TUONG AN OVERVIEW
General Information
Address: No 138-142 Hai Ba Trung Street,
Da Kao Ward, District 1, Ho Chi Minh, Vietnam
Email: tuongan@tuongan.com.vn
Website: www.tuongan.com.vn
Establishment and development history
1977 Established in 1977, Tuong An has been a trademark associated with all generations of Vietnamese families for the past 42 years.
1986 After being empowered to self-supervise production and business activities, plus the completion of a new production facility, Tuong An quickly expanded its development between
In the late 1990s, Tuong An encountered significant challenges due to global economic integration and intense competition from imported avocado and vegetable oil brands To address these challenges, Tuong An adopted a flexible and creative approach to consumer engagement, focusing on raising awareness about the benefits of nutritional cooking oil The company launched a range of new products fortified with micronutrients, utilized high-quality raw materials, and increased the production of bottled refined cooking oil to meet the demands of the domestic market.
In October 1991, Tuong An Cooking Oil was officially launched, quickly becoming the flagship product of the company and establishing Tuong An as the market leader in edible oil production in Vietnam Today, Tuong An cooking oil maintains its dominant market share and continues to be a trusted choice among consumers.
In December 2003, the Company initiated an experimental study to enhance edible oil products by incorporating micronutrients This included pure soybean oil, which is beneficial for heart health, and ViO oil, enriched with nutrients from Gac fruit oil, promoting brain development and supporting skin, eye, and heart health in children.
Tuong An is committed to becoming a leader in the essential food market by providing nutritious, safe, and high-quality products for millions of Vietnamese families With a focus on sustainability and preserving core values, Tuong An has built a strong connection with the Vietnamese people over the past 42 years, establishing itself as a "national brand." Dedicated to enhancing the happiness of every meal, Tuong An continues to strive for excellence in its offerings while ensuring affordability for consumers.
Organization and human resources
As of December 31, 2019, Tuong An employed a total of 1,407 individuals Recognizing the significance of a large and expanding workforce, the Board of Directors and Board of Management prioritize human resource development, viewing it as essential to the company's success and operational efficiency.
Nguyen Thi Hanh Tran Le Nguyen
Le Thi My VanNguyen Thi Thanh Van
Corporate structure
Tuong An plays a vital role in the packaged food sector, enhancing KIDO Group's distribution platform To meet its objectives, it is essential for the management systems of its member units to be closely integrated, ensuring that consumers receive the right products with the appropriate specifications, delivered at the right location and time.
Each company is guided by the Executive Management Committee (EMC), which oversees the implementation of the Group's strategic goals and promotes business performance at the unit.
Tuong An operates under a three-team structure, providing various support services to its member companies The primary objective of the Group is to achieve a harmonious balance between long-term and short-term goals.
Tuong An owns 2 large-scale factories: Phu My Oil Factory (80,000m2) and Dau Vinh Factory(37,000m2).
Vision & Mission
Vision: The Vietnamese brand is the most popular of the delicious dishes that help nurture and unite the happiness of the Vietnamese family.
Tuong An is dedicated to providing the highest quality of delicious and healthy food to the community and every Vietnamese family, demonstrating a strong commitment to understanding, responsibility, and care for people and society.
BUSINESS STRATEGY ANALYSIS
Industry Analysis
In the national cooking oil market, Tuong An and Neptune dominate, with both brands holding a significant share Tuong An faces stiff competition from Neptune, making it a key player in this competitive landscape.
Neptune, produced by Cai Lan Vegetable Oil Company under KUOK OILs & GRAINS PTE, has recently entered the Vietnamese market, following Tuong An With a diverse range of products and strong financial backing, Neptune actively promotes its brand through television advertising, cooking lessons, and food manuals in newspapers Additionally, Neptune's competitive pricing makes it accessible to a wide consumer base, presenting a significant challenge for Tuong An.
Tuong An faces significant competition in the Vietnamese cooking oil market, sharing space with both domestic brands like Tan Binh, Vinadaco, and Marvela, as well as foreign products such as Ship, Floria, and Sun Flower These competitors are gaining traction, particularly among low-income consumers, due to their high quality and affordability While imported oils boast attractive packaging and a diverse range of options, their higher prices still appeal to many buyers Consequently, Tuong An's market share is limited, highlighting the competitive landscape in which it operates.
About conversion costs (costs that customers want to convert their shopping to other suppliers): easy to change without any cost.
In particular, in the Vietnamese market, the psychology of preferring to use imported goods and the ASEAN tax preferential policy, the selling price is almost equal.
The choice and replacement of products is not difficult so the threat of new entrants is not small. c) Threat of substitute products:
Living conditions improved, so people look for more advanced products or products from abroad In contrast, low-income people: Find cheaper products when the same volume of bottle.
Tuong An faces competition in the market from various products, including cheese butter and sauces For instance, consumers are increasingly opting to mix salads with cheese instead of traditional oil, highlighting the diverse choices available.
To lower the fat content in meals, many individuals opt for a versatile non-stick pan that allows for frying without the need for vegetable oil However, this method is only a temporary solution and is not suitable for long-term cooking.
Therefore, Tuong An's products still retain their market value. d) Buyer’s power:
The food market in Vietnam is projected to grow steadily, driven by rising disposable incomes As the quality of life improves, Vietnamese consumers are increasingly prioritizing their health, leading to a greater focus on nutritious food choices.
In 2018, Vietnam's cooking oil market generated impressive revenue of 25,000 billion VND; however, the country's edible oil consumption still lags behind that of other regional nations The oil industry is projected to experience continued growth over the next five years.
Is one of the big manufacturing cooking oil companies Vietnamese, Tuong An is taking advantage of great opportunity to capture the potential of the industry.
When income increases, people's living standards are improved and the demand for cooking oil is required of the people will get bigger and bigger. e) Supplier’s power:
The main input is raw vegetable oils produced from oil fruits and seeds, of which palm and soy beans are the two most used nuts (about 60% and 30%).
For cooking oil industry, source of auxiliary production materials large dependence on imports from abroad, mainly from Malaysia and Indonesia (accounting for nearly 80%).
The ability to negotiate with suppliers is very low.
Tuong An has yet to identify a primary oil-bearing tree suitable for large-scale cultivation, which hampers its ability to secure a reliable source of raw materials.
Competitive Strategy Analysis
TAC's competitive strategy effectively blends cost leadership with differentiation, aiming to provide high-quality, delicious, and healthy food products The company's mission emphasizes its commitment to the community and Vietnamese families, highlighting its dedication to responsibility and understanding of societal needs Additionally, TAC operates an eco-friendly factory, reinforcing its commitment to sustainable practices in food production.
Phu My factory, the largest vegetable oil manufacturing facility of TAC, is recognized as one of the most environmentally friendly factories in Vietnam, with green coverage comprising 40% of its total area.
For nearly 40 years, TAC has prioritized both affordability and quality in its cooking oils, offering competitive prices that appeal to a wide range of customers For instance, TAC's soybean oil is priced at approximately 36,000 VND per liter, significantly lower than Simply's offering, which exceeds 40,000 VND This commitment to reasonable pricing ensures that customers can access high-quality products Additionally, TAC employs advanced production systems that operate continuously and are controlled by PLC and computer systems, guaranteeing optimal quality while preserving essential vitamins A and E in the oil Ultimately, TAC recognizes that its workforce is a vital component in maintaining these high standards.
At TAC, our commitment to excellence is driven not only by cutting-edge technology but also by our skilled workforce, whose extensive experience and strong ethical values play a crucial role in our mission We prioritize continuous professional development through regular training courses, ensuring our staff stays abreast of the latest market trends This approach enables us to deliver innovative solutions that optimize production processes while effectively reducing costs, ultimately enhancing our product efficiency.
TAC has achieved a remarkable breakthrough by seamlessly blending technology with human essence, resulting in high-quality products at competitive prices that elevate Vietnamese meals The company continually diversifies and enhances its offerings while striving to keep prices affordable, which has allowed TAC to win the hearts of a significant number of Vietnamese consumers.
Corporate Strategy Analysis
For Tuong An Company, its core business is cooking oil.
Tuong An is enhancing its collaboration with partners to diversify its product portfolio, emphasizing the delivery of quality products that cater to daily food needs The company employs two key strategies to achieve this goal: distributing branded products from strategic partners and offering OEM products under the Kido Group brand This ongoing research and diversification of products will help Tuong An build consumer trust and secure shelf space at retail locations.
Tuong An has successfully implemented its packaged food strategy by leveraging an efficient distribution system, enabling the rapid and cost-effective launch of new products This expansion includes a variety of items such as refined sugar, snack noodles, instant noodles, and sauces, in addition to their existing cooking oil offerings.
SWOT Analysis
1 Labor level meets production needs.
2 Employee income at a reasonable level.
4 Strong brand identity and good reputation.
1 Qualifications of managers are not flexible.
3 Form of packaging design is not attractive.
5 Materials are mostly imported from abroad
1 Macroeconomic policies were signed with trade agreements (WTO,
ATIGA VJEPA, AANZFTA) expanding export markets.
4 Bank interest rates are reasonable.
6 Government support: developing domestic raw material areas.
7 Buyers’ purchasing power is increasing.
8 The market potential increases in the future.
9 Consumers' tastes are running towards good quality products for their health.
Product development strategy (with creating a new premium product line that stands out from competitors to meet needs and tastes).
1 W3,4 + O6, 7: Market penetration strategy (Enhancing advertising activities, promotions, changing packaging design to create a new impression for the brand).
2 W1,5 + O6,7,8: Joint Ventures (looking for new supply).
3 W1 + O1,7,8: strategy development strategy planning capabilities.
4 W5 + O4,6,7,8: Backward integration strategy (diversify sources of input materials).
1 The exchange rate tends to increase.
2 Instability of the stock market.
3 Competitive pressure from the schedule of reducing cooking oil import tax to 0%.
4 Pressure of raw material supply.
5 The current and potential strong rivals: high level of competition.
1 S1,2,3,4,8,11,12 + T3,5: Product development strategy (Focusing on promoting a new premium product line, outstanding quality for compete with rivals).
2 S3,4,11 + T1,3,4,5: Strategy of integration in horizontal lines- acquisition (acquiring smaller companies in the same industry to increase market share).
3 S3 + T1,3,4,5: Backward integration strategy (diversify and develop its own material areas).
1 W1,2,3 + T2,3,4,5,6: decline strategy (regulating organizational structure
&management, eliminating products that are not competitive in the market).
2 W5 + T1,3,4,5: Joint Ventures (looking for new supply).
3 W1,2,3,4 + T1,2,3,5: Strategy of integration in horizontal lines(merging powerful companies to increase their resilience to the fiercely competitive market).
PEST Analysis
The Government ended the safeguard tariff on imported oil, leading to the influx of imported goods, putting competition pressure on domestic companies. b) Economic analysis
The Vietnamese cooking oil industry is experiencing significant growth, attracting both foreign and domestic businesses due to its vast development potential With cooking oil being a readily substitutable product, the market exhibits high price elasticity, meaning that even minor price fluctuations can lead to notable shifts in consumer behavior Consequently, this has resulted in intense competitive pressure within the industry.
Vietnam's growing population and shifting consumption trends are driving a heightened demand for health-conscious products, particularly in the cooking oil sector This rising interest in healthier options is leading to increased diversity within the cooking oil industry, as consumers seek out better alternatives.
The rapid development of science and technology plays an important role in improving labor productivity, contributing to increasing production efficiency.
Besides, oil production technology is not too complicated, so the cost of production and the price of oil is not too high.
ACCOUNTING ANALYSIS
Identifying Key Accounting Policies
The primary objective of accounting analysis is to pinpoint key accounting policies that accurately reflect a firm's success and associated risk factors TAOIL, a leader in the essential food sector, emphasizes critical success factors such as effective material planning, raw material supply regulation, and inventory optimization to ensure stable prices and sufficient goods for consumers Additionally, TAOIL is committed to product advancement and diversification, focusing on high nutritional value to cater to health-conscious consumers The company invests in research and development to create micronutrient-enriched products that enhance the health and immune systems of Vietnamese consumers, addressing specialized health care needs.
Inventories are recorded at the lower of their acquisition cost or net realizable value, which is determined by the estimated selling price under normal business conditions, minus the anticipated costs to complete and sell the inventory.
The perpetual method is used to record inventories, which are valued as follows:
Raw materials, consumables and goods for resale.
Actual cost on a weighted average basis.
Finished goods and work in process.
Cost of direct materials and labor plus attributable overhead based on the normal level of activities.
An inventory provision is established to account for potential losses from the impairment of raw materials, finished goods, and other inventories owned by the Group, based on evidence of impairment at the balance sheet date Adjustments to this provision are reflected in the cost of goods sold in the consolidated income statement.
Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, after provision for doubtful receivables.
The provision for doubtful receivables reflects outstanding amounts that may not be collectible at the balance sheet date, with any adjustments to this provision impacting the general and administration expense in the consolidated income statement Additionally, tangible fixed assets and construction in progress play a crucial role in a company's financial health and operational capacity.
Tangible fixed assets are recorded at their cost minus accumulated depreciation, which includes the purchase price and any direct costs necessary to prepare the asset for use Additions and improvements are capitalized, increasing the asset's carrying amount, while maintenance and repair costs are expensed in the consolidated income statement as incurred Upon the sale or retirement of tangible fixed assets, any resulting gain or loss—calculated as the difference between net disposal proceeds and the asset's carrying amount—is reflected in the consolidated income statement.
Construction in progress refers to tangible fixed assets that are under development and are recorded at their cost, which encompasses expenses related to plant construction, equipment installation, and other direct costs These assets are not subject to depreciation until they are completed and ready for use.
The policies and estimates employed for recording research and development (R&D) expenses align with accounting standards and the specific characteristics of the firm However, the evaluation and documentation of R&D expenses present challenges due to the difficulty in accurately determining these costs.
Borrowing costs, which include interest and related expenses incurred by the Group, are recognized as expenses in the year they occur unless they are capitalized Specifically, borrowing costs that are directly linked to the acquisition, construction, or production of an asset requiring a significant period to prepare for its intended use or sale are capitalized as part of the asset's cost.
Revenue from the sale of goods is recognized only when five specific conditions are met, as outlined in Article 79 of Circular 200/2014/TT-BTC The Group emphasizes that revenue will not be recognized if there are significant uncertainties concerning the collection of payment or the potential return of goods.
Under the circumstances, revenue is recognized based on principle of “substance over form” and allocated to each sales obligation.
Revenue is recognized when it is likely that economic benefits will flow to the Group and can be reliably measured It is measured at the fair value of the consideration received or expected, excluding any trade discounts, rebates, or sales returns Additionally, specific recognition criteria must be satisfied prior to acknowledging revenue.
Sale of goods: Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually upon the delivery of the goods.
Rendering of services: Revenue is recognized when service is rendered and completed.
Interest: Revenue is recognized as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt.
Dividends: Income is recognized when the Group’s entitlement as an investor to receive dividends is established g) Segment information
A segment is a distinct component identified by the Group that offers products or related services, known as a business segment, or operates within a specific economic environment, referred to as a geographical segment Each segment faces unique risks and returns that differentiate it from other segments.
Assess Accounting Flexibility
To tangible fixed assets, TAC uses flexible estimate accounting for computing on a straight-line over the estimated useful lives of tangible fixed assets as follows:
Buildings and structures 10 years 6 - 50 years
Machinery and equipment 5 - 10 years 5 - 25 years
Means of transportation 6 – 10 years 6 – 12 years
Class, there are still many different types of assets with different useful lifetime and therefore it correctly reflects the nature of the use of property.
TAC utilizes a perpetual inventory system, determining inventory costs based on a weighted average method, which is particularly suitable for manufacturing companies where materials are frequently mixed This approach simplifies inventory management, as it becomes challenging to differentiate between older and newer materials Moreover, the flexibility in accounting data allows managers to tailor information to their specific needs, enhancing decision-making processes.
It is necessary for managers to give the flexibility in revenue policies to help easily create success for the company by their judging ability.
Certain policies lack flexibility, particularly in the evaluation and recording of R&D expenses, as per VAS guidelines that require R&D and marketing expenditures to be expensed In contrast, software development costs can be capitalized This creates challenges for managers who struggle to assess future economic benefits, resulting in insufficient information for effective decision-making.
Evaluate Accounting Strategy
The primary focus of TAC is the production of vegetable oil, and its accounting policies closely align with those of its competitors in the industry Consequently, the strategies implemented in recent years, particularly those of the Marvela branch, are deemed to be appropriate and effective.
Mrs Nguyen Thi Hanh has served as the deputy general director and chairman of the board of directors since June 8, 2017 As of May 2020, she owned 15,000 shares of TAC, representing 0.4% of the company and valued at 0.4 billion VND Her leadership aims to effectively align the interests of both the board of directors and executive management, minimizing potential agency costs.
TAC's accounting policies have remained consistent for over four years, aligning with industry standards in the vegetable oil sector Recent financial statements show no substantial adjustments to revenues or estimates, and there is no evidence of significant manipulation in quarterly reports aimed at artificially inflating revenues or reducing expenses.
Evaluate Quality of Disclosure
Transparent information presentation in annual reports is crucial for listed companies TAC stands out among competitors by providing superior disclosure quality, clearly outlining occupations, business fields, geographical areas, orientations, objectives, and production types as of 2020 Additionally, TAC ensures that accounting policies are published distinctly, comprehensively, and reasonably.
The corporation announced specific oriented targets at the beginning of each operating years Besides, TAC also published precise information about stocks and transactions.
The corporation provided a concise overview of its operations, detailing accounting policies and assumptions in footnotes Through its annual reports, TAC effectively communicated its business strategies, offering both internal and external stakeholders a clear understanding of its development and operational status.
TAC has outlined the potential risks the company may face in the future while also identifying strategies to mitigate them This proactive approach enables investors to access comprehensive and informative reports, empowering them to make informed investment decisions in the manufacturing sector.
TAC's commendable voluntary information disclosure reflects its significant profit increase in the first quarter compared to the previous year This impressive performance announcement is likely to attract more investors, customers, and suppliers.
Identify Potential Red Flags
The total assets turnover ratio for Tuong An is currently low, indicating inefficiencies in inventory and production management A significant portion of their total assets is tied up in inventory, suggesting potential issues such as excess stock, unsold products, or idle assets These factors could negatively impact product quality, diminish product value, and ultimately reduce gross profit.
Net Sales / Net Accounts Receivable
Tuong An experienced a significant decline in its receivables turnover between 2017 and 2018, with the debt recovery rate dropping to 6.62 in 2018 This low recovery rate has led to an increase in appropriated funds, indicating potential cash flow inadequacies As a result, the company may face challenges in financing its working capital for production and could be compelled to seek borrowing to address this financial shortfall.
Undo Accounting Distortions
An evaluation of Tuong An's audited financial statements reveals no accounting distortions, ensuring that the financial data is both complete and accurate This reliability facilitates effective analysis and evaluation of the company's financial health.
Analysis of the Statement of Financial Position/ Balance Sheet
a) Financial Structures of WC/WCN/NC
Tuong An Vegetable Oil Joint Stock Company (TAC)
BO 458,840,375,653 551,234,673,057 320,563,610,411 350,523,774,208 Total shareholders’ equity and liabilities
Tan Binh Vegetable Oil Joint Stock Company (NKDC)
Total shareholders’ equity and liabilities
Case 1 2 1 1 b) Comparative analysis of TAC and NKDC
TAC's financial structure, categorized as case 2, is typical for manufacturing companies, indicating a lower risk in capital costs compared to its competitor NKDC, which follows case 1 This strategic positioning allows TAC to manage financial risks more effectively.
TAC’s net cash of 4 latest year is less than 0, this means TAC use long-term sources to invest in short term activities. c) Statement of financial structure
Analysis of statement of cash flow
Net cash provided by operating activities 115,907 -254,220 336,500 86,107
Acquisitions of fixed assets (tangible and intangible) -14,669 -24,166 -10,932 -10,069
Proceeds from sale of fixed asset 9,928 2,696 30 0
Proceeds from sale of held to maturity investments 3,840
Proceeds from issuance of shares and receipt of contributed capital 33,560
Net increase in cash and cash equivalent -500,910 -302,428 -55,517 -99,953
Tuong An Company (TAC)’s excess cash flow in 2018 is less than 0 while the 3 previous years are all more than 0.
TAC’s available cash flow in the 4 latest year are all more than 0.
TAC’s free cash flow in the 4 latest year are all less than 0.
Mainly the company's cash generated from operating activities and not investment and financing activities.
In 2019, negative cash flows from investment activities indicated the scale of business expansion, as income was lower than expenditures This situation arose from proceeds from the sale of fixed assets and returns on financial investments being insufficient to cover the expenses incurred for purchasing new fixed assets and expanding investments.
FINANCIAL ANALYSIS
Common-size analysis
TAC, as a manufacturing firm, has a significant proportion of inventory and fixed assets Additionally, due to the nature of the food industry, where customers often delay payment for their purchases, there is a considerable amount of short-term receivables.
Income from financial activities not significant not significant
Financial costs not significant not significant
Interest expenses not significant not significant
Gains not significant not significant
Losses not significant not significant
Other profits not significant not significant
Current income tax charge not significant not significant
Deferred income tax charge not significant not significant
Tuong An Company has enhanced its production efficiency, resulting in a reduction in the cost of goods sold Despite an increase in other expenses, including selling and administrative costs, the company has still experienced growth in profit after tax.
In 2019, long-term assets receivables and long-term assets in progress of TAC has increased really quickly because TAC may expand the business and develop efficiently.
Amount of change % of change
Net profit from operating activities 1,506,216 1,203,647 302,569 25.1%
In 2019, net revenues of TAC increased 16.8%, profit after tax increased 24.4% Profit before tax in 2019 was more than 1,000 billion dongs Gross profit has increased continiously annual year.
Analysis of Profitability
The net profit margin is a crucial indicator of a company's financial health, reflecting the percentage of sales that translates into net income after expenses Analyzing the net profit margin allows companies to evaluate their practices and predict future profits From 2016 to 2018, TAC experienced a significant increase in net sales and net income, positively impacting its performance Notably, the net profit margin rose by 1.38% in 2017, driven by increased net income However, in 2018, the margin decreased from 3.06% to 2.46% due to strategic sales adjustments aimed at enhancing competitiveness In 2019, TAC achieved an impressive net profit margin of 3.29%, demonstrating that it can enhance profitability by managing expenses and reducing the cost of sales.
Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Average Total Assets 1,883,410,708,253 1,801,809,089,681 1,380,959,391,725 1,209,932,489,273
The total asset turnover ratio is a key metric that indicates a company's efficiency in utilizing its assets to generate sales, with a higher ratio being more advantageous This general efficiency ratio provides insights to investors and creditors regarding a firm's operational effectiveness For instance, a decline in the ratio from 3.14% to 2.45% can be attributed to the company's sales strategy, which involved lowering prices to attract more customers, even as asset levels continued to rise.
The return on assets (ROA) is a key profitability ratio that evaluates how effectively a company utilizes its total assets to generate net income over a specific period By comparing net income to average total assets, ROA provides insights into a company's efficiency in converting asset investments into profits This ratio is crucial for both management and investors, as it reflects the company's ability to generate revenue from its capital assets, which are often the largest investments For instance, while there was a significant investment in assets in 2019, the overall ROA figures have remained stable over the years, indicating consistent performance without major fluctuations.
DuPont analysis is a key component of profitability ratio analysis used to evaluate a firm's financial performance It assesses profitability through essential ratios, including return on assets, return on equity, net profit margin, total asset turnover, and financial leverage.
The operating income margin of 7.23% reflects strong growth, particularly when considered within the broader context of the industry This impressive figure indicates a high net profit margin generated from revenues, showcasing exceptional business competence.
Operating Income 163,477,673,869 133,282,551,791 159,577,393,116 81,828,848,263 Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Operating Income
The operating margin ratio, or operating profit margin, is a key profitability metric that indicates the percentage of total revenues generated by operating income.
TAC’s operating income in 2018 is 163,477 million (Net sales – all operating expenses).
TAC's operating margin stands at 3.94%, indicating that out of every million dongs in sales, approximately 96.06 dongs are allocated to variable costs, leaving just 3.94 dongs to address non-operating expenses and fixed costs Additionally, the company's figures have shown growth in its return on operating assets.
Return on assets (ROA) measures a company's efficiency in generating revenue from its operational activities To calculate this metric, experts compare the net income over a specific period with the current value of the assets employed in those operations.
In 2019, TAC achieved a return of 7.87%, indicating that for every million dongs invested in operating equipment, the company earned nearly 8 dongs The return on assets (ROA) showed significant improvement from 5.61% in 2016 to 8.47% in 2017, reflecting a sound investment policy during that period However, ROA experienced a decline in 2018, dropping to 5.35%, before rebounding to 7.87% in 2019, highlighting the importance of maintaining a strong ROA for optimal performance.
Average Operating AssetsROA %) g) Operating Assets Turnover
Return on Operating Assets is a key financial ratio that measures how effectively a company utilizes its revenue-generating assets in its ongoing operations A higher operating assets turnover ratio signifies efficient utilization of funds invested in current assets, reflecting the company's ability to generate revenue from its operational resources.
From 2015 to 2018, the company's ratios were consistently high and acceptable, although a decline was observed from 2016 to 2018, followed by an increase in 2019 The average ratio remained stable at approximately 2.5, attributed to a stronger growth in operating assets compared to net sales However, a significant decline in assets in 2019 resulted in an increase in this ratio It is crucial to ensure that profits exceed the costs associated with larger current asset levels, emphasizing the importance of maintaining an appropriate balance of operating assets relative to the company's turnover.
The sales to fixed assets ratio, or fixed assets turnover ratio, is a key performance metric that assesses how effectively a company utilizes its fixed assets to generate revenue A higher ratio indicates greater efficiency in converting fixed assets into sales revenue.
Over a four-year period, TAC experienced a substantial increase in its performance, rising from 28.82 to 51.96 By 2019, the ratio reached 51.96, indicating that TAC generated approximately 51.96 dong in revenue for every dong invested in fixed assets This demonstrates a strong return for the vegetable oil company.
The return on equity (ROE) ratio is a key profitability metric that assesses a company's ability to generate earnings from shareholder investments, providing insight into its financial performance and efficiency By calculating the ROE, investors can determine how much profit is generated per dollar of common stockholders' equity, allowing for a more informed evaluation of a company's profitability and potential for growth.
Over 4 years, from 2016 to 2019, the ROE percentages showed a growing trend by over 6% from 13.76.91% to 20.14%, respectively The ROE of TAC is rather appreciated, with the average for
4 years at 16% Because the ratios fluctuated over years, it illustrated that the company do not operate really well Falling ROE in 2018 is usually a problem.
In 2018, the company's rising Return on Equity (ROE) of 20.14% demonstrated its enhanced ability to generate profits with less capital investment, reflecting effective management in utilizing shareholders' equity A higher ROE signifies improved financial performance and operational efficiency.
Gross Profit 661,559,739,524 562,248,951,008 563,846,389,919 374,168,116,619 Net Sales 4,142,183,115,574 4,408,696,880,121 4,337,772,721,063 3,977,927,992,052 Gross Profit
Gross ProfitNet SalesGross Profit Margin (%)