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<b>INTERNATIONAL BUSINESS---o0o---</b>

<b>COPORATE FINANCE</b>

<b>GROUP ASSIGNMENT</b>

<b>ANALYZING FINANCIAL STATEMENTS OF A VIETNAMESE COMPANY</b>

Lê Duy BảoPhan Quang Thiện Nguyễn Kim Ngọc Nguyễn Xuân Trường

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Member Task Evaluation Evaluation by groupHà Thúc

Calculate 2018 financial ratios. Give comments on liquidity ratios and capital structure ratio. Check all document and Word, distribute mission

Willing to fix the error of members in groupContribute to everyone answering question

ratios. Comments on TurnoverRatios; Collect 2022 closing price of stock and estimate theaverage daily returns.

Positive attitude on helping others,Value contribution, formulas, figures, comments,...Completed tasks on time.

Phan Quang Thiện

Calculate 2021 financial ratios; Compare the company’s ratios to Competitor

Calculated carefully in the figures

Supported other membersCompleted missions

Nguyễn KimNgọc

Calculate 2019 financial ratios, Calculate question 2,3. Comment figure on Profitability ratio and market-to-book ratio

Provide suggestions for the problem.

Completed tasks assignedSupport other members

Nguyễn Xuân Trường

Calculate 2020 financial ratios; Suggest the reasons for the changes of the figures overthe period. Summary on financial performance of the company

Completed tasks assigned Calculated carefully in the figures

Supported other members

100%

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<small>1.4.Net working capital to assets (NWCTTA)...9</small>

<small>2.Capital Structure Ratios...10</small>

<small>2.1.Total debt ratio...10</small>

<small>2.2.Debt-equity ratio...11</small>

<small>2.3.Equity multiplier...12</small>

<small>2.4.Long term debt ratio...12</small>

<small>2.5.Times interest earned ratio...13</small>

<small>3.Turnover Ratios...15</small>

<small>3.1.Inventory turnover...15</small>

<small>3.2.Days' sales in inventory (days)...16</small>

<small>3.3.Receivables turnover...17</small>

<small>3.4.Days' sales in receivables (days)...18</small>

<small>3.5.Fixed asset turnover...19</small>

<small>3.6.Total asset turnover...20</small>

<small>4.Profitability ratios:...21</small>

<small>4.1.Profit margin:...21</small>

<small>4.2.Return on assets (ROA)...23</small>

<small>4.3.Return on equity (ROE)...23</small>

<small>4.4.Return on investment (ROI):...24</small>

<small>5.Market value ratios...25</small>

<small>5.1.Price-earnings ratio...25</small>

<small>5.2.Price-sales ratio...25</small>

<small>5.3.Market-to-book ratio...26</small>

<small>III.Summary on company financial performance...27</small>

<small>IV.Comparing to competitor...27</small>

<small>References...31</small>

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I. Overview of the company1. Introduction [1]

Name of the company: Thieu nien Tien Phong Plastic Joint Stock CompanyTicket symbol on HOSE: NTP

Address of headquarter: No. 2 An Da, Lach Tray Ward, Ngo Quyen District, Hai Phong CityTel: 0225-3813979

Fax: 0225-3813989

2. History of establishing and developing

specialized in producing products to serve children and teenagers.

In 1990, Business shifting: the business shifted to PVC pipes and gradually entered the constructionindustry.

Joint Stock Company.

In 2015, company expanded production scale and moved the company's headquarters to Hai Phong.3. Industry

Since 1990, after more than 30 years of sticking with traditional products, Thieu nien Tien Phong Plastic Joint Stock Company laid the first bricks for the transformation of production and business inthe field of plastic construction materials, in order to serve industrial, transportation, oil and gas, civil works, etc.

The main product lines provided by the company include HDPE plastic pipes and fittings, PP-R plastic pipes and fittings, uPVC plastic pipes and fittings, electrical conduit pipes and fittings.

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To promptly meet customer needs, the company has established 3 factories operating day and night in Hai Phong, Binh Duong, and Nghe An. The distribution network covers all provinces and cities with 9 distribution centers, More than 300 agents and nearly 20,000 stores nationwide.

4. Competitors

An analysis report from Thanh Cong Securities (TCSC) said that 2014 - 2017 was a period of explosive growth for businesses in the construction plastic industry, in which Binh Minh Plastic Joint Stock company and Thieu nien Tien Phong Joint Stock company were the two leading listed companies in terms of capacity design as well as market share nationwide. BMP mainly focuses on building factories in the southern region, not investing in the central region; Meanwhile, NTP focuses on the North. Therefore, BMP is the competitor of NTP

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II. Financial statements analysis1. Liquidity ratios

<b>Comment: From 2018 to 2022, the company’s current ratio experienced some </b>

fluctuations. In 2018, the ratio was 1.12, indicating that the company had 1.12 times more current assets than current liabilities. Although this is a healthy ratio, it falls slightly short of the ideal benchmark of 2.0. In 2019, the ratio rose to 1.27, reflecting an enhancement in the company’s short-term liquidity position. The upward trend continued into 2020, with the ratio climbing to 1.32. This increase signals the company’s improving financial health and its growing ability to cover its short-term liabilities with its short-term assets.However, in 2021, the ratio dipped slightly to 1.25While it remained above 1, this decrease could suggest a reduction in the company’s current assets or liquidity, or an increase in current liabilities.By 2022, the ratio had rebounded significantly to 1.38, the highest level in the past five years. This increase implies that the company’s short-term financial health has improved, and it is well-equipped to pay off its short-term labilities.

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current assets compared to short-term liabilities. However, in 2021, the company's current ratio experienced a sudden decline over aof 5 years, as the growth rates of current assets and short-term liabilities exhibited a less significant gap and the company were adaptithe post-pandemic environment.

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<b>Comment: From 2018 to 2022, the company’s quick ratio experienced some </b>

fluctuations. In 2018, the quick ratio was 0.70, indicating that the company had 70 cents in liquid assets for every dollar of current liabilities. The company might have faced some challenges in immediately covering its current liabilities without selling inventory. In 2019, the quick ratio slightly decreased to 0.69, which could imply a slight increase in liabilities or a decrease in the most liquid assets. However, in 2020, the quick ratio increased to 0.81, showing an improvement in the company’s liquidityposition and its ability to cover its short-term liabilities without relying on the sale of inventory. In 2021, the ratio decreased slightly to 0.75, but it still indicates that the company had sufficient liquid assets to cover its current liabilities. However, in 2022the ratio decreased again to 0.69, returning to the 2019 level. This could suggest that the company’s most liquid assets decreased or its current liabilities increased during this period.

<b>Reason suggested: The company's quick ratio generally remained within a reasonable range. However, in 2020, the quick ratio incr</b>

due to a sharp decline in the company's inventory caused by the impact of the COVID-19 pandemic and the company might have some challenges in immediately covering its current liabilities without selling inventory.

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Cash ratio 0,03 0,16 0,17 0,07 0,08

<b>Comment: In 2018 The cash ratio was 0.03, which means the company had only 3 </b>

cents in cash and cash equivalents for every dollar of current liabilities. This is a verlow ratio.2019, the ratio increased significantly to 0.16, showing an improvement inthe company’s liquidity position. The ratio further increased slightly to 0.17 next year, indicating the company’s improving financial health. In 2021: The ratio decreased to 0.07. While it’s still above the 2018 level, the decrease might indicate that the company’s cash and cash equivalents have decreased, or current liabilities have increased. 2022, the ratio increased slightly to 0.08, but it’s still relatively low compared to the 2019 and 2020 levels.

<b>Reason suggested: Cash and cash equivalents show a decreasing trend. From 2018 to 2019, cash and equivalents increased, but from</b>

2019 to 2022, there was a consistent decrease. Meanwhile, the short-term debt of the company consistently remains at a high figure eyear. Due to the relatively small amount of cash and cash equivalents compared to the short-term debt, the cash working ratio is consistently less than 1 indicating that the company might have faced challenges in meeting its short-term obligations using only cashcash equivalents.

<b>Formula: NWCTTA= Networking capital/ Total assets</b>

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<b>Comment: Net Working Capital to Total Assets ratio for NTP company initially </b>

showed improvement, followed by a period of stability, and then a substantial increaseWhile an increase in the ratio can indicate better efficiency in utilizing assets for working capital, the company should closely monitor this trend and ensure that it aligns with its overall financial strategy and business objectives. Additionally, a deepeanalysis of the specific factors influencing these changes is essential for a comprehensive understanding of the company's financial health and operational efficiency.

<b>Reason suggested: NWCTTA ratio saw a significant increase because the company's short-term debt decreased sharply compared to</b>

previous year, resulting in a substantial surge in net working capital. NWCTTA ratio remained constant from 2019 to 2021. However2022, this ratio increased due to a sharp decrease in the company's short-term debt and a significant increase in the company's short-tassets.

2. Capital Structure Ratios

<b>Formula: Total debt ratio= Total debt/ Total assets</b>

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In 2018, the ratio was 0.54, meaning 54% of the company’s assets were financed by debt, indicating a relatively high financial risk. However, in 2019, the ratio significantlydropped to 0.44, reflecting an improvement in the company’s financial risk position. This positive trend continued into 2020, with the ratio further decreasing to 0.34, signifying a substantial reduction in the company’s financial risk. In 2021, the ratio roseto 0.45, possibly due to an increase in debt or a decrease in assets. By 2022, the ratio remained steady at 0.44, mirroring the 2019 level.

<b>Reason suggested: The decrease in this ratio from 2018 to, resulting from debt repayment and improved profitability leading </b>

increase in the company's equity. In 2020, the trend of decreasing debt ratio continued, driven by a strategic decision to mitigatcompany's financial risks. However, in 2021 witnessed an increase, these changes stem from strategic decisions such as cenhancement, asset acquisitions, debt repayment, or adjustments based on market and economic conditions.

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Comment: In 2018, the debt-equity ratio was 1.16, which means the company had 1.16 times more debt than equity. This is a relatively high ratio, indicating a higher financial risk. The ratio decreased significantly in 2019 to 0.77, showing an improvement in the company’s financial risk position. Next year, the ratio further decreased to 0.50, indicatinga significant reduction in the company’s financial risk. However, in 2021, the ratio increased to 0.81, which might indicate an increase in debt or a decrease in equity. The ratio slightly decreased to 0.79 in 2022, but it’s still relatively high compared to the 2020 level. Overall, the company has been able to reduce its debt-equity ratio over these years, which is a positive sign.

<b>Reason suggested: In 2021, the ratio increased, due to increased investment or expansion efforts. Finally, in 2022, the ratio stabi</b>

These changes result from debt repayment strategies, improved profitability, strategic financial decisions, market conditions, ancompany's investment and expansion decisions.

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<b>Comment: In 2018, The equity multiplier was 2.16, which means the company had </b>

significantly more debt compared to equity. This could indicate a higher risk due to the increased reliance on borrowed money. The equity multiplier decreased to 1.77, suggesting that in 2019, the company reduced its debt or increased its equity, thereby reducing its financial risk. In 2020, the equity multiplier further decreased to 1.50, indicating a continued trend of reducing financial risk by either decreasing debt or increasing equity. Next year, the equity multiplier increased slightly to 1.81, suggesting a slight increase in financial risk compared to the previous year. In 2022: The equity multiplier slightly decreased to 1.79, indicating a small reduction in financial risk.

<b>Reason suggested: In 2019-2020, this ratio decreased, as a result of debt repayment or the strengthening of equity through accumu</b>

profits. In 2021, there was an increase. And in 2022, this ratio showed little variation. Factors explaining these changes includemanagement strategies, dividend decisions, the influence of market and industry conditions.

<b>Formula: Long term debt ratio = Long term debt / (Long term debt + Total equity)</b>

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exhibited a positive trend from 2018 to 2022. Starting at 124.73 days in 2018, indicating a longer collection period, significantly decreased in 2019 to 73.06 days, implying an improvement in the company's ability to collect payments more swiftly, the DSR steadily decreased to 55.74 days in 2022. This reduction signifies a substantial improvement in the company's efficiency in collecting payments from customers, translating to faster conversion of receivables into cash. The declining trend suggests effective credit and collection policies, positively impacting the company's cash flow and liquidity.

<b>Reason suggested: In 2019, the ratio decreased, because of debt repayment or a decision not to increase long-term debt further. In 2</b>

the ratio decreased significantly, due to the impact of the Covid-19 pandemic. Throughout 2021 and 2022, the Long-Term Debtremained extremely low, reaching 0.01 and even 0.00. Possible reasons for this change include debt repayment strategies, financiamanagement, and a preference for using other sources of capital such as equity or internal financial resources.

<b>Formula: Times interest earned ratio = EBIT/ Interest</b>

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<b>Comment: In 2018, the times interest earned ratio was 4.55, which means the </b>

company could cover its interest payments 4.55 times with its earnings.2019: The ratio increased to 5.11, suggesting that the company’s earnings increased. Next year ,2020, the ratio further increased to 8.84, indicating a significant improvement in the company’s ability to cover its interest payments. In 2021, the ratio peaked at 14.31, suggesting a strong financial performance and a high ability to cover interest payments. In 2022, the ratio decreased to 8.18, but it’s still relatively high, indicating a good ability to cover interest payments.

Overall, the company seems to have been improving its financial performance over these years, as indicated by the generally increasing times interest earned ratio

<b>Reason suggested: In 2019-2021 period, TIE consistently increased, due to profit growth and reduced interest expenses of the bank. </b>

Especially, in 2022, the Vietnamese bank and global bank adjusted their interest rate for the company to survive and recover after thePandemic. However, in 2022, the ratio decreased due to declining profitability and increased interest costs to a normal day

<b>Formula: Cash coverage ratio (CCR) = (EBIT+ Depreciation)/ Interest</b>

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<b>Comment</b>: In 2018, the cash coverage ratio was 14.87, which means the company couldcover its current liabilities 14.87 times with its cash and cash equivalents.The ratio increased to 16.04, suggesting that the company’s cash and cash equivalents increased or its current liabilities decreased. In 2020, the ratio further increased to 29.73, indicating a significant improvement in the company’s ability to cover its current liabilities with cash. The ratio peaked at 51.02 in 2021, suggesting a strong financial performance and a high ability to cover current liabilities with cash. In 2022: The ratio decreased to 29.40, but it’s still relatively high,

<b>Reason suggested: By 2019, the Cash Coverage Ratio increased, driven by the company's increased profitability. In the year 2020, </b>

was a significant breakthrough, stemming from reduced interest expenses and maintaining the company's revenue at a steady levmitigate the impact of the Covid-19 pandemic. In 2021, the ratio soared, because of enhanced profitability and reduced interest paymHowever, in 2022, the ratio decreased, although still high, due to an increase in interest payments compared to the previous year.

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2022. Starting at 3.20 in 2018, the company exhibited a moderate turnover, indicatinga balanced inventory management approach. Despite a slight decrease to 3.08 in 2019,the figure spiked to 4.78 in 2020, suggesting improved efficiency in utilizinginventory. However, in 2021 and 2022, the Inventory Turnover declined to 3.40 and2.80, respectively. While lower turnover may imply a longer inventory holdingperiod, it's crucial to consider industry benchmarks for a comprehensive assessment.

<b>Reason suggested: In 2019, there was a slight decrease in the Inventory Turnover Ratio due to a moderate increase in inventory </b>

relatively small increase in the cost of goods sold. However, in 2020, the ratio increased significantly as a result of a sharp decreainventory. By 2021, the ratio decreased because the company held more inventory to meet customer demand after the Covpandemic. Finally, in 2022, the Inventory Turnover Ratio experienced a sudden drop, as the company held excessive inventory despincrease in the cost of goods sold.

<b>Formula: Days' sales in inventory = 365 days/ Inventory turnover</b>

Days'sales ininventory

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