ACADEMY OF POLICY AND DEVELOPMENT INTERNATIONAL SCHOOL OF ECONOMIC AND FINANCE GRADUATION THESIS Topic: "Evaluation business efficiency of 584 Nha Trang Sea Product Joint Stock Company” Supervisor: Dr. Doan Anh Tuan Student: Ngo Thi Truc Linh Student ID : 5073402115 Class: TC CLC 7 Hà Nội, tháng 3/2020 1 ABSTRACT Nowadays, food safety is an important issue, often concerned by the media and the public. In the recent years, the food market has many confidence crises with consumers. In particular, it is impossible not to mention the crisis of traditional fish sauce.
Therefore, the fish sauce market - an indispensable spice in Vietnamese family meals, has made important changes, getting closer to transparency to win trust from consumers, along with that. is the healthy competition in the market. Recognizing the importance, being facilitated and guided by Mr. Doan Anh Tuan, I chose 584 Nha Trang Sea Product Joint Stock Company - whose main business is to produce traditional fish sauce to make a training report with the content "Evaluation business efficiency of 584 Nha Trang Sea Products Joint Stock Company".
Special thanks to the chief accountant – Mr. Truong Nguyen Anh Tuyen and 584 Nha Trang Sea Products Joint Stock Company staff for your help in my internship period in the company. I have gained a lot of practical knowledge as well as an opportunity to apply the knowledge I learned to complete this report. 2 CHAPTER 1: THEORETICAL BASIS FOR FINANCIAL CAPITAL 1.1 The concept of financial capital 1.1 Definition For each business in particular and the economy in general, which always plays a very important role.
Depending on each socio-economic situation, there are many different views and judgments about financial capital that have been made. It is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based. But in this thesis, I give some definitions according to International Financial Reporting Standards (IFRS). A financial concept of capital is adopted by most entities in preparing their financial report.
Under a financial concept of capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity of the entity. Under a physical concept of capital, such as operating capability, capital is regarded as the productive capacity of the entity based on, for example, units of output per day. In IFRS, there are two concepts of financial capital maintenance as follows: Physical concept of capital and Financial concept of capital. About Financial capital maintenance, under this concept, a profit is earned only if the financial (or money) amount of the net assets at the end of the period exceeds the financial (or money) amount of net assets at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period.
Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power. Under the concept of financial capital maintenance where capital is defined in terms of nominal monetary units, profit represents the increase in nominal money capital over the period. Thus, increases in the prices of assets held over the period, conventionally referred to as holding gains, are, 3 conceptually, profits. They may not be recognized as such, however, until the assets are disposed of in an exchange transaction.
When the concept of financial capital maintenance is defined in terms of constant purchasing power units, profit represents the increase in invested purchasing power over the period. Thus, only that part of the increase in the prices of assets that exceeds the increase in the general level of prices is regarded as profit. The rest of the increase is treated as a capital maintenance adjustment and, hence, as part of equity. And about physical capital maintenance, under this concept, a profit is earned only if the physical productive capacity (or operating capability) of the entity (or the resources or funds needed to achieve that capacity) at the end of the period exceeds the physical productive capacity at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period.
Under the concept of physical capital maintenance when capital is defined in terms of the physical productive capacity, profit represents the increase in that capital over the period. All price changes affecting the assets and liabilities of the entity are viewed as changes in the measurement of the physical productive capacity of the entity. Hence, they are treated as capital maintenance adjustments that are part of equity and not as profit. The principal difference between the two concepts of capital maintenance is the treatment of the effects of changes in the prices of assets and liabilities of the entity.
In general terms, an entity has maintained its capital if it has as much capital at the end of the period as it had at the beginning of the period. In short, capital is a prerequisite of any business to participate in production and business activities.1 Classified by source 1.1 Equity Equity is typically referred to as shareholder equity (also known as shareholders' equity), or owner equity (for privately held companies), which represents 4 the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company's debt was paid off. Equity is found on a company's balance sheet and is one of the most common financial metrics employed by analysts to assess the financial health of a company. Shareholder equity can also represent the book value of a company.
Equity can sometimes be offered as payment- in-kind.2 Liability A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services. Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, earned premiums, unearned premiums, and accrued expenses. Even marriages can change your liability.
In general, a liability is an obligation between one party and another not yet completed or paid for. In the world of accounting, a financial liability is also an obligation but is more defined by previous business transactions, events, sales, exchange of assets or services, or anything that would provide economic benefit at a later date. An essential characteristic of a liability is that the entity has a present obligation. An obligation is a duty or responsibility to act or perform in a certain way.
Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. This is normally the case, for example, with amounts payable for goods and services received. Obligations also arise, however, from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner. If, for example, an entity decides as a matter of policy to rectify faults in its products even when these become apparent after the warranty period has expired, the amounts that are expected to be expended in respect of goods already sold are liabilities.
Enterprises can receive debt capital from many sources such as bank loans, corporate bond issuance, loan capital from other enterprises, .2 Classified by roles and characteristics 1.1 Fixed capital This money which is used to purchase assets that will remain permanently in the business and help it to make a profit. Factors used to determine fixed capital needs: Nature of business, size of business, stage of development, capital invested by the owners, location of that area, … Fixed capital is denominated in money by fixed assets, its characteristics also depend on fixed assets. When engaged in production and business, the capital value of fixed capital shifted into the production cost of fixed capital produced. It is understood that fixed capital is depreciated by the number of products produced.
Fixed capital can be divided into 3 types: tangible fixed assets, intangible fixed assets and capital lease. A tangible asset is an asset that has a finite monetary value and usually a physical form. Tangible assets can typically always be transacted for some monetary value though the liquidity of different markets will vary. Tangible assets are the opposite of intangible assets which have a theorized value rather than a transactional exchange value.
An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory. A capital lease is a contract entitling a renter to the temporary use of an asset, and such a lease has the economic characteristics of asset ownership for accounting purposes.
The capital lease requires a renter to book assets and liabilities associated with the lease if the rental contract meets specific requirements. In essence, a capital lease is considered a purchase of an asset, while an operating lease is handled as a true lease under generally accepted accounting principles.2 Working capital Firms use working capital to run their business. For example, money that they use to buy stock, pay expenses and finance credit. Factors used to determine working capital needs: Size of business, stage of development, time of production, rate of stock turnover ratio, buying and selling terms, seasonal consumption, seasonal product, profit level, growth and expansion, production cycle, general nature of business, business cycle, business policies, debt ratio, … Working capital is denominated in cash from working assets, so it is influenced by current assets.
They include some accounts belonging to short-term assets such as: Cash and cash equivalents, short-term investments, short-term receivables, inventory, … 1.3 The role of capital in production and business activities Legally, capital is one of the basic factors to establish a business and go into production and business activities. in the course of operation, capital plays a role of ensuring the smooth and efficient production and business process of enterprises. capital helps businesses carry out production, reproduction and expand investment and business activities. In today's competitive market environment, which helps businesses to be more active in business forms, proactively innovate business forms, machinery and equipment, improve technology,.
Since then, businesses have improved the quality of products, competitiveness, changing models, lowering product costs, checking working time for employees as well as improving operational efficiency.2 The concepts of efficiency of financial capital use 1.1 Definition Capital plays a very important role in the operation and development of the business. Because the effective use of capital in an enterprise is the result of the process of managing and using capital in the production and business process so as to achieve maximum efficiency. That why analyzing the efficiency of capital use in 7 enterprises is also same way with analyzing corporate finance. Besides, the efficiency of capital use also shows the correlation between the input and output of the production and business process through evaluation indicators.
From financial capital efficiency analysis, manager of company can evaluate the process of examining a company’s performance in the context of its industry and economic environment in order to arrive at a decision or recommendation. Moreover, the efficiency of capital use not only shows the evaluation of business results, it also reflects the management, capital exploitation and use capacity of enterprises in order to maximize the profit while minimizing costs.2 Factors affecting the efficiency of financial capital use 1.1 Political and legal environment The political stability of our country is a favorable first hunger for the business environment. Especially after joining the WTO in 2007, the government has had many monetary and monetary policies to help promote domestic production and business activities. In addition, the government is increasingly improving the legal environment, shortening time and simplifying procedures for establishing businesses, building a friendly and healthy business environment.