(Luận văn thạc sĩ) nâng cao hiệu quả hoạt động kinh doanh của công ty TNHH hóa chất petrolimex​

ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN HẢI LONG

NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH CỦA
CƠNG TY TNHH HĨA CHẤT PETROLIMEX
IMPROVING BUSINESS PERFORMANCE
AT PETROLIMEX CHEMICALS LIMITED COMPANY

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020


ĐẠI HỌC QUỐC GIA HÀ NỘI
KHOA QUẢN TRỊ VÀ KINH DOANH
---------------------

NGUYỄN HẢI LONG

NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH CỦA
CƠNG TY TNHH HĨA CHẤT PETROLIMEX
IMPROVING BUSINESS PERFORMANCE
AT PETROLIMEX CHEMICALS LIMITED COMPANY

Chuyên ngành: Quản trị kinh doanh
Mã số: 8340101.01
LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS. HỒNG ĐÌNH PHI

HÀ NỘI - 2020


DECLARATION

The author confirms that the thesis's research outcomes result from the author's
independent work during the study and research period, and it is not yet published in
other's research and article.
The other's research results and documentation (extraction, table, figure, formula,
and another document) used in the thesis are correctly cited, and permission (if required) is
given.
The author is responsible for the Thesis Assessment Committee, Hanoi School of
Business and Management, and the laws for the declaration mentioned above.
Hanoi, June 30th, 2020

NGUYEN HAI LONG


ACKNOWLEDGEMENTS

First of all, I would like to express my sincere thanks to Assoc. Prof. Dr. Hoang
Dinh Phi, for his patience, motivation, inspiration, passion, and vast knowledge,
continuously supporting me throughout the study course and thesis research.
Besides the primary instructor, I would like to thank the HSB faculty and support
staff to study and research my thesis.
I want to thank the Board of Directors of Petrolimex Chemical Co., Ltd., and my
colleagues for creating all conditions for me to implement the topic and use the unit's data
to complete the article.

Mainly, I would like to thank my family for all the support and encouragement
during this Master's course and in my life.
Hanoi June 30th, 2020

NGUYEN HAI LONG


TABLE OF CONTENT
DECLARATION
ACKNOWLEDGEMENTS
LIST OF ABBREVIATIONS
LIST OF TABLES, CHARTS, AND DIAGRAMS
INTRODUCTION .................................................................................................................... 6
1. The urgency of the topic ......................................................................................................... 1
2. The research objectives of the topic ....................................................................................... 2
3. Object and scope of the study ................................................................................................. 2
4. Research question ................................................................................................................... 2
5. Research methods ................................................................................................................... 3
5.1. Data collection methods....................................................................................................... 3
5.2. Data analysis method ........................................................................................................... 4
6. The significance of the topic ................................................................................................... 5
7. Structure of the topic............................................................................................................... 6
CHAPTER I: THEORETICAL BASIS OF BUSINESS PERFORMANCE ...................... 7
1.1. Overview of business performance...................................................................................... 7
1.1.1. The concept of business performance ............................................................................... 7
1.1.2. Distinguish between business performance and results .................................................... 8
1.1.3. The persuasive nature of business operations ................................................................... 8
1.1.4. Classification of business performance .......................................................................... 10
1.1.5. The Necessity and Meaning of Improving Business Operations. ................................... 11
1.2. Content and consumption indicators in business performance analysis. ........................... 12

1.2.1. Content analysis of business results................................................................................ 12
1.2.2. Overall effect .................................................................................................................. 14
1.3. Evaluate the efficiency of input resources. ........................................................................ 15
1.3.1. Effective use of Labor..................................................................................................... 15
1.3.2. Effective use of fixed assets............................................................................................ 15
1.3.3. Effective use of liquid assets .......................................................................................... 15
1.4. Factors affecting business performance ............................................................................. 16
1.5. Content and analytical methods ......................................................................................... 16
1.5.1. Content analysis .............................................................................................................. 16


1.5.2. Analytical method ........................................................................................................... 17
1.6. Directions and measures to improve business performance .............................................. 21
CHAPTER II. BUSINESS PERFORMANCE ANALYSIS OF PETROLIMEX
CHEMICALS COMPANY LTD ........................................................................................... 24
2.1. Overview of Petrolimex Chemicals Company Limited. .................................................... 24
2.1.1. History and development of Petrolimex Chemicals Company Limited. ........................ 24
2.1.2. Characteristics of business activities at Petrolimex Chemicals Company Limited. ....... 24
2.1.3. Organizational and managerial characteristics at Petrolimex Chemicals Company
Limited. ..................................................................................................................................... 25
2.2. Overview of industrial chemicals and industrial chemical business activities .................. 28
2.2.1. Characteristics of chemical products and industrial chemical business ......................... 28
2.2.2. Characteristics of industrial chemical trading ................................................................ 30
2.3. Analyzing the business performance of Petrolimex Chemical Co., Ltd. in the period
2017-2019 ................................................................................................................................. 30
2.3.1 Overview of production and business results of Petrolimex Chemical Co., Ltd. in the
period 2017-2019 ...................................................................................................................... 30
2.3.2 Analysis of general financial indicators of Petrlimex Chemical Co., Ltd in the period
2017-2019 ................................................................................................................................. 37
2.3.3 Analysis of other primary financial ratios of Petrolimex Co., Ltd in the period 20172019 .......................................................................................................................................... 45

2.3.4 Analysis of the results of investment in the construction of technical materials of
Petrolimex Chemical Co., Ltd in the period 2017-2019 ........................................................... 49
2.3.5 Classification of salary and income of officers and employees of Petrolimex
Chemicals Co., Ltd in the period 2017-2019 ............................................................................ 52
2.4. Analysis of the criteria for evaluating the business performance of Petrolimex
Chemical Company Limited from 2017 to 2019 ...................................................................... 55
2.4.1 Evaluate the effectiveness of profitability ....................................................................... 55
2.4.2 Evaluate the efficiency of using assets ............................................................................ 56
2.4.3 Evaluate the efficiency of capital use .............................................................................. 58
2.4.4 Evaluate the efficiency of cost use .................................................................................. 59
2.4.5 Evaluation of the efficiency of labor use ......................................................................... 60


CHAPTER III: SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE
OF PETROLIMEX CHEMICALS COMPANY LIMITED .............................................. 62
3.1. Development orientation of Petrolimex Chemicals Co., Ltd in the future ........................ 62
3.1.1. The main goals of the company ...................................................................................... 62
3.1.2. Medium and long term development strategy ................................................................ 62
3.2. Several solutions to improve the business performance of Petrolimex Chemicals Co.,
Ltd. ............................................................................................................................................ 63
3.2.1 Solution to increase revenue. ........................................................................................... 63
3.2.2. The solution to increasing cost-efficiency. ..................................................................... 66
3.2.3. The solution to increasing the efficiency of labor use. ................................................... 68
3.2.4. The solution to increasing the efficiency of capital use .................................................. 69
3.2.5. Solution on risk management. ........................................................................................ 72
3.3. Some recommendations for effective implementation of the above solutions .................. 73
CONCLUSION ....................................................................................................................... 74
LIST OF REFERENCES ....................................................................................................... 76
APPENDIX 1 ............................................................................................................................. 1
APPENDIX 2 ........................................................................................................................... 18

LIST OF ABBREVIATIONS

BH
BHXH
BHYT
BQ
CNHC
CP
CPSX
CSVCKT
DMHC
DT
ĐTXD
GTGT
GTTSL
HĐ
HĐQT
HĐSXKD
KDHC
KPCĐ
LN
NCC
NLĐ
QLDN
SSL
SSX
SXKD
TCKT

TĐLC
TNDN
TNHH
TSCĐ
TSLĐ
XDCT

Sales
Social insurance
Health Insurance
Average
Chemicals branch
Cost
Production expense
Technical facilities
Chemical solvents
Revenue
Construction investment
Added value
Value of total output
Work
Administrative Council
Production and business activities
Chemicals business
Union funds
Profit
Supplier
Workers
Business management
Profitability

Productivity
Manufacturing business
Accounting financial
Rotation speed
Corporate income
Limited
Fixed assets
Liquid assets
Building construction


LIST OF TABLES, CHARTS, AND DIAGRAMS

LIST OF TABLES
Table 2. 1: Output structure of the company's key business items from 2017 to 2019 ............ 30
Table 2. 2: Summary of business performance of Petrolimex Chemical Company Limited
in the period of 2017 - 2019...................................................................................................... 32
Table 2. 3: The Company's assets and capital sources in the period 2016-2019 ...................... 38
Table 2. 6: Other primary financial ratios of the company in the period 2017-2019 ............... 46
Table 2. 9: Results of the company's construction of technical materials from 2017 to 2019 . 49
Table 2. 10: Salary and income of the company's officers and employees from 2017 to
2019 .......................................................................................................................................... 52
Table 2. 11: Indicators reflecting the profitability of the company from 2017 to 2019 ........... 55
Table 2. 12: Indicators for evaluating the efficiency of using assets of the company from
2017 to 2019 ............................................................................................................................. 56
Table 2. 13: Indicators for evaluating the efficiency of the company's capital use from 2017
- 2019 ........................................................................................................................................ 58
Table 2. 14: Indicators for evaluating the efficiency of cost management of the company
from 2017 to 2019..................................................................................................................... 59
Table 2. 15: Indicators for evaluating the efficiency of the company's labor use from 2017

to 2019 ...................................................................................................................................... 60
Table 3. 1: Plan for the year 2021-2025 of Petrolimex Chemical Company Limited .............. 62

LIST OF CHARTS
Chart 2. 1: Sales structure of essential business products of the company from 2017 to
2019 .......................................................................................................................................... 31
Chart 2. 2: Indicators reflecting the profitability of the company from 2017 to 2019 ............. 56
Chart 2. 3: Indicators for evaluating the efficiency of using assets of the company from 2017 to
2019 ........................................................................................................................................... 58
Chart 2. 4: Indicators for evaluating the efficiency of the company's capital use from 2017
to 2019 ...................................................................................................................................... 59
Chart 2. 5: Indicators for evaluating the efficiency of cost management of the company
from 2017 to 2019..................................................................................................................... 60


Chart 2. 6: Indicators for evaluating the efficiency of using the labor of the company for
the period 2017 to 2019 ............................................................................................................ 61

LIST OF DIAGRAMS
Diagram 2. 1: Organizational chart of Petrolimex Chemical Company Limited ..................... 27
Diagram 2. 2: Organizational chart of the Chemical Business Department ............................. 27
Diagram 2. 3: Sales process of Petrolimex Chemical Company Limited .................................. 2
Diagram 2. 4: Domestic purchase process of Petrolimex Chemical Company Limited ............ 7
Diagram 2. 5: The import process of Petrolimex Chemical Co., Ltd. ...................................... 11
Diagram 2. 6: The management process of suppliers and contractors of Petrolimex
Chemical Company Limited ..................................................................................................... 15


INTRODUCTION
1. The urgency of the topic

Today, globalization and international economic integration bring new business
opportunities. They also pose many challenges that threaten the development of Vietnam's
economy in general and businesses' survival. According to the World Bank, Vietnam is
one of the developing countries moving to a market-oriented economy with open economic
policies and strategies to participate in international economic integration. The
development of the market-oriented economy has a significant impact on Vietnam's
economy in general and enterprises in particular, which is even more profound in
international competitiveness to attract customers and scale up the business domestically
and internationally.
In a market-oriented economy, domestic enterprises must manage their production
and business activities effectively to maintain and grow in the market once there is no
government protection. It is always a challenge for entrepreneurs to frequently do market
research and find out the best way to thrive and generate profits. It involves expanding
business scale, improving employee's quality of life, applying advanced technology,
allocating resources efficiently, and promoting international integration. These all set the
foundation for sustainable development, which is crucial for a business to maintain and
grow. Solvents and industrial chemicals play a significant role in the economy as the price
of solvents and industrial chemicals significantly impacts many other goods' input prices.
They are mostly determined by the law of supply and demand in the market. The cost of
solvents and industrial chemicals also depends heavily on the oil price on the world
market. The solvent and industrial chemical businesses are completely proactive in
deciding their business outcomes, not regulated to the government's selling prices like
petroleum businesses.
For enterprises operating in the solvent and industrial chemical business, they must
show their pioneering role in integrating into the platform, which is continuously changing
within the regions and worldwide. In that context, Petrolimex Chemical Co., Ltd. has
quickly seized the opportunity, renovated its organizational structure and operation.
Thereby, the company can proliferate, make significant contributions to the chemical
business, industrial solvents in particular, and the national economy. To make this happen,
measures that help to improve business performance are essential at this time. Facing many

difficulties and challenges, improving business performance is vital, which is always the
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company's top priority. It is a fundamental goal for the existence and development of the
company. Therefore, the company strives to research and adjust its operation direction,
promote product consumption, effectively use production factors, and study the influence,
the level, and the tendency of each factor. Recognizing the importance of improving the
performance of production and business activities for each enterprise, the author chose the
topic "Improving business performance at Petrolimex Chemicals Limited Company" as the
dissertation theme.
2. The research objectives of the topic
The goal of the topic is to:
- Systematize the theoretical basis of business performance in general.
- Analyzing and assessing the current status of the business performance of
Petrolimex Chemical Co., Ltd. from 2017 to 2019. From there, find out the existing aspects
that affect the business performance of Petrolimex Chemical Co., Ltd.
- Proposing some solutions to improve the business performance of Petrolimex
Chemical Co., Ltd. in the future.
3. Object and scope of the study
- The object of study: issues related to the business performance of Petrolimex
Chemical Company Limited.
- Research scope:
+ Regarding the content: Analyze and evaluate the business performance of
Petrolimex Chemical Co., Ltd from 2017 to 2019, point out the weaknesses, opportunities,
and challenges of the company in the period 2017-2019; now, propose some solutions to
improve the business performance of Petrolimex Chemical Company Limited.
+ About space: Thesis researching business performance at Petrolimex Chemical
Company Limited.
+ About time: Evaluate the business performance of Petrolimex Chemical Co., Ltd.

in the period 2017-2019, propose orientation and solutions for development in the period
of 2021-2025.
4. Research question
The research of the topic aims to answer the following in-depth questions:
- How was the business performance of Petrolimex Chemical Co., Ltd. in the
period 2017-2019?
- What are the shortcomings in the chemical business, industrial solvents of
Petrolimex Chemical Co., Ltd. over the past years?
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- What solutions to adopt to contribute to improving the business performance at
Petrolimex Chemical Co., Ltd?
5. Research methods
5.1. Data collection methods
The thesis surveys the current status of Petrolimex Chemical Co., Ltd. from 2017 to 2019.
❖ Data source
Data used in the thesis is mainly secondary data, including:
- Decrees, Decisions, Circulars of the Government, ministries, departments, and
branches related to the operation of enterprises in general, industrial chemicals and
solvents businesses in particular;
- Scientific works and domestic and foreign research works related to the business
performance of the enterprise;
- Other documents related to natural conditions such as geographical location,
population distribution, infrastructure, business environment, etc. in the study area;
- The data related to the research process of the topic has been officially
announced. The data includes: relevant research results that have been conducted
previously, data related to the business activities of companies in the industrial chemical
and solvent trading sector;
- Financial reports and reports on business strategies, tasks, and development

projects of Petrolimex Chemical Co., Ltd. in 2017-2019.
❖ Methods of data collection
Methods of collecting secondary data are done through the following ways:
- Study, search by keywords, inherit datasets of previous studies from Statistical
Yearbook sources, Ministry of Finance, Ministry of Planning and Investment, Ministry of
Labor - Invalids - Social Affairs, books, magazines such as Economic development
magazine, banking magazine, Finance magazine, Research and exchange magazine, and
other journals; Dataset of previous studies related to the topic; legal documents about
business performance such as Decrees, Circulars, Decisions, etc. of the Government and
relevant agencies.
- Direct observation method: through observing the production and business
operation at Petrolimex Chemical Company Limited.

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5.2. Data analysis method
The thesis uses some information analysis methods to evaluate the business
performance of Petrolimex Chemical Co., Ltd. from 2017 to 2019 as follows:
❖ Statistical analysis method
- Statistical analysis synthesizes a specific nature of socio-economic phenomena
and processes in certain historical conditions through numerical manifestations. In
particular, statistical analysis determines the variation's level, expressing the unique
relationship's nature and level. Statistical analysis must take statistics as a document, using
statistical methods as a research tool.
- Statistical analysis is of great importance in the economic management process.
Thanks to rich theory and methodology, statistics can map out the causes of the completion
of the plan and the management decisions; analyze the effects of factors on resource use,
and determine the relationships and the general rule of the system.
In statistical analysis, the system requires an approach in both directions: analysis

and synthesis.
❖ Method of comparison
- A method of considering an analytical indicator based on the comparison with a
baseline (first indicator). It is the most commonly used method to analyze business
activities and analyze and forecast socio-economic indicators in the macroeconomic field.
This method compares the data over time with each type of chemical products, solvents,
and different market segmentation) to determine the trends and fluctuations of analytical
indicators. It helps to synthesize documents, calculate the correct criteria, and help the
document analysis be scientific, objective, and adequately reflect the critical content
research.
- After synthesizing the data, we compare data between years, thus making
comments and evaluations through the results of synthesis and calculation of data on the
business performance of industrial chemicals and solvents at Petrolimex Chemical Co.,
Ltd. in the period 2017-2019. The dissertation using the specific comparison method is:
- Absolute numerical method: The difference between two criteria: analysis period
and primary indicator.
Comparative numerical method: A percentage of the analysis period index
compared to the first indicator shows the completion level or the absolute difference rate
compared to the first criterion to know the growth rate.
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The comparison method allows us to accurately assess the growth or decline of the
indicators representing the company's business performance, thus making comments on the
business's right and wrong sides at Petrolimex Chemical Company Limited.
6. The significance of the topic
Improving business performance has been mentioned in many previous studies by
domestic and foreign authors. For example, in his research, the author Truong Thanh Tu
(2010) has researched and proposed some solutions to improve service business
performance on VNPT Hanoi's fixed telephone network. The author focuses on providing

solutions to improve business performance on a fixed-line fixed network, to keep existing
customers, attract new customers, and increase revenue for service providers. All these
solutions aim to improve business performance for the unit. [1] The author Vo Viet
Chuong (2015) again focused on improving the business performance of the Joint Stock
Commercial Bank for Investment and Development of Vietnam - Ha Tinh Branch. The
author of Chuong also focuses on providing solutions to develop the network and improve
Marketing activities, diversify and improve the quality of products and services, improve
credit quality to reduce risks, contribute to the increased signal. Business results for
businesses. [2] Recently, the author Doan Thi Nhat Hong (2014) offers some solutions to
improve the business performance of SIMCO Song Da Joint Stock Company. The author
proposes that the Song Da Joint Stock Company should complete the capital structure, and
use reasonable costs, improve the qualifications and capacity of human resources, improve
the quality of equipment - technology all contribute. part to improve the performance of
the unit in the future. [3] The author Le Thi Hoa (2016) again studies the problem of
improving the performance of production and business at Tam Chien Company Limited.
The author believes that the application of cost-effective, reasonable and efficient use of
input factors and the survey to expand the market, boost consumption will help the
Company to be more successful in the future. It is also a factor that helps increase the
business performance of the Company. [4]
In general, the above studies have achieved certain results such as providing a
theoretical system for the field they researched, analyzing the current situation of use,
administration, and business performance at the unit and enterprise. Many solutions to
improve the performance of using human resources for their units/businesses. Solution
groups focus on improving cost management, saving input costs, increasing revenue ...
At Petrolimex Chemical Co., Ltd., in recent years, there have been some researches
on enterprises, but these studies focus on market expansion or analysis to offer solutions to
5


improve business performance. In the coming time, there is no research to analyze the

current situation and propose solutions to improve business performance for the unit.
Therefore, the author has chosen this study with the desire to make a small contribution to
the Company by analyzing and offering some solutions to improve business performance
for Petrolimex Chemical Co., Ltd. shortly.
In terms of science: The topic has systematized a relatively complete theoretical
basis of business performance in the enterprise. In practical terms: The issue has been
analyzed in-depth, assessed the current status of the company which is the production and
business performance in the period 2017-2019, from which proposed appropriate and
highly feasible measures improve the performance of the production process and business
activities of the company in the coming years.
7. Structure of the topic
In addition to the introduction and conclusion, the thesis includes three chapters:
Chapter I: THEORETICAL BASIS OF BUSINESS PERFORMANCE
Chapter II: BUSINESS PERFORMANCE ANALYSIS OF PETROLIMEX
CHEMICAL COMPANY LIMITED
Chapter III: SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE OF
PETROLIMEX CHEMICAL COMPANY LTD.
Due to the limitations of time, capacity, and qualifications, this thesis still has room
for improvement. We hope that the instructor's suggestions will help to improve the topic.

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CHAPTER I: THEORETICAL BASIS OF BUSINESS PERFORMANCE
To survive and grow, a business, whether large, medium, or small, operating in any
field, must be run effectively. To know the current status of business operations, analyzing
business performance plays a crucial part. It helps the enterprise leaders to run the business
better based on analyzed data.
1.1. Overview of business performance
In a market-oriented economy, the overarching and long-term goal of every

business enterprise is to maximize profits. To achieve the goal, it must develop an effective
strategy in each phase, adapt to the changing business environment, allocate and manage
resources effectively and always check to see if the business is making any progress.
1.1.1. The concept of business performance
Business performance is an economic category associated with a market
mechanism related to all production and business processes such as labor, capital,
machinery, and raw materials.
An enterprise can only achieve high performance when using the essential elements
of the business process effectively. When referring to business performance, economists
consider different aspects in order to give different definitions
For businesses to achieve their goals, it is necessary to pay attention to internal
conditions, promote production factors' sufficient capacity, and minimize the costs. The
requirement of improving business performance is to use reasonable inputs to achieve
maximum results with minimum costs. However, to understand the nature of efficiency, it
is also necessary to distinguish efficiency from production and business activities. We can
draw the efficiency concept as follows: "Efficiency is the comparison of outputs and
factors of input resources" [according to Nguyen Ngoc Lan - the topic of economic
performance]. That comparison can be a relative comparison and an absolute comparison.
Outputs are often expressed in terms of value, revenue, and profit. The resource input
factors are labor, cost, assets, and capital. Besides, it is also said that "Business
performance is an economic category in depth, reflecting the level of resource exploitation
and costs. Resources in the process of reproduction to achieve business goals "[according
to Do Huu Tung - textbook of financial management]. Today's business performance
becomes more critical for economic growth and is the basis for assessing its economic
goals in each period. The absolute efficiency is determined as follows:
A=K-C
The relative efficiency index is determined as follows:
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A = K/C
Inside:
• A: Business performance
• K: Business results (by the following criteria: Total value, Total revenue, profit)
• C: Input resources (including Labor, cost, capital, equipment)
1.1.2. Distinguish between business performance and results
From the above concepts, we can understand that business performance is an
economic category that reflects using resources (equipment, machinery, fuel, and capital)
to achieve the business's goal.
Business performance reflects the organizational structure and is determined by the
results' ratio and its cost to achieve that result. It is an increasingly important measure of
economic growth and a basis for assessing the implementation of enterprises' production
and business goals in each period. The better the business performance, the more
conditions to expand and develop investment in machinery and equipment procurement,
improve workers' lives, and fulfill all obligations to the government. Besides, we need to
distinguish the difference and the relationship between business performance and business
results. The production and business activities are absolute numbers that reflect the
enterprise's output scale and business activities after each period. In the process of
production, it is necessary to achieve the goal being set earlier. The results are represented
by some quantitative indicators such as sales, revenue, profit, and qualitative indicators
such as reputation, product quality.
In terms of effectiveness, the results are different. The business results reflect the
remaining significant scale that demonstrates the comparison between expenditures and
revenues. Business results are measures of the product and operational performance of a
business. Results demonstrate the quality and value of products and services that lead to
customer satisfaction and customer engagement. The results only show that the scale
achieved is large or small and does not reflect the quality of production and business
activities. Products come after efficiency. Results are used to calculate and analyze
performance in each business cycle. Therefore, results and effects are two different but
closely related concepts.

1.1.3. The persuasive nature of business operations
In general, economic performance is the category reflecting management skills,
ensuring high results on socio-economic tasks set out at the smallest cost.

8


The economic category is understood from qualitative and quantitative
perspectives. Quantitative: The economic performance of performing each socio-economic
task shows the correlation between the results obtained and its cost. If considering the
synthesis, people can only get economic performance when the result is more remarkable
than the cost spent; the more significant the difference, the higher the performance. In
terms of qualitative results: The level of economic performance obtained reflects
production and business management ability.
The two qualitative and quantitative aspects of business performance are not
separated.
Economic performance is not consistent with economic results. Economic
performance is the category of comparison, expressing the concern between the give-out
and the gain. The result is only a necessary factor to analyze and evaluate the efficiency
itself. The results have not shown how much it is created and at what cost, which means
the results have not shown the quality of creation outward. The essence of economic
performance is to show economic development goals and production and business
activities to satisfy the market's needs better. Efficiency refers to the degree of satisfaction,
demanding the selection and use of limited resources; that is to say, the economic results
satisfy the need.
Another effective indicator is KPI: A performance indicator or key performance
indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an
organization or of a particular activity (such as projects, programs, products and other
initiatives) in which it engages. Often success is simply the repeated, periodic achievement
of some levels of operational goal (e.g. zero defects, 10/10 customer satisfaction), and

sometimes success is defined in terms of making progress toward strategic goals.
Accordingly, choosing the right KPIs relies upon a good understanding of what is
important to the organization. What is deemed important often depends on the department
measuring the performance – e.g. the KPIs useful to finance will differ from the KPIs
assigned to sales.
In summary, improving the economic performance of social production and all
other production and business activities is the most basic requirement of development
goals.

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1.1.4. Classification of business performance
Performance is a broad aggregate category. When approaching, analyzing, and
evaluating this indicator, it is necessary to know the diversity of efficiency indicators and
efficiency indicators classification according to the bases.
Performance indicators differ from business drivers and aims (or goals). A school
might consider the failure rate of its students as a key performance indicator which might
help the school understand its position in the educational community, whereas a business
might consider the percentage of income from returning customers as a potential KPI.
The key stages in identifying KPIs are:
•Having a pre-defined business process (BP).
•Having requirements for the BPs.
•Having a quantitative/qualitative measurement of the results and comparison with set
goals.
•Investigating variances and tweaking processes or resources to achieve short-term goals.
Key performance indicators (KPIs) are ways to periodically assess the
performances of organizations, business units, and their division, departments and
employees. Accordingly, KPIs are most commonly defined in a way that is understandable,
meaningful, and measurable. They are rarely defined in such a way that their fulfillment

would be hampered by factors seen as non-controllable by the organizations or individuals
responsible. Such KPIs are usually ignored by organizations.
KPIs should follow the SMART criteria. This means the measure has a Specific
purpose for the business, it is Measurable to really get a value of the KPI, the defined
norms have to be Achievable, the improvement of a KPI has to be Relevant to the success
of the organization, and finally it must be Time phased, which means the value or
outcomes are shown for a predefined and relevant period.
In order to be evaluated, KPIs are linked to target values, so that the value of the
measure can be assessed as meeting expectations or not.
For the business performance of an enterprise, it is divided into:
• General business performance
• Division business performance.
General business performance provides an overview of the business. It shows the
business performance of an enterprise's entire production and business process (or a
division of the business) in a time.

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A division's business performance refers to the performance of each specific field
of activity of the enterprise (using each type of asset, raw materials, primary business
activity, a joint venture). It reflects performance in each specific area, not the whole
business.
The business performance of an enterprise is also divided according to the criteria of time:
• Short-term business performance.
• Long-term business performance.
Short-term business performance is the business performance reviewed and
assessed in a short time, such as weeks, months, quarters, years, and several years.
Long-term business performance is the business performance that is considered
over a long time in association with long-term strategies and plans. Long or short term

business performance is sometimes concerned with the development and progress of the
business.
There is a dialectic relationship between long-term and short-term business
performance, and in some cases, they contradict each other. Sometimes, to reach long-term
goals, enterprises can give up the short-term goals, for example, considering worldrenowned retail groups that have entered the Vietnamese market like METRO (Cash &
Carry) and BIG C (Big Coral).
1.1.5. The Necessity and Meaning of Improving Business Operations.
Objective necessity: In the conditions of production and business under the market
mechanism, each business has to create profits to survive and develop to achieve the
highest production and trade; companies need to determine the targets and investment
orientation and strategies. It is necessary to understand the influence factors, the level, and
trend of each factor contributing to business performance. It can be done only based on
business analysis. In imperialism, the primary accumulation led to the proliferation of
production; the production companies multiplied in both size and efficiency, with the
fierce competition. To win this competition, an enterprise needs to ensure sound
management of its activities to create an effective business solution as the capitalist
receives high quality and accuracy from many sources. The accounting work cannot meet
this requirement, so it is necessary to have an independent economic analysis science with
rich research methods. With significant economic development and high-tech
achievements, practical analysis is more critical in the business management process
because it helps managers find the most effective business plan for the economy, society,
and environment.
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The context of a market-oriented economy requires businesses to apply for
scientific advances, upgrade operating systems, improve the production process, and
business management to ensure productivity and performance.
In conclusion, analyzing the performance of production and business activities
helps managers to make decisions, propose feasible plans to improve business

performance, and utilize all the resources such as and capital, labor, land, and so on; the
meaning of improving business performance:
For the national economy: business performance is an essential economic category,
reflecting the requirement of a time-saving rule that reflects resource use, production level,
and return level. It is production relations in the market mechanism. The production force's
development level is higher and higher, production relations are more and more perfect,
and performance is improved. The business performance brings the nation the distribution
and use of resources more and more appropriately and brings high performance.
For the business itself: Business performance in absolute terms is the profit earned.
It is the basis for expanding reproductions, improving the lives of employees. For each
enterprise, especially businesses operating in the market mechanism, improving business
operations' performance plays an essential role in enterprises' existence and development.
Also, it helps businesses compete in the market, invest, expand, renovate, and modernize
technical facilities for production and business.
For employees: Business performance is the driving force that stimulates
employees to be enthusiastic about production, always paying attention to their labor
results.
Improving business activities' efficiency means improving working life, promoting
productivity, and improving business performance.
1.2. Content and consumption indicators in business performance analysis.
For a general assessment of business performance, people often use the profitability
indicator. These indicators reflect the profitability of the business. Besides, many other
indicators are used to reflect the efficiency of the use of enterprise inputs.
1.2.1. Content analysis of business results.
Analysis of business results helps enterprises fully identify the causes affecting the
business process and results [according to Pham Van Duoc - analyzing business activities].
Since then, they are making business decisions efficiently. Including Business performance
analysis; Analyze business results; Analysis of production cost fluctuations; Analysis of
corporate financial statements; Revenue volatility analysis.
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1.2.1.1. The criteria for analyzing business results.
The ratio of profit and net revenue:
The ratio of revenue/net revenue = Profit (before tax, after-tax)/Net revenue
This coefficient shows how much profit the enterprise gets (before tax, after-tax)
from one dong of revenue.
Revenue indicator analysis:
Purpose: To see which underlying trend in revenue fluctuates, allows observing the
fluctuations of revenue, specifically, the absolute number of increase (decrease), the
absolute rate of increase (decrease), the value of increase or decrease.
Profit indicator analysis:
Purpose: Analyzing the volatility of profit over time to evaluate the increase and
decrease of profit and determine each factor's impact on profit.
1.2.1.2. Methods of determining results
Business results = Σ revenue - Σ cost
- Revenue target: The enterprise's revenue in the consideration period (usually a
year) is the total value of goods and services that the enterprise has sold during that period
and issued the sale invoice).
Turnover = Σ sale price x Quantity of goods sold
- Revenue targets:
Revenue is divided into three categories:
With the VAT-inclusive sale price, the turnover is called VAT-inclusive turnover.
With the VAT-exclusive selling price, the revenue is called the VAT-exclusive
revenue.
Revenue without tax due to deduction of related items such as sales discounts,
discounts, returns is called net revenue.
Cost:
The enterprise's cost can be understood as all the costs of living labor,
animalization, and other necessary costs that the enterprise must spend in production and

business manifest. It is in cash and charged for a certain period. Thus, the nature of the
business's production cost is always determined as the material costs (waste) and must be
associated with the business purpose. Operating expenses of enterprises include: Expenses
of normal business activities include (business costs and financial costs); other operating
expenses. Based on the ability to induce costs and the object of costs, classify them into
direct and indirect costs.
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According to the relationship between the technological process that produces the
product and the business process, the cost is an essential cost and a non-basic cost.
According to the relationship with the activity level, costs are classified: variable and
variable costs. Thus: production and business costs have a direct impact on the business
results of enterprises. If costs increase, the result is reduced, costs decrease, the results
increase, so enterprises always pay attention to reducing costs and classifying costs to get
the best business results.
- Profit target: Business profit is an indicator reflecting the surplus-value or the
level of business performance that the enterprise gains.
Business profit = Σ revenue - Σ cost
Business profits include Profits earned from the results of production and business
activities, profits earned from financial results, other profits.
Calculation method:
Gross profit = Net revenue - Total cost of goods sold
Profit before tax = Gross profit - Total cost of insurance and administration
1.2.2. Overall effect
1.2.2.1. Efficient use of total assets
The production capacity of total assets:
SSXTS = Net revenue/Average total assets
This target shows how many VND of net revenue of the assets spent on business in
the period.

Return on assets (ROA):
SSLTS = Return/Average Total Assets = ROA
This target shows how much profit is earned for every 1 dong of assets spent on
business in the period.
1.2.2.2. Efficient use of equity. The productivity of equity capital
SSXVCSH = Net revenue/Average equity = ROE
This target shows how much revenue is generated for every 1 dong of equity
invested in the business.
Return on equity (ROE):
SSLVCSH = Return after-tax/Average equity = ROE
This target shows how many dong of profit for every 1 dong of equity invested in
the business.

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1.2.2.3. Effective use of costs
The production capacity of cost:
SSXCP = Net revenue/Total cost
This target shows how many dong of revenue for every 1 dong of expenses spent in
the period.
Cost profitability:
SSLCP = Profit/Total cost
This target reflects how many VND of profit for every 1 dong of expenses spent in
the period.
1.3. Evaluate the efficiency of input resources.
1.3.1. Effective use of Labor
Average labor productivity:
SSXLĐ = Total revenue/Average total number of employees
This target shows how much revenue per employee generated during the period. It

reflects fair Labor in the course of doing business.
The profitability of Labor:
SSLLĐ = Total profit/Average total number of employees
This target shows how much profit one employee can create in a period.
1.3.2. Effective use of fixed assets
The production capacity of fixed assets:
SSXTSCĐ = Average net revenue/fixed assets
This target shows how much net revenue is earned for every 1 dong of fixed assets
spent on business in the period.
The profitability of fixed assets:
SSLTSCĐ = Average profit/fixed assets
This target shows how much profit is earned for every 1 dong of fixed assets spent
in business in the period.
1.3.3. Effective use of liquid assets
The production capacity of liquid assets:
SSXTSLĐ = Net revenue/Average working assets
This indicator shows how many dong of net revenue for every 1 dong of working
asset spent in business in the period.
The profitability of liquid assets:
SSLTSLĐ = Average profit/liquid assets
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