individual assignment topic financial statement analysis

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<b>11/2022</b>

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<b>Table of contents</b>

Part 1: Introduction

Part 2: Financial statement analysis

<b>2.1.Financial data2.2.Common-size analysis2.3.Ratios analysis2.4.Dupont analysis</b>

<b>2.5...Comment on the Statement of Cash </b>

2.4. Statement of cash flowPart 3: Conclusion

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<b>Part 1: Introduction of TH Truemilk</b>

TH Dairy Foods Joint Stock Company was established on February 24, 2009, isthe first company of TH Group with an investment project in an industrial dairy farm,modern milk processing technology and a modern dairy system. disciplined distribution.TH Group was established with the financial advice of Bac A Commercial Joint StockBank. (True Story TH, n.d.)

Company name: TH Dairy Foods Joint Stock Company

In addition to financial services business and social security activities, Bac ACommercial Joint Stock Bank pays special attention to investing in the dairy and foodprocessing industry.

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From that starting point, TH Group is gradually developing to become a leadingmanufacturer in Vietnam providing clean food products derived from nature, includingfresh milk, meat, vegetables and fruits. clean, seafood… of international quality.

For the third year in a row, TH True Milk has been named High QualityVietnamese Goods. Not only that, but in 2011, the firm was named a "reliable supplier inVietnam and prominent brand." TH True Milk products made the list of the "top 100trusted and utilized items." (TH True Milk Group: A journey of more than 10 years toredraw the `milk map` of Vietnam, 2020)

Market share:

TH true MILK fresh milk product currently accounts for about 43% marketshare in the fresh milk segment in Vietnam. As the main name of the award mentionedabove, the manufacturer TH true MILK is considered as "international class" withinternational quality and representative operator. (tuoitre.vn)

According to a report by data company Biinform in 2017, TH Group holds 4%market share in Vietnam.

Main business:

The company's main line of business is the dairy industry.

Currently, TH True Milk brand has launched many different product lines to meetthe needs of people. Popular product lines of the brand include:

Dairy products: Pasteurized fresh milk, pasteurized fresh milk, Topkid formulafresh milk, natural yogurt, nut milk, pasteurized drinking yogurt

-Butter and cheese products: Natural unsalted butter, Mozzarella sticks

Beverages: TH True Milk Juice, TH True Milk Juice, TH True Milk RICE roastedrice water

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genuine MILK fresh milk (accounting for 40 percent of fresh milk market share in Vietnam). TH School international school system, ... (True Story TH, n.d.)

Important projects:

The project of TH Group (with the TH True Milk brand) was implemented in October 2009 on a total planning area of 8,100ha in Nghia Dan district, Nghe An with a total investment of over 1.2 billion USD. This is the project that has made TH True Milk achieve remarkable achievements. The dairy project with the main brand of TH true MILK fresh milk was launched by Mrs. Thai Huong - Founder, Chairman of the TH Group's Strategy Council in the context of the world dairy market facing the milk crisis. Melamine contamination in China. Along with that, Vietnam's milk market has more than500 brands of milk and milk labeling regulations are not transparent, 92% of liquid milk products on the market are reconstituted milk powder.

Over the past 12 years, TH true MILK has become a national brand - the pride of Vietnamese people and reaching out to the world, leading the market in the fresh milk segment with a market share of up to 45%. TH's participation contributes to reducing the percentage of reconstituted milk powder on the market to less than 60%, making the milk market transparent.

In 2020, TH Farm was certified by the World Records Union to achieve the recordof "The largest closed cluster of high-tech dairy farms in the world."

In just over 12 years, the harsh land in Nghia Dan district, Nghe An province has been covered with vast fields of sunflowers, grasslands and sorghum of TH Farm.

TH True Milk entered Vietnam's dairy market in 2009 while already existing in both domestic and foreign markets with many well-known market segments such as Vinamilk, Moc Chau, Dutch lady, etc. However, in recent years, despite many difficult economic years, TH True Milk dairy industry is one of the industries with good growth

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rate. Among industries, Vinamilk currently holds the largest market share and continuesto increase market share. This is the biggest competitor of TH True Milk. Another competitor that TH True Milk must also pay attention to is Dutch Lady

<b>Part 2: Financial statement analysis2.1. Financial data</b>

<b>2.2. Common-size analysis</b>

<b>Table 1: Income statement of THM</b>

Unit: Million dong

13b. Venture companyprofit/(loss)

14. Net accounting profit/(loss)before tax

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<b>Table 2: Balance sheet of THM</b>

1. Trade accounts receivable 23,007 21,577 22,473 112,864 178,448

3. Intercompany receivables4. Construction contract inprogress receivables

6. Provision for doubtful debts

4. Other current assets

1. Long-term customerreceivables

2. Long-term intercompanyreceivables

4. Provision for doubtful LTreceivable

1. Tangible fixed assetsAccumulated depreciation

263,624 207,986 191,035 148,776 140,546

Accumulated depreciation -532,296 -599,987 -650,157 -681,267 -708,456

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2. Finance lease assetsCost

<b>IV. Long-terminvestments</b>

1. Investments insubsidiaries2. Investments inassociates3. Other long-terminvestments

4. Provision for diminuation in value oflong-term investments

3. Advances fromcustomer

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progress payables

9. Other payables 115,852 176,930 189,567 49,071 5,970

II. Long-term liabilities 2,073 2,048 2,913 60,090 23,649

2. Long-term intercompanypayables

3. Other long-term payables 2,073 2,048 2,913 60,0904. Long-term borrowings

5. Deferred income tax liabilities6. Provision for severanceallowances

7. Provision for long-termliabilities

6. Foreign exchange differences7. Investment and developmentfunds

64,468 82,532 16,694 44,768 76,6798. Financial researve funds

9. Other funds in owners' equity

-100.00

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Interest expenses 300 100.00

13. Net otherincome/(expenses)

-27463 -12.03 -15190 -7.56 111961 60.32 56190 18.8815. Business income

tax - current

16. Business incometax - deferred17. Business incometax expenses

18. Net profit/(loss)after tax

-36146 -16.67 -13699 -7.58 113793 68.16 38377 13.67Through the data table, it can be seen that THM's revenue in the period 2107-2021 is trending up. The highest revenue growth in this period was in 2020 with 10.27%.THM's profit after tax in this period tended to grow well, although in the first three yearsthis indicator was at a negative level. However, in 2020 and 2021, this indicator is at apositive level. In particular, in 2020, this indicator will increase to 68.16%.

<b>Table 4: Assets and capital fluctuations of THM</b>

<b><small>A. Current Assets10553212.96-48863-5.3116469018.901182896114.20</small></b>

<small>I. Cash and cash equivalents-75461-76.5250590218.53-52317-70.9570726330.14II. Net Value Short-term investments9616226.12-45050-9.7019181545.741045848171.13III. Accounts receivable65889.92-1718-2.3574075103.9012733887.60IV. Inventories,net7591527.74-55791-15.96-89337-30.41-11663-5.70</small>

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<small>I. Long-term trade receivables0016500.00II. Fixed Assets-55638-21.11-14378-6.91-42282-21.84-9560-6.32IV. Long-term investments1635.561524.59810.5300.00V. Other long-term assets-2234-29.62207739.14-1376-18.63513185.401. Long-term prepayments-2234-29.62207739.14-1376-18.63513185.40</small>

<b><small>Total Assets480174.42-61637-5.4415038214.031264370103.42</small></b>

<b><small>A. Liabilites4694714.71-20525-5.61-34788-10.0728960.93</small></b>

<small>I. Current liabilities4697214.82-21390-5.88-91965-26.853933615.70II. Long-term liabilities-25-1.2186542.24571771962.82-36441-60.64B. Owner's equity10700.14-41112-5.3518517025.481261475138.33I. Capital and researves10700.14-41112-5.3518517025.481261475138.331. Paid-in capital00.009954017.5100.0043200064.67</small>

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<b>2.3. Ratios analysis:</b>

<b>Table 5: Financial ratio of THM</b>

<b>31/12/201731/12/201831/12/201931/12/2020 31/12/2021Liquidity ratios</b>

Inventory TurnoverRatio

<b>Market value ratio</b>

Earnings Per Share 3,520.00 2,892.00 2,601.00 3,772.00 2,891.00Book Value Per Share 13,488.74 13,507.57 10,840.82 13,613.18 19,746.95

<b>Liquidity ratios show the liquidity of the enterprise, which is an indicator for the</b>

Company to monitor its financial status in the short term, ensuring that it does not fallinto a state of financial distress. From 2017 to 2021, the Company's Current Ratio arealways 1.5 times greater.

<b>Table 5.1: Financial ratio of Dutch Lady</b>

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<b>Table 5.2: Financial ratio of Vinamilk</b>

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Current Ratio of TH True Milk in 2020 is 1.63 times higher than the currentratio in 2019

Current ratio of Dutch Lady in 2020 is 0.83 times higher than current ratioin 2019

Current ratio of Vinamilk in 2020 increased 1,187 times the current ratio in2019

TH True Milk's current ratio from 2019-2020 is the highest, proving the company'sgreater solvency. Dutch Lady's is the lowest, showing that the solvency of this brand islower than that of the other two brands.

In 2019, Vinamilk's quick ratio held the top position: 1.37.The lowest is TH True Milk with a quick ratio of 0.42

In 2020, Vinamilk's quick ratio still holds the top position: 1.74, an increase of1.27 times in 2019. The high value of quick ratio means that the business iscompletely able to pay debts immediately. Short-term. The brand furtherstrengthens the confidence of investors.

Meanwhile, Dutch Lady stood at the lowest with a quick ratio of 0.42, down0.69 times compared to 2019. The value of Quick Ratio dropped rapidly, which meansthat the company's highly liquid assets are at a low level and difficult to control. control,it will be difficult for enterprises to quickly pay short-term debts

The quick ratio value of TH True Milk in 2020 increased the fastest among the3 milk brands. The quick ratio value in 2020 increased by 1.59 times compared to 2019.This is a sign of outstanding development.

<b>Efficiency ratio</b>

The company's inventory in 2019 was quite large, accounting for 31.15% of term assets, meaning the company's liquidity decreased. However, in 2020, the ratio ofinventory/current assets will decrease to 19.69%, in 2021 it will decrease to 8.7%, theinventory turnover ratio will increase (from 6.44 times to 8.32 times), in 2021, theinventory turnover will increase to 10.22 times, this is a positive sign that the Companyhas applied a reasonable inventory management policy, ensuring the level of production

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short-and supply for the market, during the year there was no significant slow-movinginventory.

D/A reached 12.61, D/E reached 3.55% both of these indicators decreasedcompared to 2020. In which, short-term debt accounted for 13.34% of total capital. Thiscoefficient has always been maintained stable by Moc Chau Milk, the payment policieswith suppliers, are tight and consistent with the operations of the manufacturingcompany.

<b>Profit ratio</b>

From 2020, the Company has restructured the distribution system, optimized salessupport programs, and reduced operating costs during the period; prioritizing the development of raw material areas to ensure the quality of input milk... resulting in anincrease in profit after tax of 13.6%, reaching more than VND 319.1 billion, ROE in 2020 reaching 34,26%, ROA reaching 24,47%. This sign of positive business activities further increases the trust and attachment of shareholders in the development of THM inthe future.

<b>2.4. Dupont:</b>

<b>Table 6: Dupon ananlysis</b>

ROE of industry = 15.39% -> ROE of THM lower than ROE of industry.

<b>2.5. Statement of cash flow:</b>

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<b>Table 7: Statement of cash flow</b>

31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021Net cash provided by

<b>Part 3: Conclusion</b>

It can be seen that TH True Milk enters the Vietnamese dairy market while there are many competing brands and has been present for a long time in the market. With a business strategy, typically a "clean" milk project, combined with an impressive slogan:"the essence of nature is kept intact in every drop of clean milk", TH True Milk has quickly created Build trust and high awareness in the consumer market.

The company has successfully broken through and developed rapidly. In my opinion, the company will continue to grow in the coming years but will face many difficulties. Whenits rival - Vinamilk, a long-established brand, holds the largest market share in Vietnam's milk market. Most of TH True Milk's raw materials are imported, so input materials and costs are high. Therefore, in general, it is higher than many other brands.

I will discuss with the manager whether I need to find cheaper raw materials or even be able to create local sources. And create more diverse products.

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1, Biz, T. school. (2022). What is TH true MILK and the process of formation and developmentof TH true MILK. Biz Market. thanh-va-phat-trien-cua-th-true-milk-1243.html

2,True story TH. (n.d.). True Story TH. TH True Milk Group: A journey of more than 10 years to redraw the `milk map` of Vietnam.(2020, November 30). Vietnam Entrepreneur Electronic Magazine. financial-statement-of-vinamilk-group-2/7532552

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