financial index analysis dhg pharmaceutical joint stock company

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<b>GROUP ASSIGNMENTPRINCIPLES OF ACCOUNTING</b>

<b>ACC101Lecturer: Tô Thị Thùy Dương</b>

<b>Date: 7/11/2021Class: MC1604Members:</b>

● Đỗ Tiểu Bình● Võ Châu Thành Huy● Hồ Thanh Tùng● Nguyễn Việt Thành● Phạm Nguyễn Anh Thư

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<b>Binh Dinh Pharmaceutical and Medical Equipment JSC</b> 4

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In recent years, the company has constantly strived to promote its existing strengths in termsof an extensive distribution system, production capacity, quality products, highly qualifiedpersonnel, and efficient business. Always maintain the pioneering position, brand identity,and reputation. In addition, being energized by the contribution package of technical andproduction activities from strategic shareholder Taisho, it is convenient to promptly seizeopportunities on the new path, master technology, and create new products, quality newproducts, serving domestic and international markets, best meeting the needs of allcustomers.

The company is continuing to establish and put into operation 07 subsidiaries, helping toincrease business efficiency of the whole group, increasing the number of distributionsubsidiaries to 12 companies, focusing on the Mekong Delta region. Long, including A&GPharma, TG Pharma, TOT Pharma, Bali Pharma, VL Pharma, B&T Pharma, TVP Pharma.

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<b>OPC Pharmaceutical Joint Stock Company</b>

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OPC Pharmaceutical Joint-Stock Company (OPC) is a Vietnam-based company engaged in the pharmaceutical industry. The Company manufactures and markets drugs and other medical products from natural pharmaceutical materials which are cultivated and processed at the facilities of the Company. It is also involved in the production and wholesale trading of pharmaceutical chemicals and supplies, as well as functional food. Moreover, the Company is involved in wine distillery and bottled water manufacturing. On June 13, 2014, the Company announced that it has dissolved its joint venture named OPC EXIM Real Estate Joint Stock Company. The company’s current address is at 1017 Hong Bang, Ward 9, District 6, Ho Chi Minh City

<b>Binh Dinh Pharmaceutical and Medical Equipment JSC</b>

Binh Dinh Pharmaceutical and Medical Equipment Joint Stock Company (Bidiphar) is aVietnam-based company primarily engaged in pharmaceuticals sector. The Company'sleading business activities are the production and wholesale of medicines, includingantibiotics, antipyretics, pain relievers, cardiovascular drugs, antifungal and antiviral drugs,respiratory drugs, vitamins and functional food, among others. Bidiphar is also involved inthe manufacture and distribution of medical equipment, supplies and packaging.

Address: 498 Nguyen Thai Hoc, Quy Nhon City, Binh Dinh Province

<b>Imexpharm Corporation</b>

The Company's main business is manufacturing, trading, importing and exporting modern pharmaceutical products, medical instruments, industry raw materials,...Products produced are concentrated groups of antipyretic, pain reliever, antibiotics, vitamins, and functional foods. Functionality, production revenue still accounts for over 95% and contributes 100% of

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profit. With an annual revenue of about 350 billion VND, The company accounts for about 3% of Vietnam's pharmaceutical market share, and is in the top 5 companies with the largest pharmaceutical production revenue in Vietnam. The company's current address is at No. 4, 30/04 Street, Ward 1, Cao Lanh City, Dong Thap Province.

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In general, the current ratio of DHG is quite high in all three years. This ratio has skyrocketedfrom 3.14 - 4.44 in 2 years 2018 - 2019 and decreased a little in 2020 to 4.26. Compared with3 companies DBD, IMP, and OPC, it can be seen that DHG is quite high compared to other companies in the same industry. DHG's current ratio is almost double that of DBD and OPC. This proves that the company's solvency is very good compared to the other 3 companies. However, with such a high pass rate, it will make DHG susceptible to capital death (stagnation).

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<b>3.Days sale uncollected</b>

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For DHG, the DSU ratio is well controlled and decreases year by year. This proves that DHG has the ability to recover the sales proceeds in a fairly short period of time. This is an advantage that helps the company get cash from the sale of goods quickly and can easily invest in other items. Compared with the 3 companies DBD, IMP and OPC, it proves that DHG's debt control from the sale of goods is very good. The 3 companies in the same industry above all have a fairly high ratio and keep increasing from 2018-2020, which is a cash disadvantage for all three compared to DHG.

<b>4.Days Sale In Inventory</b>

<b>Ending Inventory</b> 269,729,041,858 312,967,359,668 214,908,006,156

<b>Cost of good sold</b> 972,896,278,931 846,933,080,364 765,813,093,618

<b>Ending Inventory</b> 323,809,107,094 350,457,017,273 424,237,469,275

<b>Cost of good sold</b> 715,187,247,219 874,534,666,490 822,376,136,443

<b>Ending Inventory</b> 435,878,567,196 550,577,884,952 538,564,090,611

<b>Cost of good sold</b> 571,410,793,173 572,536,741,111 590,010,266,514

<b>Ending Inventory</b> 891,486,976,436 725,438,891,568 826,585,429,976

<b>Cost of good sold</b> 2,165,405,025,080 2,183,050,050,314 1,944,243,042,082

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In general, the DSI ratio of DHG in all 3 has a slight increase from 2018 -2020. Compared with 3 companies in the same industry, this number is approximately average (neither too high nor too low). This shows that DHG has the ability to control and sell its inventory quite well. However, increasing this ratio can also be seen as a bad sign for businesses. In 2020, thecompany's cost of goods sold decreased compared to 2 years ago but DSI increased again, showing that DHG is having problems in competing with other companies in the same industry. Usually, the lower the ratio, the better, but if it's too low, the company won't have enough stock to supply if needed. So in this figure, DHG also did quite well.

In short, DHG's liquidity ratios are in the medium to good range. It shows that DHG managesquite well in this ratio and is a company with stable growth potential compared to the 3 companies in the same industry. However, in order to achieve better results, DHG still considers and improves the average figures.

<b>B. Activity ratios</b>

<b>1.Account receivable turnover ratio</b>

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973 700 158, , ,811 988,337 900, ,052 363,904 177 143, ,Account

989 389 861, , ,098 965,590 544 373, ,

Average Account

154 413 521, , ,118 160,136 325, ,986 158,549 644 469, ,Account

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For DHG, the AR Turnover has increased steadily and increased significantly (total increase of 1.72). Thereby, we see the ability to collect short-term debt and provide credit to customersis effective. This will attract investors as DHG recovers debts faster, improves cash flow, and creates capital initiative.

When looking at the numerator, net sales fluctuated but not much. The 30% decrease in the denominator (2018-2020) has caused the AR Turnover index to increase sharply. This shows that DHG is becoming cautious in granting credit to customers.

When compared with the remaining 3 companies that tend to increase the AR Turnover index, DHG decreases. This shows that DHG has gradually better ability to collect debts and is tending to prevent bad debt risks.

<b>2. Inventory turnover</b>

COGS 972 896 278, , ,931 846,933 080, ,364 765,813 093 618, ,Average

279 812 899, , ,179 291,348 200, ,763 263,937 682 912, ,

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COGS 715 187 247, , ,219 874,534 666, ,490 822,376 136 443, ,Average

396 719 794, , ,553 439,188 422, ,324 387,347 243 274, ,

Inventory Turnover

COGS 571 410 793, , ,173 572,536 741, ,111 590,010 266 514, ,Average

374 877 775, , ,274 573,539 477, ,030 544,570 987 782, ,

Inventory Turnover

COGS 2,165 405 025 080 2 183 050 050 314 1 944 243 042 082, , , , , , , , , , ,Average

762 647 426, , ,515 808,348 470, ,055 776,012 160 772, ,

Inventory Turnover

Comment:

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For DHG, Inventory turnover ratio decreased year by year. This shows that DHG's sales time is slower, but the number is at an average level and that meets the availability of goods in stock without shortage.

Coming to the denominator and numerator shows volatility as co-increasing over 2018-2019 with a higher percentage increase in the denominator (6% vs. 0.8%) and a co-decreasing period 2019-2020 with a larger percentage decrease in the numerator (11% vs. 6%)Compared to the other 3 companies, DHG has an average Inventory Turnover index. When the OPC in 2020 with a ratio of 1.08 shows that the inventory is not much, there may be an out-of-stock situation. With DBD, it is a bit high with a ratio of 2.9, which is more risky whenit is easy to encounter inventory stagnation. DHG and IMP have a stable ratio, minimizing risks but also meeting market demand.

<b>3. Total assets turnover ratio</b>

Net Sales 1,401 024 316 251 1 261 729 021 484 1 256 952 371 543, , , , , , , , , , ,Average Asset 1,489 265 448 740 1 527 446 898 921 1 528 981 178 690, , , , , , , , , , ,Total Asset

Net Sales 1,184 817 729 231 1 402 454 493 864 1 369 421 714 781, , , , , , , , , , ,Average Asset 512 589 360, , ,222 437,305 258, ,555 1,971 814 791 066, , ,Total Asset

Net Sales 1,002 477 640 022 989 389 861 098, , , , , , 965 590 544 373, , ,Average Asset 1,126 013 263 998 1 184 712 504 963 1 166 328 051 911, , , , , , , , , , ,Total Asset

Net Sales 3,882 128 209 711 3 896 134 681 111 3 755 619 311 324, , , , , , , , , , ,

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Compared to the common ground with the other 3 companies, DHG's total asset turnover index is quite good and only loses to IMP with an index in 2020 of 1.06.

After analyzing the activity ratios, DHG showed that the management ability is good, but the asset utilization rate has not improved. However, the index of DHG is at a good level. When comparing DHG with 3 other companies, we found that DHG performed much better, even though DHG was not the best on some indicators.

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Through comparison between companies, we can see that DHG's leverage ratio is lower than that of the other two companies, and higher than IMP, which means that DHG's total debt to assets has a highrisk ratio. lower risk than the other 2 companies, DBD and OPC

Looking at these 3 companies, OCP > DBD > DHG > IMP in terms of financial risk. DBD number 31.22 in 2020 shows that 31.22% of this company's assets are financed by creditors. That is, sponsors and shareholders contribute 33.22% of the company's assets, the remaining 100-33.22%.

<b>2.Times interest earned ratio</b>

<b>Earnings before interest and taxes</b>

173,769,437,732 202,429,110,631 255,441,337,429

<b>Interest expense</b> 1,275,879,713 3,727,735,820 5,407,738,734

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<b>OPC</b> 2018 2019 2020

<b>Earnings before interest and taxes</b>

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<b>3.Working capital ratio</b>

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When comparing with 3 companies in the same industry, we can see that the result is the highest working capital ratio of DHG. That is, the amount of liquid assets of the company thatcan pay its debts during its operation.

Based on the data table, we can see that DHG's working capital ratio over the past 3 years has grown strongly, although 2020 is lower than 2019 but the difference is not significant. 0.2 is the difference between 2019 and 2020

The enterprise has enough capacity to pay its debts as well as to continue operating its business.

After looking at the analysis of the above 3 indicators, it can be seen that DHG has always kept these indicators at a stable level, and is relatively high when compared to the companies in the same industry mentioned above.

Shows that in the period from 2018 to 2020, DHG has had 2 successful years of work when the indicators show that there is no serious impact on the company's assets.

The ability to pay the items stated is still within the control of the company. And that's a good sign.

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Although the year 2018 to 2019 has a slight decrease from 15.52 to 15.34, it will increase to 16.66 in 2020. Overall, this is quite good for this company.

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For ROE, DHG's company has clearly shown the difference with other companies in the sameindustry when comparing. DHG has the leading ROE from 2018-2020 among companies. But perhapsin this index, when the company compares itself over the years, there is almost no significant growth.

<b>3.Gross margin ratio</b>

<b>Net Sale</b> 1,401,024,316,251 1,261,729,021,484 1,256,952,371,543

<b>Cost Of Good Sold</b> 972,896,278,931 846,933,080,364 765,813,093,618

<b>Net Sale</b> 1,184,817,729,231 1,402,454,493,864 1,369,421,714,781

<b>Cost Of Good Sold</b> 715,187,247,219 874,534,666,490 822,376,136,443

<b>Net Sale</b> 98,144,989,961 989,389,861,098 965,590,544,373

<b>Cost Of Good Sold</b> 571,410,793,173 572,536,741,111 590,010,266,514

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<b>Gross margin ratio</b> 44.22 43.97 48.23

For the ratio of Gross Margin Profit of DHG company in 3 years 2018-2020, it is still leadingamong companies with 44.22% for 2018, 43.97% for 2019 and finally increasing to 4% in 2020 ie. 48.23%.

Although revenue in 2020 has decreased compared to 2018 and 2019, the company has reduced COGS, so it is possible that in the future, it will increase revenue more strongly.

<b>4.Profit Margin Ratio</b>

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Looking at DHG's Net Income section, it can be seen that in 2020 there has been a strong growth. Despite having lower Net Sales than 2018, 2019 but because the company has reduced COGS, it still grows significantly.

After comparing the ratios of Profitability ratios, we can easily see that DHG is the leader in all indicators, with high profitability and profitability.

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At the same time in 2020, DHG has made a big progress in reducing COGS but increasing net income. This is a company that can grow quite well in the distant future.

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For DHG, the company's EPS increased slightly from 2018 to 2019. From 2019 to 2020, theEPS increased sharply because the company's net profit increased a lot. Thereby, it provesthat the company is operating well and making a lot of profit. In addition, the company's EPSin 3 years is greater than 1.5, showing that the company is doing very efficiently.

When compared with the remaining 3 companies, it can be seen that DHG's EPS is the largestamong the 3 companies.

For DBD, DHG's EPS is nearly 2 times larger than that of DBD year by year. This repeats thesame for the IMP.

For OPC, DHG's EPS is larger but the difference is not much.

In general, it can be seen that DHG is the most efficient and profitable company.

<b>2. Price to earnings ratio</b>

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<b>Market value per share</b>49,6 46,0 59,5

When compared with the other 3 companies, it can be seen that the P/E ratio of DHG is at anaverage level.

In 2018, DHG's P/E was much lower than IMP's (17.79 versus 24.17 for IMP). However, ahigh P/E is not a good thing because when looking at EPS, IMP's EPS is lower than DHG's,showing that IMP's business performance and profitability are worse than that of DHG. Whenother companies have erratic ups and downs, DHG's P/E has remained stable for years.

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<b>3.Book value per share</b>

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For DHG, the BVPS ratio tends to grow year by year. When comparing BVPS with DHG'smarket value per share, a big difference can be seen. However, DHG's share price still tendsto increase year by year, proving that investors still trust the company.

When compared with the other 3 companies, DHG's BVPS is only larger than DBD. For theother two companies, there is not much difference. However, when looking at the share price,it can be seen that the share price of DHG is larger than the other 3 companies and tends toincrease year by year. Thereby, it proves that DHG's business activities and profitability arehigher than other companies.

<b>4. Price to book ratio</b>

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