICIENCY................................................................7
1.1 Basis theories about business capital and business
capital efficiency...................................................................7

1.1.1 Business capital concept...........................................7
1.1.2 Features of business capital......................................7
1.1.3 The role of business capital.......................................8
1.1.4 Business capital classification...................................9

1.1.5 Classification of business capital sources................11
1.1.6 Business capital efficiency of enterprises................12
1.2 Basis theories of analysis of business capital efficiency
............................................................................................ 13

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Academy of Finance Graduation Thesis

1.2.1 The concept and purpose of analysis of business
capital efficiency...............................................................13
1.2.2 Databases and methods of analyzing the efficiency
of business capital use.....................................................16
1.2.3 Contents of analysis of business capital efficiency of
enterprises....................................................................... 20
1.2.4. Capital profitability.................................................30
1.3 Factors affecting business capital efficiency of enterprise
............................................................................................ 37
1.3.1 Objective factors.....................................................37
1.3.2 Subjective factors....................................................39
CONCLUSION OF CHAPTER I..................................................41
CHAPTER II: ANALYSIS OF BUSINESS CAPITAL EFFICIENCY AT
HA DO 1 JOINT STOCK COMPANY...........................................42
2.1 About Ha Do 1 Joint Stock Company.............................42
2.1.1 The process of formation and development of the
company........................................................................... 42
2.1.2 The organizational management apparatus of the
company........................................................................... 45
2.1.3 Characteristics of the company's industry and field of
activity.............................................................................. 51

The company's ongoing projects......................................52
2.1.4 Advantages and disadvantages of the company.....53
2.1.5 Analysis of the current state of assets, capital
sources and business results of the company..................54
2.2 Analysis of business capital status and business capital
efficiency of Ha Do 1 Joint Stock Company.........................75

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Academy of Finance Graduation Thesis

2.2.1 Analysis of the current situation of business capital
efficiency at Ha Do 1 Joint Stock Company.......................75
2.3 General assessment of business capital efficiency at Ha
Do 1 Joint Stock Company.................................................108
2.3.1 Results...................................................................108
2.3.2 Limitations and causes..........................................109
CONCLUSION OF CHAPTER II...............................................111
CHAPTER III: SOLUTIONS TO IMPROVE BUSINESS CAPITAL
EFFICIENCY OF HA DO 1 JOINT STOCK COMPANY................112
3.1 Economic context.......................................................112
3.2 Development orientation of Ha Do 1 Joint Stock
Company........................................................................... 115
3.3. Solutions to improve the efficiency of business capital
use of Ha Do 1 Joint Stock Company.................................116
3.3.1 Capital mobilization solution.................................116
3.3.2 Accelerate the flow of working capital...................119
3.3.3 Improve income revenue.......................................122
3.3.4 Improve cost management efficiency...................122
3.3.5 Enhance the internal business...............................124

CONCLUSION OF CHAPTER III..............................................126
FINAL CONCLUSION.............................................................127

ST: Nguyen Pham Ngoc Nam v Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

ST: Nguyen Pham Ngoc Nam vi Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

LCT ACRONYM
HSkd
Hđ Total revenue
Business capital efficiency
SVLĐ Short-term investment
DTT coefficient
Working capital turnover
Scđ Revenue from sales and
Slđ service provision
Klđ Average fixed assets
Average working capital
VLD Working capital turnover
SVtk period
GV Working capital
Stk Inventory turnover
Ktk Cost of goods sold
Gtk Average inventory
SVpt Inventory turnover period
Spt Inventory balance

Kpt Debt collection turnover
BEP Debt collection
EBIT Debt collection period
Hhđ Basic earning power
Profit before tax and interest
NP Operating profitability before
Ht interest and tax
Hcp Profits after taxes
ROA Self-funding coefficient
ROS Cost coefficient
ROE Return on assets
Return on sales
Return on equity

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Academy of Finance Graduation Thesis

LIST OF TABLES
Diagram 2.1: Organization management apparatus diagram..........................45
Diagram 2.2: Diagram of financial accounting department............................48

Table 2.1: Structure of workers in 2021..........................................................50
Table 2.2: Analysis of fluctuations and capital structure of Ha Do 1 Joint
Stock Company...............................................................................................62
Table 2.3: Analysis of business results of Ha Do 1 Joint Stock Company.....70
Table 2.4 Overview of business capital performance of Ha Do 1 JSC...........75
Table 2.5 An overview of business capital performance with companies in the
same industry...................................................................................................78
Table 2.6 Analysis of business capital effectiveness of Ha Do 1 JSC............80

Table 2.7 Analysis of fixed capital performance............................................85
Table 2.8 Analysis of working capital movement rate of...............................88
Table 2.9 Analysis of inventory turnover rate.................................................92
Table 2.10 Analysis of the turnover rate of receivables..................................95
Table 2.11 Analysis of the basic earning power at Ha Do 1 Joint Stock
Company.........................................................................................................97
Table 2.12 Analysis of return on assetsat Ha Do 1 Joint Stock Company....100
Table 2.13 Return on equity at Ha Do 1 Joint Stock Company....................103

Figure 1. Chart showing the value of working capital and business capital...82
Figure 2. Fixed assets through the end of 2019-2021.....................................86
Figure 3. Inventory value at the end of 2019, 2020 and 2021.........................94
Figure 4. Average share of equity and total assets 2020-2021......................105

ST: Nguyen Pham Ngoc Nam viii Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

PREFACE

The urgency of the thesis

*Theoretical basis
With the expansion of the market economy and the State's increasingly

rigorous macroeconomic policies, enterprises are really facing high
requirements for efficiency in capital allocation and management. The State
always supports enterprises, but is ready to supervise and investigate
suspected enterprises, especially issues related to business capital; Is business
capital properly allocated? Does it generate the expected profit? Is capital

being used in the right direction for the business? Thus, it can be seen that
business capital efficiency can determine the success and failure of
enterprises, so business capital efficiency is definitely always a topic that
every business is interested in. The regular analysis and evaluation of
business capital efficiency to assist management entities in quickly taking
measures to overcome limitations and promote enterprise advantages in
capital management and use. The goal of a business capital situation analysis
is to assess the situation of using business capital in the enterprise properly,
fully, comprehensively, and objectively. Consider capital allocation, the
ability to finance capital sources, the ability to mobilize and develop capital,
and the efficiency with which those funds are used. Simultaneously,
analyzing business capital efficiency aims to identify internal contradictions
in capital management, analyze the causes affecting capital management, and
provide directions and measures to improve the effectiveness and efficiency
of capital management in enterprises.

*Practical basis
In recent years, the state and governments have identified basic

construction as an important manufacturing sector and a driving force in the
national economy. Buildings, urban areas, transportation works, wharves, and

ST: Nguyen Pham Ngoc Nam 1 Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

other products of this industry contribute essential values to the country's
economic renewal. Furthermore, as we battled the Covid-19 pandemic, we
became increasingly aware of the importance of fundamental values - the
most important things in the face of adversity, from which businesses can

benefit.

Ha Do 1 Joint Stock Company primarily engages in the construction and
installation of civil and industrial projects, as well as urban infrastructure
engineering works. This is a significant independent material production
industry that is tasked with reproducing fixed assets while utilizing a large
amount of society's accumulated capital, contributing significantly to GDP as
an industry that attracts foreign capital in the process of industrialization and
modernization.

Because there are large-scale works, projects and architectures, and
complex structures in construction enterprises, mobilizing and effectively
using business capital is always a top priority.

Analysis of business capital efficiency is important in business activities
because it allows the company to assess its level of capital use in order to
achieve the highest efficiency at the lowest cost. Simultaneously, on the basis
of providing useful information to interested parties such as investors, credit
institutions, and so on, recognize the current financial situation in order to
make effective investment decisions.

Because of the importance and current situation of using business capital, I
decided to choose the topic "Analysis of business capital efficiency at Ha Do
1 Joint Stock Company" as a good thesis to improve the company's capital
use efficiency through my internship at Ha Do 1 Joint Stock Company.

Overview of the research situation of the thesis
Business capital efficiency analysis is important and necessary in

analyzing enterprise business activities to determine the level of use with the

ST: Nguyen Pham Ngoc Nam 2 Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

highest efficiency and at the lowest cost. As a result, the authors are deeply
interested in the topic of analyzing the effectiveness of using business capital,
and they quickly grasp the topic and conduct current research on it. Inside:

- Author Ngo The Chi, Nguyen Trong Co of the Academy of Finance
(reprinted 2015) in the Syllabus of Corporate Financial Analysis has provided
a theoretical foundation for analyzing the efficiency of business capital use
including analysis of capital use performance and profitability of capital.

- Author Do Le Anh (2016) with the thesis title "Analysis of capital use
efficiency at Song Da 2 Joint Stock Company". The thesis has systematized
the basic theories on business capital efficiency, thereby applying to the
situation and offering solutions and recommendations to improve business
capital efficiency at Song Da 2 JSC.

- Author Nguyen Thi Kim Hong (2021) with the thesis topic "Analysis
of business capital use efficiency at Ha Mai Construction Investment and
Services Joint Stock Company". The dissertation systematically clarified and
clarified the basic reasoning for the effective analysis of the use of business
capital by enterprises. Analyze and evaluate the current situation of business
capital use efficiency at Ha Mai Construction Investment and Service Joint
Stock Company. Propose a number of solutions to improve business capital
efficiency at the Company.

- Author Nguyen Phuong Anh (2022) with the thesis topic "Analysis of

business capital efficiency of Visicons Construction and Investment Joint
Stock Company" systematized and updated the basic reasoning on the
analysis of the efficiency of business capital use of enterprises. Thereby, the
author analyzed the current state of use efficiency and analyzed and evaluated
business capital efficiency at Visicons Construction and Investment Joint
Stock Company, from which make recommendations to improve business
capital efficiency at the Company.

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Academy of Finance Graduation Thesis

Thus, the aforementioned documents deal with business capital
efficiency analysis, inheriting the theoretical parts of business capital
efficiency analysis such as objectives, content, spending and methods that
some authors have written about business capital efficiency analysis but in
companies. Recently, the number of new studies on the topic of business
capital efficiency is not as much as before, especially in the context that the
economy has been heavily affected by the pandemic. Therefore, the author
will continue to inherit the theory, but using analytical tools to analyze
business capital efficiency of Ha Do 1 Joint Stock Company in the period of
2020 – 2021, this is the gap that the thesis author continues to research.

Research objectives
- Research and systematize the basic theories on business capital
efficiency at enterprises.
- Analyzing and evaluating the current situation of business capital
efficiency of Ha Do 1 Joint Stock Company.
- Proposing solutions to improve business capital efficiency of Ha Do 1
Joint Stock Company.

Subjects and scope of the study
- Object of study: Business capital efficiency
- Scope of the study:
+ Content: Analysis of business capital efficiency of Ha Do 1 Joint
Stock Company to serve managers to make decisions to improve the
efficiency of the use of business capital.
+ Space: Collecting and researching business capital efficiency at Ha
Do 1 Joint Stock Company.
+ Time: Data is taken from the financial statements for the years
2019-2021 of Ha Do 1 Joint Stock Company.

ST: Nguyen Pham Ngoc Nam 4 Class: CQ57/09.01CLC

Academy of Finance Graduation Thesis

Theoretical and practical significance

*Theoretical significance
The topic has systematized the basic reasoning and updated with new
updates on the analysis of the efficiency of business capital use of
enterprises.

*Practical significance
The author chose to analyze medium-sized enterprises to reflect the
situation of small and medium-sized enterprises in the industry, thereby
giving practical solutions with Ha Do 1 Joint Stock Company in
particular and the group of businesses of the same size in the industry in
general.

Research Methodology

* Methodology
Works using the dialectical materialism and historical materialism of
Marxism-Leninism

*Detailed method
Data collection methods
- Direct collection: directly observe and contact objects to directly
collect necessary information, carefully record the collected results.
- Indirect collection: through the documents of the internship unit such
as available documents, financial statements ... necessary information for
the process of completing the dissertation at the company's departments:
Finance - Accounting Department and other information channels. Read
accounting laws, accounting standards, and circulars to serve the
distribution of documents.
*Financial analysis methods
- Collect data, system statistics, generate and analyze actual corporate
profitability data. Based on the findings of the calculation and

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Academy of Finance Graduation Thesis

comparison of profitability indicators, as well as the results of the
quantification of the influence of factors on the indicator, make
comments and evaluations on the company's organization, management,
and capital usage. The assessment technique system (comparison,
division, correlation relationship, and ranking) and the method of factor
analysis are the primary analytical procedures used (Dupont, continuous

substitution, difference, balance, etc.)
After collecting, the author synthesizes, systems the data and adjusts
for analytical purposes.
Structure

In addition to the introduction, conclusion, appendix and list of
references, the main content of the thesis is structured in three chapters as
follows.

Chapter 1: Basic theories about analysis of business capital
efficiency

Chapter 2: Analysis of business capital efficiency at Ha Do 1 Joint
Stock Company

Chapter 3: Solutions to improve business capital efficiency of Ha
Do 1 Joint Stock Company

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Academy of Finance Graduation Thesis

CHAPTER I: BASIS THEORIES OF ANALYSIS OF BUSINESS

CAPITAL EFFICIENCY

1.1 Basis theories about business capital and business capital efficiency

1.1.1 Business capital concept
In the process of production and business activities, enterprises need

basic factors such as labor materials, objects of labor and labor power.
However, businesses cannot meet these factors separately, so businesses need
to spend some currency in accordance with size and business conditions to
have these factors. The amount of currency that is advanced for investment in
procurement, the formation of advanced assets for production and business
activities is considered business capital.

Thus, it can be said that the business capital of the enterprise is the
entire amount of advance money to form the necessary assets to meet the
scale and conditions for production activities. business of business.
Alternatively, business capital is the monetary manifestation of all assets that
the enterprise invests and uses for the purpose of profit.

1.1.2 Features of business capital
In the process of production and business, the business capital of the

enterprise is inevitable and it is constantly moving and transforming the form
of expression. From the initial form of monetary capital to the form of
materials and then back to the form of currency. This process is carried out
continuously, into a cycle and repeats the cycle. This whole cycle is called the
process of circulation, the cycle of the business capital of the enterprise. This
process can take place quickly or slowly, depending largely on the economic
and technical characteristics of each business line, and on the level of
organization.

In the conditions of a market economy, business capital is not only a
prerequisite for the birth of an enterprise, but also considered a special

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Academy of Finance Graduation Thesis

commodity. Business capital is the monetary manifestation of certain assets
(both tangible and intangible assets) that the enterprise mobilizes and uses in
business. The business capital of the enterprise is always in motion and
associated with a certain owner. Enterprises cannot buy and sell ownership of
capital, but owners can buy and sell the right to use business capital in the
financial market. The price of the right to use business capital is the
opportunity cost of using the business capital of the enterprise. At the same
time, due to the impact of Profitability and risk factors, the business capital of
the enterprise is always valuable over time. A current business capital will
have a different economic value than a future business capital and vice versa.
Proper awareness of the above characteristics of business capital is basic
issues for businesses to mobilize and manage the use of their business capital.
in an economical, efficient way.

1.1.3 The role of business capital
Business capital plays a particularly important role in the activities of

enterprises. This capital has a number of prominent roles such as:
Business capital plays a prerequisite role in the formation and

operation of a business. At the same time, based on this capital, it can be
divided into large, medium or small enterprises.

If a business wants to operate and develop sustainably in the future, it
must have business capital. For example, to operate, it is necessary to have
labor, materials, equipment or machines. But to get these things, you have to
use money from business capital. If a business does not have enough capital,

production and business activities will definitely not be conducted and the
company cannot maintain.

In business, there is always a certain transformation of facilities. Only
when businesses have capital can leaders come up with the most effective
business strategies. From the capital factor, the leader will make decisions on

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Academy of Finance Graduation Thesis

improving machinery and equipment, expanding production and business to
compete with other units.

Business capital plays an important role in maintaining and laying the
foundation for the future development of the business. Therefore, businesses
must know how to manage business capital to achieve the best efficiency.

1.1.4 Business capital classification
There are many ways of classifying business capital such as by source

of formation; rotation characteristics; time of mobilization and use; scope of
use.

1.1.4.1 Classification according to the results of investment activities
According to this standard, the business capital of the enterprise is

divided into business capital invested in liquid assets, fixed assets and
financial assets of the enterprise.

Business capital invested in real estate is the amount of investment
capital to the image of liquid assets for production and business activities of
the enterprise, including cash and physical capital. private goods, receivables,
other types of business assets.

Business capital invested in fixed assets is the investment capital to
form tangible and intangible fixed assets, such as factories, machinery and
equipment, means of transport, transmission equipment, equipment,
management tools, expenses for purchasing patents, inventions, exclusive
product marks, advantage value on business location business enterprises ...

Business capital invested in financial assets is the amount of corporate
capital invested in financial assets such as stocks, corporate bonds,
Government bonds, bank notes, certificates investment funds and other
valuable papers.

Each type of investment asset of the enterprise has a different shelf life
and liquidity characteristics. This has a huge effect on the turnover time of

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Academy of Finance Graduation Thesis

business capital as well as the level of risk in the use of business capital of the
enterprise. Therefore, the above classification helps businesses choose a
reasonable and effective investment asset structure. For each enterprise, the
structure of investment capital in business assets is often not the same due to
differences in business line characteristics, investment decision choices of
each business. However, in order to achieve high business efficiency,
businesses must focus on ensuring synchronization and balance. production

capacity between investment assets, while ensuring liquidity and risk
dispersion of investment assets in the enterprise.

1.1.4.2 Classification according to the characteristics of capital turnover
According to the characteristics of the rotation of business capital, the
business capital of the enterprise is divided into fixed capital and working
capital. Fixed capital of an enterprise is the amount of capital invested to
build or procure fixed assets used in business. As the amount of advance
monetary capital that is easy to build and procure fixed assets, the size of
fixed capital will more or less determine the size, capacity and technical level
of fixed assets. On the contrary, the economic and technical characteristics of
fixed equity dominate the rotation characteristics of fixed equity. In which the
basic characteristics of fixed capital are: Slow turnover rate, value is gradually
transferred into product value in each business cycle, after many years just
completed a cycle, cycle.
The working capital of an enterprise is the amount of advance monetary
capital used for procurement, the formation of labor resources used in
production and business of the enterprise as raw materials production
reserves, unfinished products, semi-finished products, finished products for
consumption, capital in advance, remain in payments. The basic characteristic
of working capital is the fast flow time, the manifestation form of working

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Academy of Finance Graduation Thesis

capital is always changing, its value is shifted in its entirety, times into
product value after each business cycle.
This classification shows the characteristics of rotation of each type of
business capital, thereby helping enterprises take measures to organize the

management and distribution of capital use. business of business accordingly.
Generally, in the business of the enterprise, the faster the business capital
circulates effectively. That not only helps businesses quickly recover capital,
limit risks that may be encountered in business, but also overcome capital
difficulties, preserve and develop business capital of enterprises.

1.1.5 Classification of business capital sources

1.1.5.1 Classification by source
According to this standard, business capital is divided into the capital

from owners, contributed capital, undivided profits, capital from issued shares
and loans.

Equity: This capital is formed from the capital of the owner, the
contributed capital of investors, the capital arising in the process of
production and business.

Capital contribution: When a business is established, there is always an
initial capital contribution contributed by the owners.

Undivided profit: During the operation, production and business
activities, the enterprise will get capital if the business is effective and the
capital accumulated from profits that do not have to be shared and are
reinvested.

Stock issuance: Businesses can increase their capital by issuing shares
to raise capital for the business.

Loans: Businesses can borrow short-term or long-term capital to

continue operating.

ST: Nguyen Pham Ngoc Nam 11 Class: CQ57/09.01CLC