BANKING ACADEMY ADVANCED PROGRAM ---------- GRADUATION THESIS SOLUTIONS TO IMPROVE THE EFFICIENCY OF CURRENT ASSETS MANAGEMNENT IN MEDICAL PUBLISHING HOUSE LIMITED COMPANY Supervisor: Nguyen Thi Tuyet Lan Student name: Nguyen Huyen Nga Class: K20CLCCD Faculty: Finance Student code: 20A4011141 Hanoi, 05/2021 DECLARATION I declare that the thesis entitled “Solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company” is conducted by myself. The source of information and data reported in this work have been fully provided in the text and references. No part of my thesis was previously presented in another thesis or for another degree and diploma. Hanoi, May 20th 2021 Student Nguyen Huyen Nga i ACKNOWLEDGEMENT First of all, I would like to give my special thanks to my supervisor Nguyen Thi Tuyet Lan for her guidance and constructive criticism so that I can finish my thesis.
I also want to give respect and gratitude to General Director Chu Hung Cuong and all of the staff in Accountant Department of Medical Publishing House Limited Company. It is my huge honor to have such a great chance to work with them. They helped me a lot in collecting data, provided me with necessary information and useful advice during the whole time making this project. Thanks to their enthusiastic support, I can do my research and complete my graduation thesis without facing any difficulties.
Hanoi, May 20th 2021 Student Nguyen Huyen Nga ii CONTENTS LIST OF ABBREVIATIONS. v LIST OF TABLE. vi LIST OF FIGURE. The reason to choose the topic.
The target of the research. The object and the research scope. The research methods. The structure of the thesis.
3 Chapter 1: Theoretical basis of current assets and the efficiency of current assets management. Overview of current assets. Characteristics of current assets. Category of current assets.
Function of current assets. The efficiency of current assets management. Indicators to evaluate the efficiency of current assets management. Factors impact on the efficiency of current assets management.
12 CONCLUSION OF CHAPTER 1. 17 Chapter 2: The current assets management in Medical Publishing House Limited Company. Overall information about Medical Publishing House Limited Company. History of the foundation and development and organization structure of Medical Publishing House Limited Company.
Features of business. The business result of the firm. The current assets management in Medical Publishing House Limited Company. Analyzing the structure of current assets.
Indicators to evaluate the efficiency of current assets management. Evaluating the efficiency of current assets management of Medical Publishing House Limited Company. Drawbacks and causes. 48 CONCLUSION OF CHAPTER 2.
53 Chapter 3: Solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company. Oriented development and target of Medical Publishing House Limited Company in the future. Solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company. Accomplishing the cash management policy.
Accomplishing the accounts receivable management. Accomplishing the inventory management. Solutions about facilities factor. Solutions about human factor.
59 CONCLUSION OF CHAPTER 3. 64 iv LIST OF ABBREVIATIONS Abbreviated words Original COD Cash on delivery COGS Cost of goods sold MPH Medical Publishing House Limited Company v LIST OF TABLE Table Page Table 2.1: Income statement of Medical Publishing 9 House Limited Company Table 2.2: Revenue deduction of MPH 12 Table 2.3: Revenue from financing activity of MPH 13 Table 2.4: Cost of goods sold of MPH 13 Table 2.5: Financial expense of MPH 14 Table 2.6: The structure of current assets 18 Table 2.7: Cash and cash equivalents of MPH 20 Table 2.8: Current Accounts Receivables of MPH 22 Table 2.9: Inventories of MPH 23 Table 2.10: Liquidity ratios 26 Table 2.11: Quick ratio of MPH 28 Table 2.12: Cash ratio of MPH 29 Table 2.13: Operating ratios 30 Table 2.14: Inventory Turnover Ratio 31 Table 2.15: Average Collection Period 32 vi LIST OF FIGURE Diagram Page Diagram 2.1: Organization structure 6 Chart Page Chart 2.1: Net revenue of MPH 11 Chart 2.2: Administration expense of MPH 15 Chart 2.3: Profit of MPH 16 Chart 2.4: Structure of MPH’s current assets 19 vii INTRODUCTION 1. The reason to choose the topic In the tough period of the global economy and Vietnam market economy, Vietnamese business enterprises have to find out many solutions for survival and develop purpose. All of business companies need to learn how to manage the operating cash flow, working capital effectively so that they can bring out the best result and maximize the value of the company.
Current assets management can be the most important key to get them closer to achieve that milestone. Current assets account for a dramatically huge part of the capital structure of a company. Therefore, searching on how to manage current assets efficiently will help them have an overall view about using current assets in a correct way and they can carry out the most effective measure to minimize expense and maximize their profit. After raising awareness of the importance of the topic, I have concerned and done a lot of studies about current management during my internship time in Medical Publishing House Limited Company.
With my own experience in practical working and searching, i decided to choose the topic “ Solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company” for my graduation thesis. Research overview There have been a lot of studies about solutions to improve the efficiency of current assets management. In Vietnam, Master Nguyen Thi Thu Yen (2012) has done a research about solutions to improve the efficiency of current assets management in Bibica joint-stock company. Bibica company is a food and beverage production and business activities.
The thesis pointed out the crucial part of current assets enhancement when economy market in Vietnam was greatly impacted by the finance and public debt crisis in Europe. 1 With the tobacco production and business company, Tran Hoang Minh (2015) also indicates the importance of finding solutions to improve the efficiency of current assets management in Thang Long tobacco company when the company found it difficult in mobilizing the working capital. Phan Thi Mai Huong (2015) shows the impact of improving current assets management on the business result in Son Tay water joint-stock company when the company was struggling with Divestment and was no longer able to receive the capital support from the Government. In summary, all of the 3 studies above analyze and assess the improve the efficiency of current assets management according to the outline: overview about the efficiency of current assets management, analyzing and evaluating the practical situation of current assets management in the company and finally bringing out solutions to improve the efficiency of current assets management.
The target of the research - Study the theoretical and practical basis of current assets and the efficiency of current assets management. - Analysis and assessment the efficiency of current assets management in Medical Publishing House Limited Company. - Suggest solutions and propose some recommendations to improve the efficiency of current assets management in Medical Publishing House Limited Company. The object and the research scope The object of the research: solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company The research scope: solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company during the period 2018 – 2020.
The research methods Research methods in the thesis include comparative methods, horizontal analysis methods, vertical analysis, proportional analysis. Based on the data is provided and the status of the company operations, calculation, assessments and conclusions have been done throughout the thesis. The structure of the thesis The content of thesis is divided into 3 main parts: Chapter 1: Theoretical basis of current assets and the efficiency of current assets management Chapter 2: The current assets management in Medical Publishing House Limited Company Chapter 3: Solutions to improve the efficiency of current assets management in Medical Publishing House Limited Company 3 Chapter 1: Theoretical basis of current assets and the efficiency of current assets management 1. Overview of current assets 1.
Definition First of all, we need to figure out what an asset means. An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. Assets are recorded on a company’s balance sheet and are created to raise value of a company and benefit the company's operations. An asset can be recognized as a thing that can generate cash flow, lower expenses or build up sales in the future, regardless of whether it's manufacturing equipment or a patent.
An asset represents an economic resource for a firm or an access that other individuals or firms do not have. A right or other access is legally enforceable, which means economic resources can be used at a firm's discretion, and its use can be limited by an owner. Assets can be classified into several types: current assets, fixed assets, financial investments and intangible assets… Current assets represent all the assets of a firm that are expected to be used and converted into cash within a year or less than a year. Current assets are reported on balance sheet - one of the financial statements that is required to be accomplished each year.
Current assets exist in the form of cash and cash equivalents, accounts receivable, inventories, marketable securities and other current assets. Furthermore, current assets are assets with high liquidity that can be easily transformed into cash. Therefore, the management as well as the use of current assets will have a huge impact on business operations of a firm. Characteristics of current assets Current assets are completely distributed in all stages to make sure the production and business process stable and then avoid wasting capital losses, guarantee the solvency and return on asset ratio.
Therefore, current assets of a company have the following characteristics: Current assets are usually used under a business cycle or in a year. Current assets such as cash, inventory is often used in a business cycle, different from fixed assets like machinery, equipment, and workshops that are used for many years. Current assets consist of several types, such as cash and cash equivalents, inventories and each one has its own purposes: cash and cash equivalents have high liquidity so they meet the requirement of the solvency of the business, inventories are used in production process. Current assets only participate in a cyclic production, which means that any expenses incurred during conversion into finished goods have already counted in the finished goods before reaching out to the market.
Category of current assets If we want to manage current assets efficiently, the requirement of understanding components and structures is compulsory. Depending on various management requirements that long-term assets will have different classifications. Current assets are particularly classified into 2 main parts: in the business process and with the ability of conversion into cash. Current assets in the business process: Current assets take part in core businesses: raw materials, work in progress, tools or packaging materials,.
Current assets take part in sub-businesses: working in mobile repairs or providing service. 5 Current assets take part in the management of a firm: administrative management, business management with materials for vehicles, offices, and stationery tools,. Current assets with the ability of conversion into cash: Cash and cash equivalents: Includes cash capital during a sale process or payment methods such as in cash, bank, or cash in transit. Cash equivalents are short-term held to maturity investments of less than 3 months and they must be convertible to cash.