Analyzing the financial situation at quang trung industrial group co , ltd for the period of 2017 2019

OVERVIEW OF THE RESEARCH PROJECT
1.Origin Of the study
In the current market economy, constantly innovating and increasingly
fierce competition among businesses, so sustainable development and
profitable business are a practical target for any business sector. Come on.
To achieve that, the enterprise must regularly conduct financial analysis to
clearly see the current state of financial activity, business performance of
the enterprise as well as fully identify the cause and level of image
impact. The influence of factors to help managers come up with effective
solutions and accurate decisions to improve the business and production
efficiency of enterprises.
Recognizing the importance of analyzing the financial situation of
businesses, I chose the graduation thesis topic: ―Analyzing the financial
situation at Quang Trung Industrial Group Co., Ltd. for the period of
2017- 2019 ‖
2. Objective of the Study
The topic focuses on analyzing the financial situation of the company to
see the financial situation at the company, thereby offering solutions and
proposals with the following specific objectives:
- Overall assessment of the financial situation
- Analyzing financial structure and capital guarantee situation for
business activities
- Analyzing the situation and solvency of the company
- Analyzing business efficiency
- Analysis of financial ratios through the financial statements of
the company
- Analyzing the efficiency of capital use, profitability of capital sources


3. Scope of the Study
The scope of study is the financial situation of the enterprise through financial

statements including balance sheet, income statement, cash flow statements and
financial statement footnotes for the period of 2017-2019.
4. Research Methodology of the study
- Data collection method: collect data through company reports and
documents
- Data processing method: the basic reason is mainly followed by specific
analysis of actual data through reports and documents of enterprises.
- Using analytical methods: comparison method, ratio method, Dupont
method to analyze data, synthesize variables over years
5. Structure of the study
The graduation thesis consists of 3 chapters:
Chapter 1: Literature review
Chapter 2: Financial statement analysis at Quang Trung Industry Group Joint
Stock Company in the period of 2017-2019
Chapter 3: Solutions to improve the financial situations of Quang Trung Industry
Group Joint Stock Company


Chapter 1: Literature review
1.1 Overview of financial statements
1.1.1 Definition of financial statements
According to the Institute of Certified Public Accountants (AICPA) :―
The financial statements are prepared for the periodic review or report on
the operation of the enterprise, the investment situation in the business
and the results achieved in the reporting period. The financial reporting
system reflects the combination of recorded events, accounting principles
and assessments that are primarily applicable to the recording of events.‖.
According to the Vietnamese accounting system, Financial statements are
types of accounting reports that generally and comprehensively reflect the
situation of assets, capital sources, the situation and results of production

and business activities of enterprises in a certain period. As such, financial
statements not only provide information primarily to entities outside the
business such as investors, tax authorities, banks and other financial
institutions, but also provide information. providing information to
corporate executives, helping them assess and analyze the financial
situation as well as business results of enterprises..
Within the scope of the thesis, the author uses the definition of financial
statements as follows: ―Financial statements are a system of statements
made according to the current accounting standards and regime reflecting
the most general information about the financial statements. Main
economic and financial news of the unit. Accordingly, the financial
statements contain the most comprehensive information on the situation of
assets, equity and liabilities as well as the financial situation, business
results in the period of the enterprise ‖.
1.1.2 Functions of financial statements
The system of financial statements of enterprises is made for the
following purposes:


- Summarizing and presenting in a general and comprehensive manner the
situation of assets, capital sources, debts, situation and results of business
operations of enterprises in an accounting period.
- Providing key economic and financial information for assessing the
situation and performance of the enterprise, assessing the financial status
of the enterprise in the past operating period and future forecasts.
Financial statements are important in the field of economic management,
attracting the attention of many objects inside and outside the enterprise.
Each subject cares about the financial statements on a different level, but
generally aims to get the information needed to make decisions that are
appropriate to their goals.

- For business managers, the financial statements provide general
information about the situation of assets, sources of asset formation as
well as the situation and results of business after an operation period, on
which Management will analyze, evaluate and propose timely
management solutions and decisions suitable for the future development
of the enterprise.
- With relevant state agencies such as finance, auditing bank, tax ...
Financial statements are important documents in checking, supervising,
guiding and advising enterprises to implement policies, economic and
financial regimes of enterprises.
- For investors, lenders financial statements help them identify their
financial capacity, the situation of the use of assets, capital, profitability,
efficiency of production and business activities. , level of risk ... for them
to consider, choose and make an appropriate decision.
- With suppliers, financial statements help them identify solvency,
payment methods, from which they decide to sell goods to businesses
again, or need to apply payment methods. for the reasonable.
- With customers, financial statements help them have information about
the ability, production capacity and product consumption, reputation level


of the business, customer treatment policies ... so they have right decision
in the purchase of the business.
- For shareholders, employees, they are interested in information about
the ability and policy to pay dividends, salaries, social insurance, and
other issues related to their interests shown on financial report.
1.1.3 Categories of financial statements
1.1.3.1 Balance sheet



Definition:

A balance sheet is a statement of the financial position of an enterprise
stating assets, liabilities and equity at a given time. In other words, the
balance sheet illustrates the net value of a business.
The balance sheet may also contain details from previous years for
comparison purposes. This data will help businesses track their
performance and will identify ways that companies can build their
finances and see where businesses need improvement. In essence, the
balance sheet is a general balance sheet between assets and equity and
liabilities.

 Function:
Balance sheet: Provides information about the situation of assets,
liabilities, sources of assets formation of the enterprise at a given period,
helping to assess the financial status of the business, such as fluctuations
in the size and structure of assets, sources of assets formation, solvency,
profit distribution. At the same time, it helps to evaluate the ability to
mobilize capital into the production and business process of the enterprise
in the coming time.
1.1.3.2 Income statement



Definition

The report on business results shows the movement of capital in the
production and business process of the enterprise. In addition, the report
on business results reflects revenue, income, expenses and business

results. Through this report, information users can assess business
performance of the business. Also know the scale of costs, revenues,
income and results of business activities as well as the net profit before
and after corporate income tax.



Function

Income statement: Providing information on business results of the
enterprise in the period, providing information on the fulfillment of
obligations to the State budget. From the analysis of the data on the
analysis of business results, the enterprise can control potential changes in
future economic resources, assess the profitability of the business, or cost
effectiveness of additional resources that businesses can implement.
1.1.3.3 Cashflow statement



Definition

A cash flow statement is one of four mandatory financial statements that
an enterprise must prepare to provide its users with information about the
enterprise. The statement of cash flows reflects issues related to the source
of cash in and out in the enterprise, the situation of short-term revenue and
expenditure of the enterprise. Sources of cash in and out of businesses and
amounts considered as cash are divided into three groups: cash flows from
investing activities, cash flows from financial activities and cash flows

from operating activities.

 Function
Cash flow statement: Provides information on financial fluctuations in the
enterprise, helps to analyze the investment, financial and business
activities of the enterprise, to assess the ability to generate money and
cash equivalents in the future, as well as the use of these sources of money
for business activities, financial investment of enterprises.
1.1.3.4 Notes



Definition


Notes to the financial statements are also an annual financial report that
must be prepared for an enterprise. Notes to the financial statements are
also used to explain and add to the criteria that other financial
statements have not shown or explained complicated items.



Function

Provide more detailed information about the characteristics and general
situation of the business; about the income of the employee; on the causes
of increase or decrease of fixed assets (according to their original prices,
their remaining values); on the increase and decrease of capital sources,
enterprise funds; contingent liabilities, commitments and other financial
information, which helps in a specific analysis of some indicators,

reflecting the financial position that other financial statements cannot
present.
1.2 Overview of financial statements analysis
1.2.1 Definition of financial statements analysis
Financial statement analysis is the process of reviewing, checking,
comparing and comparing financial data in the past business period.
Through data on the analysis of financial statements will provide users
with information that can assess the potential, business performance
as well as future financial risks of the business.
Analyze financial statements to provide useful information not only for
corporate governance but also to provide economic - financial information
mainly for non-business information users. Therefore, analyzing financial
statements does not only reflect the financial situation of the enterprise at a
given time, but also provides information on the results of production and
business activities of the enterprise in a given period.

1.2.2 Role of financial statements analysis
Analyzing the financial statements of an enterprise is an extremely
important job in corporate governance. It is not only meaningful to the
business itself, but also necessary for other management entities related to


the business. Analyzing the financial statements of enterprises will help
corporate governance overcome shortcomings, promote positive aspects
and predict the development of enterprises in the future. On that basis,
corporate governance has come up with effective solutions to select and
decide the optimal plan for production and business activities of the
enterprise.
The role of financial statement analysis is to provide sufficient
information to help business managers to see the vivid features on the

"financial picture" of the enterprise expressed through the following
aspects:
- Providing timely, complete and truthful financial information necessary
for business owners and investors, lenders, customers, suppliers ...
- Provide information on the situation of capital use, ability to raise
capital, profitability and production and business efficiency of the
business.
- Provide information on the situation of liabilities, the ability to recover
receivables, the solvency of payables as well as other factors affecting the
production and business activities of enterprises.
1.2.3 Process of financial statements analysis – EIC analysis
1.2.3.1 Economy analysis
Economic analysis is a process followed by experts to understand
important economic factors affecting the operation of an organization,
industry, region or any other specific population group, with The
purpose of making wiser decisions for the future.
In business, economic analysis allows incorporating factors from the
economic environment such as inflation, interest rates, exchange rates
and GDP growth into the company's plans. Each organization is an
open system that is impacted and influenced by the external context.
This means that proper evaluation of economic variables will facilitate


the identification of opportunities and threats that may affect the
performance of the company.
Organizations tend to implement business planning processes every
one or two years and often identify two or three possible economic
scenarios for short and medium term terms. They then assess how each
scenario will influence the company's decision and achieve its goals.
Economic analysis is also carried out when evaluating specific projects

to consider economic and financial feasibility.
Economic analysis helps business owners get a clear picture of the
current economic environment, as it relates to their company's ability
to thrive. Economists, statisticians and mathematicians often perform
this analysis on behalf of for-profit and not-for-profit businesses. These
types of economic assessments include an in-depth assessment of
market strengths and weaknesses. An economic analysis is not limited
to small or medium-sized businesses, it is also valuable to small
companies. In fact, small businesses may need to conduct economic
analysis more frequently than businesses with sufficient capital and
integrated resources to sustain the recession. There are several types of
economic evaluation methods that business owners can use to gain a
holistic view of how their companies will bid in the future.
1.2.3.2 Industry analysis
Industry analysis is done by business entities or, in particular, by an
entrepreneur to identify factors affecting the industry in which they
have or are thinking about investing.
New entrants, the status of competitors, and both buyers and suppliers
have a direct impact on the performance of an industry. It is the
concept of industry analysis that provides business entities with the
information they need to plan their business effectively.


Remember, it is important to have a certain perspective on the work
forces in the overall diagram of everything if you want to conduct a
comprehensive strategic planning.
Industry analysis helps owners know about the various opportunities
and threats facing businesses so they can take steps to combat them
and gain a competitive advantage.
Understanding the industry's surroundings and the factors affecting

them helps business executives predict future trends.
1.2.3.3 Company analysis
Company analysis is a process that includes analysis of the company's financial
situation, products, services, and competitive strategy (the company's plan to
deal with threats and environmental opportunities,. external field given).
Company analysis takes place after the analyst understands the company's
external environment and includes answering questions about how the company
will respond to threats and opportunities posed by the external environment. .
The intended response is the individual company's competitive strategy.
Analysts should seek to determine whether the strategy is primarily defensive or
offensive in its nature and how the company intends to implement it.
1.2.4 Financial statements analysis methods
1.2.4.1 Common-Size Analysis
Longitudinal analysis is a method of evaluating financial information
by presenting each item in the financial statements as a percentage of
the principal amount over the same period. A company can use this
analysis on its balance sheet or income statement.
Common size amount = (Analysis amount / Base amount) x 100%
The base amount will vary depending on whether the company is
completing analysis on its balance sheet or income statement. If the
company completes the analysis on the balance sheet, then the
principal amount will be the total assets or total liabilities and equity


(or shareholders). If income statements are used, the principal
amount will be net sales.
1.2.4.2 Horizontal Analysis
Horizontal analysis (also called trend analysis) is a financial statement
analysis technique that shows changes in the number of corresponding
financial statement items over a period of time. It is a useful tool to

assess the financial trends of a company
Reports for two or more phases are used in the horizontal analysis.
The earliest period is often used as the base period and the items on
the report for all subsequent periods are compared with the entries on
the base period report. Changes are usually displayed both in money
and in percentages.
1.2.4.3 Ratio Analysis
Ratio analysis is a popular financial analysis tool. Ratio analysis helps
analysts compare different aspects of financial statements in one
enterprise with other businesses in the same industry to review business
performance and find out the development trend of the business. Besides,
the index analysis also helps investors and creditors check the financial
status and liquidity of the company



Short-term solvency or liquidity ratios

The solvency of an enterprise reflects the financial capacity of an
enterprise to meet the need to pay debts to individuals or organizations
related to the loan or debt of the enterprise. Financial capacity exists in
the form of currency (cash, deposits ...), accounts receivable from
indebted individuals, assets that can be quickly converted into cash
such as: goods, finished goods, consignment. Debts of the enterprise
may be short-term bank loans, debt due to goods originating from the
sale and purchase of inputs or products that the enterprise must pay to
the seller or the buyer. before, taxes not yet paid to the State Bank,


unpaid amounts. The solvency of the business only focuses on

paying the debt that the business needs to pay in the year. Therefore,
enterprises must use all assets under their management and use to
pay due debts.
- Current ratio

Current ratio is an index measuring the ability of businesses to meet shortterm financial obligations. In general, this index at 2-3 is considered good.
The lower the index, the more difficult or insolvent a business is, but a too
high current payment index is not always a good sign, because it shows
that the company's assets are tied up. too much ―working assets‖ and thus
the efficiency in using assets of the enterprise is not effective.
- Quick ratio

Quick ratio is a measure of higher liquidity. Only highly liquid assets are
included in the calculation. Inventories and other short-term assets are
spent because when they need money to pay off debt, their liquidity is
very low.
- Cash ratio

Cash ratio shows how much cash and cash equivalents the company
has to meet its short-term debt obligations. This index usually ranges
from 0.5 to 1. However, to determine whether the cash solvency of
the business is high or low, it is necessary to consider the nature and
business conditions of the business. But if this coefficient is too
small, it is certain that enterprises will have difficulty in paying


debts
In fact, only a few businesses have cash reserves and cash
equivalents that are sufficient to cover all short-term debts, so the
cash ratio is usually quite low, only greater than or equal to 1. If an

enterprise holds enough cash and cash equivalents to pay off its
short-term debts, it proves that it has not effectively taken advantage
of this highly liquid asset.



Long-term solvency or financial leverage ratios

Long-term solvency is the ability of a company to meet its debt and financial
obligations. Long-term solvency is necessary to maintain business operations as
it demonstrates the ability of the company to continue operations in the near
future.
Long-term solvency is directly related to the ability of an individual or business
to pay their long-term debt, including any related interest. To be considered as a
long-term solvency, the value of the assets of a company or an individual must
be greater than their total liabilities.
- Debt to assets ratio:

The debt to assets ratio is a leverage ratio that measures the total amount of
assets financed by creditors instead of investors. In other words, it shows
the percentage of assets financed by borrowing compared to the percentage
of resources financed by investors.
Basically, it illustrates how a company has grown and acquired its assets over
time. Companies can create investor interests to obtain capital, make profits to
obtain their own assets or receive debt. Obviously, the first two are preferred in
most cases.


This is an important measurement because it shows how the company has taken
advantage of by considering how much the company's resources are owned by

shareholders in the form of equity and creditors in the form of debt. Both
investors and creditors use this number to make decisions about the company.
Investors use this ratio not only to assess whether the company has enough
money to meet current debt obligations and to evaluate whether the company
can pay back their investment.
This low ratio proves that the autonomy of enterprises is high. However, this
low index also implies that enterprises have not taken advantage of capital
mobilization channel by debt, which means they have not declared well
financial leverage.
This ratio is often rated high or low in correlation with good industry
practice and industry peers.
- Debt to equity ratio

The ratio of total debt to equity is an indicator that reflects the financial size of
the company. It tells us about the ratio of the two basic sources of capital (debt
and equity) that businesses use to pay for their operations. These two sources of
capital have unique characteristics and the relationship between them is widely
used to assess the financial situation of an enterprise.
The ratio of total debt to equity is also highly dependent on the industry in which
the company operates. For example, when manufacturing industries require a lot
of capital, the ratio of debt to equity tends to be higher, while in service
companies, the ratio of debt to equity is often lower. The ratio of total debt to
equity gives investors an overview of the financial strength, financial structure of
the business, and how it can pay for its operations. Typically, if this coefficient is
greater than 1, it means that the assets of the business are financed


primarily by debt, whereas the assets of the business are mainly financed by
equity. In principle, the smaller this coefficient is, meaning that liabilities
account for a small proportion of total assets or total capital, less financial

difficulties for businesses. The greater this ratio, the greater is the possibility of
difficulty in paying debts or bankruptcy of the business. In fact, if the liabilities
account for too much compared to the equity, it means that the borrower is
borrowing more than the existing capital, so the business may be at risk of debt
repayment, especially if The enterprises face more and more difficulties when
interest rates on banks increase. Creditors or banks also often consider and
carefully evaluate the debt ratio (and some other financial indicators) to decide
whether to lend or not.
- Equity multiplier

The debt to equity ratio measures the financial size of an enterprise, indicating
what percentage of its debt to the business is. Corporate debt includes both
short-term and long-term debt. The total capital of the enterprise includes its
debts and equity - shareholder's equity (including ordinary shares, preferred
shares, interest payables and net debt). Debt and equity are two basic sources of
capital to finance a company's operations. These two sources of capital have
unique characteristics and the relationship between them is widely used to assess
a company's financial situation.
Debt to equity ratio gives investors an overview of financial strength, financial
structure and how the company can pay for its operations. Typically, if this
coefficient is greater than 1, it means that the assets of the firm are financed
primarily by debt, whereas the assets of the business are primarily financed by
equity. In principle, the smaller this coefficient is, meaning that liabilities
account for a small proportion of total assets or total capital, less financial


difficulties for businesses. The larger the ratio, the greater the difficulty in
paying debts or bankruptcy of the business.
In fact, if the liability is too large for the equity to mean the company borrows
more than it already has, the company may be at risk of repaying the debt,

especially the more encounter more difficulties when interest rates on banks rise.
Creditors or banks also often consider and carefully evaluate debt ratios (and
some other financial ratios) to decide whether to lend to businesses or not.
However, the use of debt also has an advantage, that is, interest expenses will be
deducted from corporate income tax. Therefore, businesses must weigh the
financial risks and advantages of debt to ensure a reasonable ratio.
- Times Interest Earned

Coefficient of interest payment of an enterprise is a coefficient that indicates an
enterprise's ability to pay interests on unpaid debts. The interest payment ratio
measures the number of times the company can pay its current interest on its
existing income. In other words, this indicator measures the level of safety at
which a company pays interest in a given period. The ability of the company to
pay to meet its interest payment obligations is an aspect of the company's debt
payment.
The lower the company's ability to pay interest, the higher the debt cost of the
company. When the company's interest rate is 1.5 or lower, its ability to meet
interest expenses can be a big problem.
The ratio of 1.5 is generally considered to be a minimum acceptable rate for a
company and, if lower, the borrower is likely to refuse to lend your company
more money, because of the risk of breakage. The company's debt at this time is
very high.


Moreover, the interest rate paid below 1 indicates that the company did not
generate enough revenue to meet the interest expenses. If the ratio of a
company is less than 1, it may be necessary to spend some of its cash reserves
to meet demand or borrow more, and of course the ability to borrow more is
very low. Without more loans within 1 month, the company is in bankruptcy.



Asset management or turnover ratios

Total asset turnover ratio is used to assess the effectiveness of the company's
asset use. Through this coefficient, the investor can know how many coins of
revenue are generated for each asset.
-

Inventory turnover

Inventory turnover is one of the financial ratios to evaluate the
performance of an enterprise. This ratio is calculated by dividing the
turnover (or cost of goods sold) in a given period by the average of the
inventory value in the same period. Here, the average of inventory value
is equal to the average of the beginning and ending values.
Ratios show how much inventory turns during the period to generate the
amount of revenue recorded during that period. A higher ratio may be a
sign that a business is operating effectively. This index shows the ability
to manage inventory effectively. A higher inventory turnover index
indicates that businesses sell faster and inventory is not stagnant in the
business. This means that the business is less risky if seen in the financial
statements, the value of inventory items decreases over the years.
However, this index is too high, which is not good because it means that
the stockpile is not much, if the market demand increases suddenly, it is
very likely that the business will lose customers. In addition, stockpiling
of raw materials for production is not enough to cause the line to stall. So


inventory inventory needs to be large enough to ensure the level of

production meets customer needs.
-

Receivables turnover ratio:

Receivables turnover is one of the financial ratios to assess the
performance of an enterprise. It shows how many receivables have to spin
in a given reporting period in order to achieve revenue during that period.
High receivables turnover ratio shows the ability to effectively collect
receivables and debts from customers. High receivables turnover ratio can
also be a sign that a business is operating mainly on cash.
High receivables turnover ratio also shows that the company is cautious in
granting credit to customers. A prudent credit policy can be beneficial
because it helps the company somewhat prevent the risk of doubtful debts.
However, if too cautious, the company could put potential customers in
the hands of competing companies with softer credit policies.
The low receivable turnover ratio indicates that the company has a poor
recovery process, bad credit policies or their customers are unable to pay.
Often a company with a low receivables turnover ratio should revise its
credit policy to ensure a time to recover money. However, if a company is
having a low receivables turnover ratio, it can effectively revise its recall
process, there may be a large cash flow in the financial statements from
the recovery of old outstanding debts.
-

Total assets turnover

Total asset turnover ratio is used to assess the effectiveness of the company's
asset use, which is a measure of the value of turnover or turnover of the
company compared to the value of the company's assets. Through this

coefficient we can know for each copper asset how many coins are generated.
The higher the total asset turnover, the more effective the company's assets are
used in production and business activities. However, in order to have an accurate
conclusion about the effectiveness of a company's asset use, we need to compare
the company's asset turnover ratio with the industry's average asset turnover
ratio. This coefficient is the opposite of profit margin (profit margin - the ratio of
profit to net revenue), meaning that the higher the coefficient of total assets
turnover, the smaller the profit margin and vice versa.

 Profitability ratios
Profitability ratios cover a company's operating ability, including its
ability to make income and, therefore, cash flow. Cash flow concerns the
company's strength to obtain liability and equity financing.
-

Profit margin ratio ( Return on sales)

The profit margin ratio, also known as the operating performance ratio,
estimates the company's ability to turn its sales into net income. To
evaluate the profit margin, it must be compared to rivals and industry
statistics. It is calculated by dividing net income by net sales. Creditors
and investors use this ratio to measure how productively a company can
convert sales into net income. Investors want to make sure profits are
high enough to share dividends while creditors want to make sure the
company has enough profits to pay back its credits. In other words,
outside users want to know that the company is controlling efficiently. A
deficient profit margin formula would show the expenses are too high,
and the administration needs to budget and decrease costs.

-

Return on assets (ROA)


Return on assets is a financial indicator that measures how well a
company returns to its total assets. In other words, this indicator shows
how much money the company can earn from a single asset they control.
Return on assets gives managers, investors or analysts an idea of how well
the company manages its assets to generate income.
If ROA > 0, it means that the business is profitable. The higher the ROA,
the more effective the business is. If ROA < 0 means the business is
unprofitable.
Return on assets is often used when comparing a company's performance
across periods or when comparing two different companies of the same
size and industry. Usually different industries have different ROA.
Industries that are capital intensive and require a high value of fixed assets
to operate, generally have a lower ROA. However, a company with large
assets may have a large ROA if its income is high enough.
-

Return on equity

The return on equity ratio or ROE is a profitability ratio that measures the
firm's ability to generate profits from its shareholder's investments. In
other words, the return on equity ratio illustrates how much profit each
VND of ordinary stockholders' equity makes. Unlike other return on
investment ratios, ROE is a profitability ratio from the investor’s point of
view—not the company. Investors want to see a high return on equity
ratio because the company is using its investors’ funds effectively. Higher

ratios are almost always more beneficial than lower ratios, but have to be
related to other companies’ ratios in the industry. Since every industry has


different levels of investors and income, ROE can’t be used to compare
companies outside of their industries effectively.
Many investors choose to calculate ROE to see the change in return. That
helps follow a company’s progress and ability to keep a positive earnings
trend.

1.2.5 Dupont Identity
A method of studying the continuous impact of factors affecting the
financial situation of an enterprise. This is a simple but highly effective
tool that allows analysts to get a general overview of the basics of the
business from which to make the right business decisions.
According to this method, we must first consider the interaction between
the profitability of revenue and the efficiency of asset capital. Next
consider the return on equity

Based on the above, businesses can apply some measures to increase ROE
as follows:
- Impact on the financial structure of the business through adjusting the
debt ratio and equity ratio to suit operational capacity.
- Increasing efficiency of asset utilization. Improve the turnover of assets,
through both increasing the scale of net revenue, and using economically
and reasonably the structure of total assets.
- Increase sales, reduce costs, improve product quality. Since then
increase the profits of the business.
In summary, the analysis of financial statements using the Dupont model
which has great significance for corporate governance shows that it is

possible to fully and objectively assess the factors that affect the
efficiency of production and business from there. conduct improvement of


organizational management of the business.1.3. Factors affecting financial
situation of a company
1.3.1 Subjective factor
Objective factors are external factors that affect the analysis of corporate
financial situation such as socio-political situation, economic growth rate,
development of science and technology, monetary policy, tax policy, ...
Specifically:
- General information is information on political, economic, legal and economic
situations related to economic opportunities, investment opportunities,
technological and technological opportunities, etc. or the growth of the economy
has a strong impact on the business results of the business. Information about
market surveys, prospects for development in production, business and
commercial services ... greatly affects business strategies in each period.
- Economic sector information is information that results of an enterprise's
economic nature, such as characteristics of economic industry related to the
entity of the product, technical process to be conducted. , the production
structure has an impact on profitability, capital turnover, the pace of
development of economic cycles.
- Industry average indicator system: financial analysis will become more
complete and meaningful if the existence of the industry average indicator
system exists. The analyst can only say whether the financial ratios of the
business are low or high, good or bad when compared to the corresponding
ratios of other businesses with similar business characteristics and conditions.
Representative here is the industry average. Through comparison with the
system of industry average indicators, financial managers will know the
financial situation as well as business performance of the business.

1.3.2 Objective factor
In addition to the above mentioned objective factors that affect the analysis of
the financial situation of the enterprise, the factors that also have significant


impact are subjective factors. Subjective factors are internal factors that belong
to the business organization.
- Information of the enterprise itself is information about the business strategy of
the enterprise in each period, information about the business situation and results
of the enterprise, the situation of creation, distribution and use. capital, situation
and solvency, ... This information is expressed through explanations of
managers, financial statements, management accounting reports, statistical
reports and professional accounting. ...
- Data used for financial analysis: Data used to analyze, evaluate and draw
conclusions about the financial situation of the business is an extremely
important factor. The fact that enterprises provide accurate and truthful data
helps to analyze the financial situation objectively and properly. Honest data
helps in analyzing the financial situation objectively and properly. Honest data
will help the results to be accurately identified, give accurate assessments of the
capacity of the enterprise itself, the position of the business compared to the
industry in particular and in the economic market. competition in general.
Sometimes in reality, in order to achieve economic goals such as borrowing
from banks, applying for economic benefits or seeking financing for investment,
enterprises have policies to falsify financial data to meet require by the partner.
It is also a subjective factor affecting the analysis of corporate financial
situation.
- Qualifications of financial analysts: financial analysts are also a subjective
factor affecting the analysis. Whether or not the outcome of a business financial
analysis is accurate depends a great deal on the qualifications of financial
analysts.

Each

expert

has

different

assessments.


Chapter 2: : FINANCIAL STATEMENT ANALYSIS IN QUANG TRUNG
INDUSTRIAL JOINT STOCK COMPANY IN THE PERIOD OF 20172019
2.1 Overview of Quang Trung Industry Joint Stock Company
2.1.1 Establishment and Development
Basic information about the company:
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Quang Trung Industrial Group Joint Stock Company

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Headquarters: 494 Doan Ket, Nguyen Hue Street, Ninh Phong

Ward, Ninh Binh City, Ninh Binh Province
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Form of ownership: Joint stock company

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Investment: VND 6.868.000.000.000

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Full name of the legal representative of the company: Mr. Nguyễn

Tăng Cường
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Tax code: 2700118201

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Phone: 037 964 5086

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Mail:

QuangTrung Industrial Joint Stock Company (Tax Identification Number:
2700118201) was established on September 6, 2016, inheriting from
QuangTrung Mechanical Enterprise established in 1992.Quang Trung Industrial
Group is a unit with a long track record of achievements, highly appreciated by
the Communist Party, the State and other ministries for collective and individual
efforts in ten years of renovation and awarded many noble rewards. Notably, at
the end of 2000, it was honoured to be highly appreciated by the Communist
Party and State for personal achievements of General Director Nguyen Tang
Cuong, conferred the title of Labor Hero in the Renewal period - the youngest

person in Vietnam to receive the medal. This brand is also a national emulation


fighter, reported achievements at the 2000 National Emulation Conference and
was honoured to sit on the Presidium.
In 2002, the company was awarded the First Class Labor Medal. In 2005, it was
awarded the Third Class Independence Medal. In 2011, General Director
Nguyen Tang Cuong was awarded the Ho Chi Minh Prize for science and
technology by the State President and was credited with designing and
manufacturing a 1,200-ton crane for Son La hydroelectric power plant, finishing
the projects 2 years earlier than predicted, benefiting the State more than tens
of trillion. Besides, the Group was also awarded many certificates of merit by
the central and local ministries: The Ministry of Finance's certificate of
excellence for tax payment achievement; Certificate of Merit from the Ministry
of Public Security for achievements in preserving social order and security;
Merit of the Ministry of Science for contributing to promoting scientific
development of Vietnam; Certificate of Merit from the Ministry of Industry and
Trade for achievements in contributing to the development of industry and trade
and hundreds of product quality gold medals at domestic and international fairs.
In particular, the lifting equipment products of the unit were voted by the
Ministries as one of 6 items included in the national essential product program
of Vietnam. In 2016, the company was voted by quality standards organizations
to evaluate lifting equipment products up to national quality standards.
With 30 years of experiences in the mechanical engineering field, QuangTrung
Industrial Group has 1,800 employees, including 300 people at the
undergraduate level, postgraduate level, with more than 200 mechanical
engineers and 500 high-skilled workers and unskilled workers (production
workers are trained directly from the mechanic and material engineering
workers' schools)
From a small mechanical enterprise, the company has risen to the top of Vietnam

in the field of manufacturing lifting equipment. It has breakthroughs in the
design, manufacture and construction of steel bridges and suspension bridges