Group Assignment FIN202 TEAM 3 PDF

Preview

Summary

PNJ’S FINANCE - Group Assignment – FIN GROUP MEMBERS: 1. NGUYEN SON TUNG – HS - 2. LE THI MY DUYEN – HS 3. LO DUY TUNG – HS - 4. DINH PHUONG NGA – HS - 5. DAO MANH HIEU – HS CLASS: IB - 22 nd October LECTURER: HOANG VAN TUONG 1. Introduction TABLE OF CONTENTS 2. Financial statements 3. Financial rat...

Description

PNJ’S FINANCE Group Assignment – FIN202

GROUP MEMBERS: 1. NGUYEN SON TUNG – HS120529 2. LE THI MY DUYEN – HS150531 3. LO DUY TUNG – HS153072 4. DINH PHUONG NGA – HS150244 5. DAO MANH HIEU – HS153198 CLASS:

IB1602

LECTURER:

HOANG VAN TUONG

22nd October 2021

TABLE OF CONTENTS

1. Introduction………………………………………………………2 2. Financial statements……………………………………….4 3. Financial ratios…………………………………………………8 3.1 Liquidity ratios………………………………………………………..8 3.2 Efficiency ratios………………………………………………10 3.3 Leverage ratios………………………………………………11 3.4 Profitability ratios…………………………………………….14

4. Forecast…………………………………………………………...16 5. References………………………………………………………17

1|Page

1. Introduction PNJ Company, formerly known as Jewelry Store, Phu Nhuan District, was established on April 28, 1988. Phu Nhuan Jewelry Joint Stock Company is a Vietnamese joint-stock company. This company specializes in manufacturing and trading gold, silver, gemstone jewelry, business gifts, fashion accessories, souvenirs, watches, buying and selling gold bars, providing diamond and stone testing services. precious metals, precious metals, and real estate business. In 2010, PNJ was ranked 16th by Plimsoll in the top 500 largest jewelry companies in the world. Vision: To become Asia's leading company in jewelry making and retailing beauty products, reaching out to the world. Mission: PNJ is constantly innovating to bring exquisite products with real value to honor the beauty of people and life. Core Values: 1. INTEGRITY FOR PERSONALITY 2. CONTINUOUSLY HOLLOW THE GOAL 3. INTERESTED IN DEVELOPMENT 4. DELICIOUS FOR CUSTOMERS 5. DIFFERENT CREATION PENSION Over 33 years of establishment and development, PNJ has achieved many remarkable achievements: being in the Top 500 leading retailers in the Asia Pacific, Asia Pacific Quality Award, National Brand, Top 500 100 Best Working Environments in Vietnam, Best Working Environments in Asia, Vietnam HR Awards 2020… The company's main market share is through traditional retail stores, which still account for the majority of the market, in addition, the company also sells products on e-commerce sites such as Shopee, Lazada, or Genuine website. The three largest companies in this gold sector include PNJ, DOJI, and SJC, all with over 20 years of experience. DOJI and SJC are two competitors, but each side finds its own strengths to develop. But in the 2|Page

jewelry segment, PNJ's notable competitor is the one-year-old brand Precita, which currently has nearly 20 stores. To be able to develop and grow as it is today, PNJ has been having strategic projects. PNJ has been implementing the new enterprise resource planning project - ERP, which was initially started on April 5, 2018, in Ho Chi Minh City with the most important component of the Digital Transformation strategy. development strategy direction in the period of 2018 - 2022 and a vision to 2030, in which, building a technology infrastructure foundation and digitalizing business operations strategy (Digital Transformation) is an important pillar. Competitors: The world jewelry industry is already familiar with famous brands such as Tiffany, Swarovski or Jacobs & Co. As for Vietnam, the market is "overpopulated" by "emerging" brands such as Shimmer or FloralPunk. However, these are niche brands and are not highly competitive. The common point of these types is outsourcing or importing goods from China or Thailand with pre-defined designs on the market. Growth in revenue - profit or even growth in business size compared to the past is hardly a good indicator for understanding future sustainability. The core problem lies in the difference so that it is difficult or impossible for competitors in the industry to "imitate". Currently, the jewelry industry is divided into 3 different segments with low-end, midend and high-end. With thousands of large and small brands, the market is "saturated with brands" with names like PNJ, Doji, SJC, Bao Tin Minh Chau, Phu Quy and smaller brands like Shimmer and FloralPunk. Brands began to compete fiercely in this area, as shown by the rapid growth of jewelry stores. There are 3 core factors of a jewelry retail business that help affirm competitive advantages (1) Production and supply management capacity, (2) Strong distribution system and (3) Supplier position Supreme. Factor (1) here includes a modern factory with outstanding capacity and production and supply management capacity. In addition, factor (1) also includes the design team and skilled labor. Owning a modern production line, a design team of 50 members and a force of artisans and jewelers of more than 1,000 people, every year, PNJ launches more than 4 million products to the market. From gold and silver jewelry to precious stones and diamonds. The current capacity of PNJ is 5 - 6 tons/year, only running 50 - 75% of the total supply capacity. With a maximum capacity of 8 tons/year, PNJ can completely supply to the market an additional 1.3 - 1.5 million products in the next 1-3 years, bringing the total supply capacity to over 6 million products/year. In terms of the entire market, PNJ's supply capacity far exceeds that of competitors in the same segment, ranking in the Top 10 factories with the largest 3|Page

capacity in Asia. This is the foundation for PNJ to reduce production costs per finished product and overwhelm the supply volume of competitors before the whole industry "moves" to increase capacity. Above all, when demand explodes, PNJ can completely increase capacity to reach the ceiling level or further increase capacity to take the lead in the industry. Meanwhile, factor (2) is a core thing when the retail system must be able to distribute to the widest customers. As of January 2021, PNJ currently has 339 stores and plans to open another 40-50 stores in the period 2020-2025 as well as expand the e-commerce segment. Broadly speaking, PNJ's store system is currently much superior to its nearest competitors, Bao Tin Minh Chau (BTMC) and DOJI. With 200 retail stores, BTMC is the most potential competitor that can threaten PNJ right now. However, the market situation was quite clear with BTMC only having a distribution system from Quang Tri, while PNJ had more than 80% of stores in the South. Further, when jewelry demand in Vietnam reaches the Asian average, there will be great room for both giants to increase their market share through strong distribution and supply chains. Going further, factor (3) is an important factor determining the success or failure of factors (1) and (2). The relationship between these three factors is complementary and intimate. Factor (3) focuses on the ability to control input costs and the ability to determine selling prices. However, it is not Doji or SJC that is the competitor that puts pressure on PNJ even though this brand has 13 stores. Unlike Doji or SJC, both PNJ and Diamond World are focused on innovation and retail promotion. The concentration of this market is still low, because more than 70% of the market belongs to small stores. A big piece of cake for two businesses to exploit, the opportunity will be divided equally if the business goes in the right direction. If PNJ has a strong advantage in the system, the retail jewelry firms will be more competitive in price. According to a survey on fashion consumption habits by Q&Me at the end of 2017, price is the most important factor in making purchasing decisions, accounting for 23%. According to a Nielsen study, the group of young people will reach 40 million people in the next decade and spend about 100 billion VND per year. Millennials target this customer, accounting for about 35% of Vietnam's population.

2. Financial statement analysis Data calculated by the excel file below

4|Page

PHUNHUAN JEWELRY JOINTSTOCK COMPANY

As at 31 December

As at 31 December 2018 ASSETS Currentassets

Cash Cash equivalents

Held-to-maturity investments

Short-term trade accounts receivables Short-term prepayments to suppliers Other short-term receivables Deficits in assets awaiting solution Inventories Inventories Othershort-termassets Short-term prepaid expenses Value added taxdeductibles Taxes & other receivables from theState budget Non-currentassets

Other long-term receivables Fixedassets Tangible fixed assets Historical cost Accumulated depreciation Intangible fixed assets Historical cost Accumulated amortization

Long-term construction inprogress

Equity investments in other entities Provision for long-term investments Otherlong-termassets Long-term prepaid expenses Deferred income taxassets TOTAL ASSETS

5|Page

2019

2017

2018

2019

LIABILITIES & OWNERS' EQUITY 100

3,896,141,901,410

5,405,256,600,641

110

175,208,552,187

206,721,179,629

95,224,439,008

111 112

111,158,552,187 64,050,000,000

206,721,179,629

95,224,439,008

7,333,364,485,251

-

-

120

160,065,000,000

-

123

160,065,000,000

-

-

130

84,622,464,067

155,196,257,825

129,688,313,476

131 132 136 139

39,946,216,659 33,682,107,963 10,858,761,425 135,378,020

57,664,060,443 57,981,679,202 39,159,008,338 391,509,842

48,292,876,716 74,867,455,343 5,287,941,028 1,240,040,389

140

3,401,959,226,624

4,968,145,942,990

7,030,420,371,216

141

3,401,959,226,624

4,968,145,942,990

7,030,420,371,216

150

74,286,658,532

75,193,220,197

78,031,361,551

151 152 153

69,117,536,788 28,174,789 5,140,946,955

68,191,416,708 625,511,019 6,376,292,470

71,633,378,895 6,306,692,920 91,289,736

200

675,158,254,081

1,032,638,955,963

1,269,599,936,565

210

42,787,737,738

57,498,444,869

70,721,623,109

216

42,787,737,738

57,498,444,869

70,721,623,109

220

487,243,774,697

719,287,274,744

923,870,354,474

LIABILITIES

300

1,542,697,241,029

2,692,822,128,700

4,025,698,610,469

Current liabilities

310

1,488,758,034,029

2,677,317,785,700

4,017,860,824,469

311 312 313 314 315 319 320 322

278,898,463,294 37,773,098,354 117,206,887,902 99,466,563,099 4,629,017,766 52,071,661,615 846,278,850,200 52,433,491,799

342,676,925,196 82,798,544,221 153,579,308,096 228,337,052,181 10,833,940,595 237,629,562,960 1,558,482,498,026 62,979,954,425

690,808,185,195 95,353,052,369 192,682,671,178 222,296,091,737 45,877,630,688 69,257,739,996 2,610,902,622,222 90,682,831,084

330

53,939,207,000

15,504,343,000

7,837,786,000

337 338 342

628,026,000 46,234,864,000 7,076,317,000

628,026,000 7,800,000,000 7,076,317,000

476,006,000 3,700,000,000 3,661,780,000

OWNERS'EQUITY

400

3,028,602,914,462

3,745,073,427,904

4,577,265,811,347

Capital&reserves

410

3,028,602,914,462

3,745,073,427,904

4,577,265,811,347

411 412 415 418 421 412a 421b

1,081,020,340,000 876,761,282,458 (7,090,000) 220,087,556,918 850,740,825,086 233,985,702,026 616,755,123,060

1,670,029,820,000 925,397,862,458 (7,090,000) 265,087,556,918 884,565,278,528 98,780,546,381 785,784,732,147

440

4,571,300,155,491

6,437,895,556,604

Short-term trade accounts payables Short-term prepayments from customers Taxes & other payables from theStatebudget Payables to employees Short-term accrued expenses Other short-term payables Short-term loans Bonus &welfare funds Non-current liabilities Other long-term payables Long-term loans Provisionfor long-term liabilities

221 222 223 227 228 229

205,748,326,607 396,615,581,684 (190,867,255,077) 281,495,448,090 286,740,907,873 (5,245,459,783)

225,960,569,846 454,178,423,940 (228,217,854,094) 493,326,704,898 499,937,407,873 (6,610,702,975)

263,827,234,353 534,818,699,342 (270,991,464,989) 660,043,120,121 679,619,883,005 (19,576,762,884)

240

9,665,078,966

70,822,681,154

28,457,398,434

242

9,665,078,966

70,822,681,154

28,457,398,434

250

-

-

-

253 254

395,271,613,400 (395,271,613,400)

395,271,613,400 (395,271,613,400)

395,271,613,400 (395,271,613,400)

260

135,461,662,680

185,030,555,196

246,550,560,548

261 262

53,968,320,576 81,493,342,104

99,678,730,358 85,351,824,838

158,318,980,481 88,231,580,067

270

4,571,300,155,491

6,437,895,556,604

8,602,964,421,816

Owners' capital Share premium Treasury shares Investment & development fund Retainedearnings -Retained earnings accumulated to the prior year end -Retained earnings of thecurrent year TOTAL LIABILITIES & OWNERS' EQUITY

2,252,935,850,000 968,074,112,458 (2,101,090,000) 313,083,556,918 1,045,273,381,971 29,482,225,528 1,015,791,156,443 8,602,964,421,816

PHUNHUAN JEWELRY JOINTSTOCK COMPANY

Year ended 31 December Netsales

Grossprofit Financial income Financial expenses Including: Interest expense Selling expenses General and administration expenses Netoperatingprofit(EBIT) Other income Other expenses Resultsofotheractivities Net income before tax Business incometax-current Business incometax-deferred Net income after tax

2017 14,571,135,744,850 (9,064,872,939,048)

(11,792,052,183,391)

1,911,963,950,916

2,779,083,561,459

8,794,872,100 (56,475,629,564) (54,981,032,499) (774,978,169,326) (187,936,351,549)

6,846,027,091 (66,345,864,211) (61,109,042,390) (1,170,069,069,426) (345,868,153,940)

901,368,672,577

1,203,646,500,973

7,394,867,935 (1,384,144,655)

4,637,809,502 (2,734,037,354)

6,010,723,280

1,903,772,148

907,379,395,857

1,205,550,273,121

(182,038,883,247)

(249,485,408,708)

(484,064,550)

3,858,482,734

724,856,448,060

959,923,347,147

724,856,448,060

959,923,347,147

Atributable to:

Earningspershare Diluted earnings pershare

6|Page

6,434

6,481

6,434

6,481

17,000,681,080,523

2,879,755,229

PHUNHUAN JEWELRY JOINTSTOCK COMPANY (Indirect method) Year ended 31 December 2018 1,205,550,273,121 42,101,648,087 (169,041,343) (7,406,944,577) 61,109,042,390 (86,037,746,014) (1,566,186,716,366) 412,203,203,546 (44,784,289,702) (60,443,657,529) (231,958,086,112) (26,117,591,079) (302,139,905,578)

(336,378,415,370) 1,075,665,048 160,065,000,000 6,331,279,529 (168,906,470,793)

97,273,160,000 4,320,772,043,080 (3,647,003,259,254) (268,371,812,300) 502,670,131,526 31,623,755,155 175,208,552,187 (111,127,713) 206,721,179,629

7|Page

3. Financial ratios 3.1 Liquidity ratios Table of the liquidity ratios of PNJ for the period of 2017-2019 Value

Cash ratio Current ratio Quick ratio

2017 0.12 2.62 0.33

2018 0.08 2.02 0.16

with2017

with2018

2019 Absolute(+/-) Absolute(+/-) 0.02 (0.04) (0.05) 1.83 (0.60) (0.19) 0.08 (0.17) (0.09)

Cash ratio is the ratio to measure the amount of money currently available at the company to cover all short-term liabilities. This ratio immediately indicates the financial crisis of the company. Calculating by the formula: Cash ratio =

Cash & cash equivalents Current liabilities

In 2017, the cash ratio of the firm was 0.12, in 2018 decreased by 0.04 to 0.08 and in 2019 continued to decrease 0.05 to 0.02. This shows that the company's ability to pay cash is declining. Current ratio is the ratio to measure the amount of money currently available at the company to cover all short-term liabilities. The current ratio shows the correlation between current assets and current liabilities, is a widely used measure. The current ratio indicates how many short-term assets each company uses for its short-term debt. Calculating by the formula: Current ratio =

Current assets Short -term debt

In 2017, this index was 2.62. By 2018, it has decreased by 0.6 to 2.02. The year 2019 continued to decrease by 0.19 compared to 2018, to 1.83. The corporate current ratio in three years, though decreasing, is greater than 1, proving that the company's short-term assets are capable of paying short-term debts and this will increase the company's reputation with creditors. 8|Page

Quick ratio illustrates the firm's true ability to pay its debts against shortterm debts. However, in reality, many short-term assets have lower liquidity than inventories, so this ratio is not effective. Calculating by the formula: Quick ratio =

Curren tassets − Inventories Short -term debt

The company's quick solvency in 2017 was 0.33 and decreased from 0.17 to 0.17 in 2018. By 2019, this index continues to decrease by 0.09 to only 0.08. PNJ's LIQUIDITY RATIOS In three year 2017 - 2018 - 2019 2.8

2.62

2.4 2.02 2

1.83

1.6

1.2

0.8 0.33

0.4

0.16

0.12

0.08

2017

2018

0.08 0.02

0 Cash ratio

Current ratio

2019 Quick ratio

In general, liquidity indices decreased continuously in 2018 and 2019, showing that the liquidity of PNJ's short-term debts is going down. In particular, the two ratios of Cash ratio and Quick ratio are very low (below 1), indicating that enterprises are in a quite dangerous debt situation due to the lack of ability to meet short-term obligations with The most liquid asset. However, the current ratio is still kept at steep high (1.83), showing that the company is still in a good liquidity position due to its large inventory, which is suitable for the characteristics of its business, jewelry.

9|Page

3.2 Efficiency ratios Table of the efficiency ratios of PNJ for the period of 2017-2019 Value

Inventory turnover Total assets turnover Accounts receivable turnover ay's sales in inventory (days) Day's sales outstanding (days)

2017 2.66 2.40 274.79 136.98 1.33

2018 2.37 2.26 252.69 153.78 1.44

with2017

with2018

2019 Absolute(+/-) Absolute(+/-) 1.93 (0.29) (0.45) 1.98 (0.14) (0.29) 352.03 (22.10) 99.34 189.52 16.80 35.74 1.04 0.12 (0.41)

Inventory turnover indicates the relationship between inventory and cost of goods sold in a period. Used to evaluate the effectiveness of a company's inventory management. This index shows the average number of inventory rotation how many periods to generate revenue. Calculating by the formula: Inventory turnover =