HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAM - - UNDERGRADUATE THESIS ANALYSIS OF THE MANAGEMENT AND USING THE WORKING CAPITAL IN LTD HÙNG HÀ TRẦN THỊ HUYỀN TRANG Academic year 2010 - 2015 HUE UNIVERSITY COLLEGE OF ECONOMICS THE ADVANCED PROGRAM - - UNDERGRADUATE THESIS ANALYSIS OF THE MANAGEMENT AND USING THE WORKING CAPITAL IN LTD HÙNG HÀ Name of student: Name of supervisor: Trần Thị Huyền Trang Lê Tô Minh Tâm Class: K44-Agricultural Economics-Finance Academic year: 2010 - 2015 Hue, June 2015 Thanks The school and the family always wants us to study, research and effectively applied to practical life Work completed thesis was initially experiment on combining theory and practice in the university environment, the personal effort and the help of many people So the result has been the economic bachelor thesis following is indispensable the most sincere gratefulness First of all, I would like to thank my teachers in school Hue University of Economics, thank the teachers teaching with useful knowledge and valuable experience applied to the subject and above all the riches knowledge baggage for us on the way of my career In particular, I would like to thank to Mr Truong Quang Dung - who directly guided me throughout the process of thesis with words of enthusiastic comments Thank leadership in Hùng Hà that provided an opportunity for me to practice at the unit; Thank , accountants who helped me so much during practicing and collecting documents for research subjects Đồng Hới, June 2015 Student Trần Thị Huyền Trang INDEX Trang INTRODUCTION Chapter 1: RATIONALE FOR THE USE OF WORKING CAPITAL IN ENTERPRISES 10 1.1 Working capital in enterprises 10 1.1.1 The concept and characteristics of working capital in the enterprise 10 1.1.2 Characteristics of working capital 11 1.1.3 Classification and structure of of working capital 12 1.1.4 The role of working capital 15 1.2 Efficiency use of working capital 16 1.2.1 The concept of efficiency in working capital 16 1.2.2.1 The objective factors 16 1.2.2.2 The subjective factor 16 1.2.3 A means of enhancing efficiency in working capital 17 1.2.4 The evaluation criteria efficiency using in working capital 18 1.2.4.1 Rotated speed of working capital 18 1.2.4.2 The level of savings working capital .18 1.2.4.3 The level of undertake in working capital 19 1.2.4.4 The rate of return of working capital .19 Chapter 2: THE STATUS OF MANAGEMENT OF WORKING CAPITAL AND EFFICIENT USE OF WORKING CAPITAL IN HÙNG HÀ LTD 20 2.1 General overview of company, Ltd Hùng Hà .20 2.1.1 The process of formation and development of the company 20 2.1.1.1 Outline of the formation and development of the company 20 2.1.1.2 Functions and duties .20 2.1.2 Generalizing business and production activities of the company in years 20 2.1.2.1 Labor situation .20 2.1.2.2 Situation of assets, capital 17 2.1.2.3 Results of business activities 20 2.1.3 Organization of the managerial apparatus in company 21 2.1.2.1 Diagram of organization of the managerial apparatus in company .21 2.1.2.2 The functions, duties and power s of the constituent parts of the company's managerial apparatus 21 2.2 Administrators in working capital and efficiency using working capital in Hung Ha Ltd .24 2.2.1 Composition and structure of working capital in company 24 2.2.1.1 Structure of working capital in total capital of business 24 2.2.2.2 Structure of capital items in total equity of business .25 2.2.2 Analyzing the situation ensuring the capital for business operations 26 2.2.2.1 Capital financing situation of Companies over years 26 2.2.2.2 The ratio WC/Short - term debt 28 2.2.3 Administrators of working capital in company .29 2.2.3.1 Administrators of capital in cash 29 2.2.3.2 Administrators of inventories 33 2.2.3.3 Administrators of accounts receivable 37 2.2.4 Efficiency using in working capital in Company 39 2.2.4.1 Rotated speed of working capital 40 2.2.4.2 The level of savings working capital .40 2.2.4.3 The level of undertake in working capital 41 2.2.4.4 The rate of return of working capital .41 Chapter 3: INTEGRATED ASSESSMENT AND SOME METHODS IN ORDER TO ENHANCE THE MANAGEMENT AND USING THE WORKING CAPTITAL IN HÙNG HÀ LTD 43 CONCLUSION .48 REFERENCE LIST 49 THE LIST OF TABBLE Trang Table 2.1: Labor situation and average income year 2010, 2011, 2012, 2013, 2014 16 Table 2.2: Situation of assets, capital in 2010, 2011, 2012, 2013, 2014 18 Table 2.3: Results of business activities over years 2010, 2011, 2012, 2013, 2014 20 Table 2.4: Structure of working capital in total capital of business in years 2010, 2011, 2012, 2013, 2014 24 Table 2.5: Structure of capital items in total equity of business over year 2010, 2011, 2012, 2013, 2014 25 Table 2.6: The situation of capital financing in year 2010, 2011, 2012, 2013, 2014 26 Table 2.7: The ratio WC/Short - term debt in years 2010, 2011, 2012, 2013, 2014 28 Table 2.8: Solvency of Hùng Hà Ltd Company .31 Table 2.9: Structure of inventory in total inventory of Hùng Hà Ltd Company 33 Table 2.10: Structure of receivables in total receivables of the company .38 Table 2.11: Efficiency using in working capital in Company 40 INTRODUCTION Today, in the market economy, the demand for capital for each business becomes more important and urgent because the enterprises directly faced with the volatility of the market, with competition from the domestic enterprises and foreign customers should require the use of capital so that reasonable to provide high efficiency in production and business activities and increase its competitive strength Enterprises operating under the independent accounting methods, to financial autonomy and is responsible of the results of its operations to profitability for the business To achieve this any production business enterprise would need to pay attention to the issue of capital, how to use and manage their capital to determine the existence and development of enterprises Therefore, significant capital is very important in analyzing business operations in order to assess the use of corporate capital to achieve superior results at lower cost Also on this basis provides useful information for the objects, such as investors, credit institutions Identify actual financial situation for effective investment decisions The purpose of the enterprise to participate in the production process that is headquarters of the key benefits that are profitable The crux of the matter is the working capital (WC), WC is the key factor to make a profit for each business It directly impacts the daily, hourly everywhere during business activities of the enterprise, as a condition for implementing enterprise-scale expansion, technical innovation, improve living standards for workers, and improve its position in the market Stemming from the role and importance as well as the practical requirements for the efficiency of the use of corporate WC, the research to identify /solutions to improve the efficiency WC always become issue necessarily contribute to ensuring the survival and development of enterprises long upstairs During practice the actual survey process in Hùng Hà Ltd Company of I noticed that companies are having difficulty in working capital issues, especially in the Undergraduate thesis Supervisor: Trương Quang Dũng management and use of WC Here are the problems the company is interested in: The company established in conditions not much equity capital, to serve the production needs of business, need large amounts of capital beyond the company's ability to borrow from banks to other credit institutions With its big loan amount, as financial expenses (interest expense high) This large effect on the efficiency of production and business operations of the Company Due to the small size of the company is not focused on managing an effective way of working capital which saw profit trends are made, there are benefits only bring immediate but then it did not carry to be effective as it expected enterprise, which is also the cause of the working capital of the business is stagnant Stemming from reality and perception is required after some time requires graduation exercises in Hùng Hà Co Ltd., with the help of instructors, I choose the topic "Analysis of the management and using the Working Capital in Ltd Hùng Hà " to thesis, with the desire to apply the knowledge learned in practice to analyze the efficiency of capital in Hùng Hà Limited Company in the future - The overall objective of this study is to analyze of the use of the Working Capital in Ltd Hùng Hà in last years Since then propose measures to apply to use of working capital in a most efficient, profitable and beneficial to the company - The Specific objectives is  To analyze proportion of working capital in total capital in the company  To assess the status of the working capital efficiency of the company in the last years  To analyze, synthesize and evaluate the results achieved and the remaining face in managing working capital in the company  To learn the factors affecting working capital  To illustrate the administration of working capital in the company - The scope of research  Subjects of the research: Research focused on capital efficiency in enterprises  Scope of the study:  Time research: The use of capital operation business productivity over the years 2010-2014 Name of student: Trần Thị Huyền Trang Undergraduate thesis Supervisor: Trương Quang Dũng  Space: At Ltd Hùng Hà  Methodology - Data collection + Business statement + The balance sheet, statement production and business activities, the detailed records, contracts and operational characteristics in the company - Data Analysis Rotated speed of working capital  Number of times rotation in WC Formula: L = M WK AV Note: L is number of times rotation in WK in the period M is the total circulation of capital (or net revenues) in the period WKAV the average working capital in the period and is calculated as follows WK AV = V q1 + V q + V q + V q 4 Vdq1 Or WK AV = + Vcq1 + Vcq + Vcq + Vcq 4 Vq1 , Vq , Vq , Vq : the average working capital in quarter 1,2,3,4 Vdq1 : working capital in started of the first quarter Vcq1, Vcq2, Vcq3, Vcq4 : working capital in the end of quarter 1,2,3,4  Rotated period in working capital Formula: K = N L Or K= WK AV × 360 M Note: K is rotated period in WC WCAV is average WC in the period M is total circulation of capital (or net revenues) in the period Name of student: Trần Thị Huyền Trang Undergraduate thesis Supervisor: Trương Quang Dũng N is number of date ( 360 days/year, 90 days/quarter, 30 days/month) The level of savings working capital Formula: M S = M1 ( K1 − K ) 360 Or MS = M1 M1 = L1 L0 Note: Ms is the level of savings WC M1 is total circulation of capital (or net revenue) reporting period K1, K0 is circulation of capital period plan period, reporting period L1, L0 is number of revolutions plan period, reporting period The level of undertake in working capital Formula: The level of undertake in WK= WK AV NR Note: WKAV is average capital in the period NR is net revenues in the period The rate of return of working capital Formula: The rate of return of WK= TP WK AV Note: TP total profit before tax or after tax WCAV is the average W in the period Name of student: Trần Thị Huyền Trang Undergraduate thesis Supervisor: Trương Quang Dũng Chapter 1: RATIONALE FOR THE USE OF WORKING CAPITAL IN ENTERPRISES 1.1 Working capital in enterprises 1.1.1 The concept and characteristics of working capital in the enterprise Working capital in the business is the cash advance capital to invest, purchase assets of the business to ensure that business production process is conducted continuously In the commercial business, working capital is often expressed through forms: Cash and short-term financial investments, short-term accounts receivable, inventories and other working products Working capital (abbreviated WC) is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital Gross working capital equals to current assets Working capital is calculated as current assets minus current liabilities If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses The management of working capital involves managing inventories, accounts receivable and payable, and cash Working capital is a common measure of a company's liquidity, efficiency, and overall health Because it includes cash, inventory, accounts receivable, accounts payable, the portion of debt due within oneyear, and other short-term accounts, a Name of student: Trần Thị Huyền Trang 10 Undergraduate thesis Supervisor: Trương Quang Dũng c Payment procedures and finalization purchase Payment and finalization purchase include: advance payments purchase money and finalization used materials and financial settlement construction, purchase categories Advance payment purchase money is the person in whose name of advance purchase money must make an advance payment request to the company Warehouse receipts supplies and goods purchased along with purchase receipt, purchase lists, acceptance record, receive services from outside the base documents advance payment to the company In all cases, supplies, tools and goods purchased must have a valid invoices, legally Units must make purchase a table of declared Purchase a table of declared must contain all the targets in the prescribed form, including their full name and address of the seller, purchase goods, quantity, unit price, purchase money Price indicated on the list does not be higher than the market value at the time of purchase Where to buy materials, tools and goods worth over VND 100,000 / time purchase required financial bill stipulated Finalization of materials used is the outsider who requests the production of materials to use and sign the delivery bill must balance sheet amount of materials actually used the company, clearly declare part object (if any) to pay to enter the warehouse The settlement documents to the repository include: category test records, works were done, the consumption of materials (if any), receipt, production materials and investment companies or departments, boards declare the actual amount of materials used The object of supplies to the settlement procedures of materials including stationery, materials for production, processing and trading Material types, agricultural supplies to farmers invested assets, documents and gifts for marketing, fuel and supplies, merchandise Professional accountant and chief accountant, heads of department responsible, check the bills, records and vouchers are eligible for payment or finalization, control, proposals before the leaders approved company, when discovered invoices, vouchers, documents, illegal signs should report to room leader, the company for review and Name of student: Trần Thị Huyền Trang 35 Undergraduate thesis Supervisor: Trương Quang Dũng processing Economic contract (the original) must be sent to the accounting department immediately after the signature stamped sides to monitor and manage the procurement and as a basis for payment When the room, base parts using materials, goods and services of the company by other room management unit must conduct internal billing procedures, including internal up delivery bills , internal warehousing bills, bills internal market prices or internal settlement price without a basis for determining market value Accountants use the materials, goods and services must cost internally, while the delivery of goods and services must include internal sales d Management of warehousing and storage stages in storage All materials, goods and services purchased for use within corporate office must warehousing procedures Room units and individuals assigned must make stock purchase recommended and appointed Director for warehousing inspection room quality Customers inspect the goods warehoused with storekeepers and shoppers need to sign warehousing research room that shoppers stock up For materials and goods in warehouses outside the corporate office, the inspectors must perform the task of inspection of imports and are entitled to liability under contract All supplies and goods required quality testing records accompanying patterns Storekeeper responsible safety management of supplies, goods in stock, acquisitions, preserving the quality of materials and goods as required and make dossiers prescribed books to warehouse management When there are signs that may affect the safety or quality of materials, goods should immediately inform their immediate charge to handle Storekeepers are responsible for compensation of material damage loss caused by his subjective causes Accounting for supplies, goods or Bookkeeper to perform recording situation supplies enter into general ledger detail e Inventory - loss handling of materials and goods Periodically (at least every months) or upon request management, the company performed inventoried of materials, goods, tools and tool inventory and tools are used Name of student: Trần Thị Huyền Trang 36 Undergraduate thesis Supervisor: Trương Quang Dũng When inventoried must establish inventory councils have enough ingredients: leadership, unit, accountants, storekeepers management department uses tools and supplies Ending inventoried inventory record must establish and manage the inventoried reflected in the accounting, the actual data inventory surpluses or deficits difference (if any), determine the cause and decided to dispose of council Inventory records must be signed by the members of the council inventoried Handle inventory results on the principle that supplies and goods through inventoried discovered missing after deducting the recovery of compensation under the provisions of Council processor handles are few cost of sales in the period the Company's and the subsidiary units The person responsible for compensation of materials, goods shortage due to subjective reasons Objective reasons, the council clearly defined part compensated by personal responsibility and parts are accounted for as expenses Treatment decision makers must take responsibility for their decisions Generalizing again, the administration of inventories on the issue of separation of responsibilities, powers and functions of each department, individual or establishing specific procedures for each step of purchase, warehousing, storage, the finalization of purchase, inventory and the procedures to receive the voucher is quite clear, tight, ensuring management requirements in inventories However the management policy of the company has not seen the construction of a model reserve reasonable inventories Therefore, effective governance bring inventories by indicators were fundamental analysis is satisfactory, but reserve inventories in some years is not fully optimized 2.2.3.3 Administrators of accounts receivable Before learning the policies that the company has applied to the Managing Receivables, We should have an overview of the structure of items in receivables Name of student: Trần Thị Huyền Trang 37 Undergraduate thesis Supervisor: Trương Quang Dũng Table 2.10: Structure of receivables in total receivables of the company ( Unit: million VNĐ ) Indicate Year 2010 Money Customer receivables Prepaid seller 14,685 % Year 2011 Money % Year 2012 Money % Year 2013 Money % Year 2014 Money % 81.53 22,584 91.02 25,098 92.71 29,768 91.49 32,995 94.07 766 4.25 255 1.03 887 3.28 983 3.02 989 2.82 Other Receivable 2,561 14.22 1,974 7.96 1,087 4.02 1,787 5.49 1,092 3.11 Total Receivable 18,012 100 24,813 100 27,072 100 32,538 100 35,076 100 (Source: From Hùng Hà Ltd Company ) In total receivables, In 2010 customer receivables account for 81.53 % ; In 2011 item hikes and accounts 91.02 % ; In 2012, it has decreased but still retains a large proportion to 92.71 % In 2013 is 91.49 % and in 2014 is 94.07 % We can see, in 2014 the activities took place favorable consumption, increase revenues and planning, contributed to the increased revenue, increased profits overview of the structure of the total assets and liabilities accounts receivable Other items Prepayments to suppliers and other receivables are also volatile In 2010, the position other rêcivable accounted for 14.22%, but in 2011 suddenly reduced to 7.96 %, in 2012 that item and accounted for 4.02 % increased In 2013 is 5.49 % and in 2014 is 3.11 % Prepaid seller just makes total receivables rose sharply in 2010, 2011, 2012, 2013 and 2014 separately decreased significantly These rules in the administration of the actual accounts receivable at the company: a The customer accounts receivable Customer Accounts receivable arise from the relationship must have the confirmation of its customers Goods of the company must be stated clearly in the contract All cases delivery products for sale but not yet earned money without any contract, commitment leads to bad debt, the person who decided to take responsibility Accountants of Companies and the subsidiary units must open books to monitor in detail all liabilities Receivables Name of student: Trần Thị Huyền Trang 38 Undergraduate thesis Supervisor: Trương Quang Dũng Monthly Accountants must collate, synthesize and analyze the situation of debts, especially debts due, overdue and doubtful Debts due to clearly identify the extent, causes, responsibilities and treatment measures A debt when eliminated by the inability to have fully recovered evidence as prescribed by law b Advances and advance payment of money, materials The company's employees to advance money or materials to be used only for production and business activities It is strictly forbidden the case in the name of the advance to use the money, the of Companies materials to the personal purposes Before the advance must have proposed ballot approved and purchasing plans, plans for implementation Who advance to write a written request in advance stating: the money, the amount of materials and time objectives and time When finished, the individual must pay the advance money or materials associated with the voucher, the of Companies leadership to browse The recipient of advance must be paid advance direct After finishing work or materials from the advance money within days, the advance should make advance payment procedure If the individual has completed work but not completed before the advance was not to advance to the next time The special case advance work unpaid prolonged closing upon each advance should have explained, the advance directly decided by the Director At the end of the accounting department in the list of remaining individuals advance minors ask for comparison sign for certification, and report to Director the advance balance case, no payment overdue and proposed remedies 2.2.4 Efficiency using in working capital in Company Work of administration and results in working capital used in working capital represents a causal relationship After studying the regulations and policies that the company set up to manage working capital as well as cover some indicators of the effectiveness of management in the part expression patterns of working capital, we Name of student: Trần Thị Huyền Trang 39 Undergraduate thesis Supervisor: Trương Quang Dũng continue stool one of the target area to consider and evaluate the use of funds in fact took place how: Table 2.11: Efficiency using in working capital in Company (Unit: million VNĐ ) Year Year Year Year Year reporting period 2010 57,761 2011 86,551 2012 116,886 2013 129,761 2014 149,778 plan period 68,235 101,000 127,000 160,342 182,001 Profit before tax (million VNĐ) -8,921 3,001 4,221 5,003 9,321 Average Working Capital (million VNĐ) 39,992 52,578 55,744 55,304 61,695 Days in the period Rotated speed of WC Number of times reporting period plan period Rotated period in WC reporting period plan period 2.Level of savings WC 3.Level of undertake in WC 4.Rate of return of WC 360 360 360 360 360 1.44 1.71 249.25 211.0 -6,139 0.69 -0.22 1.65 1.92 218.69 187.4 -7,522 0.61 0.06 2.10 2.28 171.69 158.0 -4,439 0.48 0.08 2.35 2.90 153.43 124.2 -10,548 0.43 0.09 2.43 2.95 148.29 122.0 -10,923 0.41 0.15 Indicate Net Revenue ( Source: From Hùng Hà Ltd Company ) 2.2.4.1 Rotated speed of working capital Speed rotation of working capital influenced rotation speed of the items inside it Collectively working capital in 2010 rotary was 1.71 round; then rise through the year as 2011 was 1.92 round and round in 2011 was 2.28 In 2013 was 2.9 and round in 2014 was 2.95 Similarly, in 2010 the working capital to take a period of 211 days, in 2011 and 2012 takes 187.4 days lost 158 days to complete a cycle movements in 2013 and 2014 takes 124.2 days lost 122 days to complete a cycle movements Overall, the results obtained so, in terms of speed revolving is also the slowest, while the working capital transferred to expression patterns that are not being used to reach this desired results are expressed clearly in analysis of management efficiency of capital in cash, administrators inventory and administrator accounts receivable was mentioned in the previous section 2.2.4.2 The level of savings working capital Compared to the plan, the 2010 and 2011 amounts are wasted respectively in Name of student: Trần Thị Huyền Trang 40 Undergraduate thesis Supervisor: Trương Quang Dũng working capital - 6,139 and - 7,522 million VNĐ and in 2013 was effective while saving up to -4,439 million VNĐ In 2013 and 2014 the level of savings working capital decreased and the value is -10,548 and - 10,923 Speed rotation of working capital is a factor affecting the level of savings in working capital, the slow return on capital is the cause wasting, reduced efficiency of working capital 2.2.4.3 The level of undertake in working capital In 2010, a copper revenue must be guaranteed to 0,69 working capital, in 2011 the level of working capital assumed in figure 0.61 and by 2012 it reached just 0.48 necessary when working capital is created a copper revenue In 2013, it was 0.43 and 0.41 in 2014 This criterion contrary to norms of working capital number of revolutions, the less use of working capital generated as much revenue the better 2.2.4.4 The rate of return of working capital In fact, the company made a loss in years from in 2010 to 2014, particular 2010, a copper Working Capital create copper 0.06 profit And in 2011, 2012 and 2013 increased and the value are 0.08; 0.09 and 0.15 That show company operation is good If the separate calculation of the targets on the rotation speed and the assumed savings, we can see that the improved efficiency of working capital received more attention, this represents through positive changes in data calculated each year, especially in 2012, 2013, 2014, this indicator reached the set target But the fact is that only in 2010 the company achieved positive profits In 2010, the administration of working capital is not properly invested to make this year the business lost money In 2011 the indicators of efficiency of management of working capital has improved, resulting in increased efficiency of working capital, helped increase revenue, increase profits This explains the research aspect of working capital as follows: general the structure of this year's funding to see capital being mobilized mainly from short-term loans, while higher revenue in 2012, 2013, 2014 are as receivables to slow capital recovery, leading to a prolongation of the payment of bank interest, from which increases the cost of using capital Name of student: Trần Thị Huyền Trang 41 Undergraduate thesis Supervisor: Trương Quang Dũng Besides the coordination no rhythm in the administration, accounting works cost price, expansion of production in conditions lack of manpower as actors make negative profitability Revolving capital bring high revenue, but revenue that was not offset by the cost spent A means of improving capital efficiency is improving profitability is not only the impact of the administration but also affected by many other factors If objectivity factors that is beyond the control of the enterprise about the economic situation, the risks reduces efficiency of working capital on the other hand, subjective factors are particularly worrisome for the enterprises In particular, management's level is problem need to be discussed Working administration was loose in working capital, mainly as a theory but not yet implemented and put into a proper business The goal is to replace and complement human for the management, formation parts with advisory functions, advising the decisions of the management Management situation for working capital and effective use of working capital in the company - Advantages The size of working capital increased over years, the level of increase is not too high, but that is quite encouraging The beneficial production and business results in 2011 brings excitement to the operation of the whole company The organization of the management and organization of accountants is suitable with business characteristics of the company In the administration of working capital, the regulations on division of responsibilities, powers and functions of each department, unit or individual is very clear; control procedures and process receipts are set relatively specific, strict, limiting the loss of cash supplies in the stages of reserves, production and circulation of working capital Some indicators relating to administrator inventory basically meet the requirements set out, excess inventories and increased over the years is not in stock but is expanding production scale - Disadvantages The capital of the company in the early year most is in fixed capital, therefore, Name of student: Trần Thị Huyền Trang 42 Undergraduate thesis Supervisor: Trương Quang Dũng the production and business had to borrow from other sources to meet the operational needs of units However, the situation stabilized in source of funding capital and using funds many shortcomings Financial balance has not secured financial safety level is low, the initiative when choosing investment projects therefore also not high The proportion is even greater receivables in total capital reduces the efficiency revolving working capital Not yet build models appropriate cash reserves, capital structure in cash in total working capital was unreasonable, reduce liquidity Inventory not have the appropriate investment in reserves and production stages, but keep working capital cycle but affect redundancy with condition that market price fluctuations and affect the productivity The indicators measure the efficiency of capital in cash, receivables administrator and efficient using of working capital are not achieved the expected results Profit ratio of working capital is low, the main cause is from the inefficiency in the use of capital Using capital of company funds mainly come from loans, but sales have been largely in the form of customer receivables recovery is slow, thereby extending the payment of bank interest rates, increasing cost of using capital higher product cost compared to other similar products on the market is also a reason why we have negative profits Chapter 3: INTEGRATED ASSESSMENT AND SOME METHODS IN ORDER TO ENHANCE THE MANAGEMENT AND USING THE WORKING CAPTITAL IN HÙNG HÀ LTD Name of student: Trần Thị Huyền Trang 43 Undergraduate thesis Supervisor: Trương Quang Dũng Propose some solutions and recommendations to improve the administration of working capital and efficient use of working capital in the company * Focusing on the human factor Human factor always plays a decisive role in the success of the business Thus, the need to plan training and development of human resources in the long-term development strategy of the company Management level is limited, so the first solution is to raise the level of the workforce and employees at the company To make the most of human resources, the company strengthened the following activities: Regular evaluation and review of the organizational structure, the professional qualifications of staff and employees Working management personnel should be taken seriously, fairly and properly assess the positive and negative points in the operation of the labor force, thereby promoting the positive points, limited negative, timely material incentives for collective and individual There are a practical contribution to the overall development of the company To recruit more staff to the company who are highly qualified to set out the strategy and business plan in the right direction in the coming years, the organization added the department is responsible for consulting, advising the decisions of the management → This solution is fully applicable in a business situation of companies with more adverse events, such as the present, on the basis of close cooperation with other solutions * Actively exploring and using business capital in general and working capital in particular sensibly and flexibly In terms of businesses operating primarily in the mobilization directly from outside, reducing the cost of capital, the company should be flexible to find funding with appropriate interest Some power companies could consider such mobilization: Bank loans: Actually bank loans were companies leverage Must understand that this is additional capital, not capital permanent working capital formation of companies On the other hand, companies should also raise medium and long term capital for both short-term loans to long-term appropriate and will contribute to temporary difficulties in capital, reducing part costs and increase profits Capital of joint venture, association: This form of cooperation through which Name of student: Trần Thị Huyền Trang 44 Undergraduate thesis Supervisor: Trương Quang Dũng enterprises constantly increase capital for business but also academic management experience, absorbing the entire science and technology and transfer of technology Capital of misappropriation: This source can not be considered as the main source of capital raised should not overdo, but when using these funds, the company must pay to use In order to mobilize the full, timely and proactive in business capital, companies can implement the following measures: Develop strategy for capital mobilization site suitable to the market and business environment Creating confidence for the place supply by raising capital reliable characterize the company: stable and reasonable financial indicators, payment of debts on time Prove the purpose of capital use efficiency by offering prospects possible in the coming period To allocate capital effectively, companies need: Based on plan and mobilization and the use of capital was set up to adjust to fit the actual situation in the company If arise unusual demand, companies need proactive planning and timely supply, ensure business activities continuously takes place, prevent having to stop production due to lack of business capital * Build a reasonable cash reserve Plan cash flow is activities control of money in the future in order to create and maintain appropriate cash status with the enterprise's activities, typically just enough, plus the percentage of preventive depending on the actual situation each enterprise Based on analysis of the cycle of money in, money out and identify potential problems with money, the solution can be adjusted temporarily or permanently as: Urges the reclaim a debt for the said account was overdue or convince customers ahead of time To change debts policy, persuade customers to quickly get money pile purchase, renegotiate payment period for suppliers, planning the investments, please debt rescheduling, debt dig We calculate the time of purchase and payment and the time of the events or activities related to the payment In addition, to determine the capital requirements need extensive funding and capital needs required for each month's salary corresponding to the level of mass consumption products, should use cash budget - one testing tool effective cash management Cash budget estimates are Name of student: Trần Thị Huyền Trang 45 Undergraduate thesis Supervisor: Trương Quang Dũng prepared as follows: Estimated revenue: + Inside: The estimated revenue to be established through estimation of customer orders, review of the sales department Next, screened and sorted into forecasts for each product group Then gross product groups into a revenue forecast for the company + Outside: Forecast economic sector and tendency of developing sector However, the establishment of these estimates are made well only when reasonable settlement solutions for human, there is a department that is capable staff undertake the calculations and given estimates of the appropriate cash situation of the company The revenue estimates also include the estimated effect of working capital needs through forecasting outside under a percentage of revenue After making the estimates of revenue, accounting department tabulated estimates cash budget Through that help companies limit any shortcomings in planning, the right balance for long-term goals are quickly identified On the other hand tools help correct link interest payments of the company, planning financing products, procurement of machinery and equipment, found a way to resolve the shortage of cash and therefore will have operational direction of huge credit for the company to plan cash estimates Strengthen the management of receivables, minimize the amount of capital occupied In the last years the company as well the debt recovery manifested in the increase in receivables measured implementation of policy easing unreasonable, much less implement policies on sales discount to encourage the customer to pay Therefore, companies should implement credit policy tightening in a safe limit, ensuring rapid debt recovery and ensure response capability salable commodity to increase profits In case sales company with no large number of customers and locality of debt collection is not wide, companies should organize a division specializing in customer evaluation before sold on credit and to monitor recovery For retail customers, the company should implement the policy not to owe When buying or prepay, pay enough to require the establishment the insurance contract assets acquired in order to avoid losses, damages the goods Inventory management, reduce inventory costs Adjust the Name of student: Trần Thị Huyền Trang 46 Undergraduate thesis Supervisor: Trương Quang Dũng inventory structure in stages to suit the production and business demand of companies We regularly monitor the volatility of commodity markets Since then predicted and decided to make timely adjustments to prior purchases of market fluctuations There are measures to prevent the risks that may occur Appropriation to financial reserve fund, doubtful debt funds, reserve funds for devaluation of inventories sold We buy goods insurance for goods in transit as well as goods in warehouses The company participate insurance created an based firm space, a reliable shield to economy, help companies have the financial conditions to cope effectively all risks, unexpected losses occur, but did not affect working capital Some suggestions - Develop technical and economic norms applicable to all business departments to apply costs, especially labor costs, the cost of wastage, the cost of electricity and overall production costs, contributing to tighter management - Regularly monitor the volatility of commodity markets Since then predicted and decided to make timely adjustments to prior purchases of market fluctuations - Actively expand the business market is large - Strengthening the recovery of receivables, especially receivables lasting - Need to perform well internal management mechanism, to ensure efficiency in operations Concern good training and retraining of officers and qualified, professional staff Fast application of information technology for staff in the manufacturing process to meet specific job Name of student: Trần Thị Huyền Trang 47 Undergraduate thesis Supervisor: Trương Quang Dũng CONCLUSION Working capital is the index used to measure the operational efficiency and financial capacity in the short term of a company Orientation from this, with the desire to apply knowledge acquired in the university auditorium applied to find out the actual process of business activities, the subject of research I has gone deep the issue "Analysis of the management and using the Working Capital in Ltd Hùng Hà" on the basis of realistic description of the provisions and policies that company management teams established and applied to the administration of working capital as well as the calculation of the raw data into target with economic significance presented in the contents above thesis has solved a number of problems: - Assess the relative inexperience of the administration and the level of working capital inefficiencies to use its working capital during the 5-year research - Contributions are some practical solutions, specific constraints the administration working capital of the company, effective as of the financial indicators in hopes of boosting the development of the company in the future Name of student: Trần Thị Huyền Trang 48 Undergraduate thesis Supervisor: Trương Quang Dũng REFERENCE LIST Sách Quản trị tài chính doanh nghiệp / Vũ Duy Hào, Đàm Văn Huệ, Nguyễn Quang Ninh - Hà Nội: Thống kê, 1997 - 422tr ; 20cm Sách Quản trị tài chính - Kế toán / Nguyễn Đình Quế - Tp.Hồ Chí Minh: Nxb Tp.Hồ Chí Minh, 1994 - 295tr ; 23cm Sách Nguyên lý kế toán / Võ Văn Nhị - Hà Nội: Tài chính, 2003 - 196tr ; 24cm Sách Nguyên lý thống kê / Trần Thị Kỳ, Nguyễn Văn Phúc - Hà nội: Lao động, 2011 - 231tr ; 24cm Sách Kế toán quản trị Chủ biên PGS.TS Đoàn Xuân Tiên http://thuvienluanvan.info/luan-van/khoa-luan-phan-tich-tinh-hinh-su-dung-vonluu-dong-va-giai-phap-nang-cao-hieu-qua-su-dung-von-luu-dong-cua-cong-tytnhh-17415/ http://www.danangtimes.vn/Portals/0/Docs/245142650-44_Doanh%20nghiep %20Viet%20Nam%20trong%20hoi%20nhap.pdf http://www.investinganswers.com/financial-dictionary/financial-statementanalysis/working-capital-869 http://voer.edu.vn/m/quan-tri-du-tru-ton-kho/afee1366 10 http://doan.edu.vn/do-an/khoa-luan-nang-cao-hieu-qua-su-dung-nguon-von-luudong-tai-cong-ty-tnhh-dien-tu-tin-hoc-phuc-quang-6909/ 11 https://quynhtrangduong.wordpress.com/2013/05/23/mo-hinh-quan-tri-khoan-phaithu-va-thuc-te-cong-tac-quan-tri-khoan-phai-thu-tai-tong-cong-ty-co-phan-mayviet-tien/ Name of student: Trần Thị Huyền Trang 49 [...]... capital and reflects the movement's ongoing business operations 1.1.3 Classification and structure of of working capital It is classified working capital in the enterprises according to the following criteria:  Based on the role of working capital for the production process, working capital is divided into 3 categories: - Working capital in reserve and produced stages include: The capital of main raw... of working capital is formed from the initial charter capital when establish or supplement the charter capital in the production and business process of the enterprise Own capital is supplemented by the enterprise in the process of production and business as profits of the reinvested enterprises Capital occupancy reflects the capital that the enterprise occupies the legitimacy of the institutions and. .. Undergraduate thesis Supervisor: Trương Quang Dũng Capital of spare parts include the value of the packaging materials used for packaging in the production and consumption of products And the capital of small working tools is the value of labor means with low value, while using short, do not qualify is fixed assets - Working capital in manufacturing process include : The capital of manufacturing products... credit institutions, loans of employees in enterprise, loans to other enterprises Capital mobilized from the capital market by issuing stocks or bonds  Based on the time of mobilization and use of funds This way of working capital is divided into temporary working capital and working capital frequently - The temporary working capital is capital short term characteristic mainly to meet the demand with the. .. USE OF WORKING CAPITAL IN HÙNG HÀ LTD 2.1 General overview of company, Ltd Hùng Hà 2.1.1 The process of formation and development of the company 2.1.1.1 Outline of the formation and development of the company Hùng Hà Limited Liability Company has headquarters at No 31, Lê Lợi Street Đồng Hới City - Quảng Bình Province It formed in 2007 with service functions of buying and selling building materials Hùng. .. during the purchase of supplies and goods or internal payment  Based on the form of expression of working capital - Capital in cash includes the monetary capital of cash, bank deposits, capital accounts in payment and securities investments in the short term - Inventories are the working capital accounts have form of expression in specific artifacts as raw materials, unfinished products, semi-finished... efficiency of working capital Therefore, labor capital is decisive in establishing large production and business strategy of the business Working capital is a prerequisite for the growth and development of businesses especially for manufacturing enterprises, commerce By these enterprises in working capital accounted for a large proportion of total capital, the survival of the enterprise depends heavily on the. .. the impact of each factor to take effective measures in the work organizations and using WC, the purpose is to make the efficiency of working capital bring the highest 1.2.3 A means of enhancing efficiency in working capital If the WC is an indispensable condition for any enterprises to conduct production and business, the profits to determine the existence and development of enterprises Clearly, these... efficiency using of WC In short, the job of managers is to improve the state use of capital research through effective indicators , and the significance of improving the efficiency using in WC is raising benefits profit 1.2.4 The evaluation criteria efficiency using in working capital 1.2.4.1 Rotated speed of working capital Rotated speed can be measured by two criteria were: Number of rotation (or the number... Experiencing the production of commodity products were made Thus at this stage in working capital was forms of commodity investment capital shifts into capital unfinished products and then shifts into the finished capital In the period 3 (H'-T '): the enterprise conducts product sales and collect money for working capital and has since finished products capital forms shifts into monetary capital return ... FOR THE USE OF WORKING CAPITAL IN ENTERPRISES 1.1 Working capital in enterprises 1.1.1 The concept and characteristics of working capital in the enterprise Working capital in the business is the. .. of undertake in working capital 19 1.2.4.4 The rate of return of working capital .19 Chapter 2: THE STATUS OF MANAGEMENT OF WORKING CAPITAL AND EFFICIENT USE OF WORKING CAPITAL IN. .. Composition and structure of working capital in company 2.2.1.1 Structure of working capital in total capital of business Table 2.4: Structure of working capital in total capital of business in years