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Graduation Thesis Academy of Finance DECLARATION I hereby declare that this thesis is my own work and effort It has not been submitted anywhere for an award Where other sources of information have been used, they have been acknowledged Graduation thesis author Luong Thi Phuong Anh Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance CHAPTER THE OVERVIEW OF WORKING CAPITAL AND WORKING CAPITAL MANAGEMENT The working capital 1.1.The definition of working capital In order to carry out the production and business activities, beside fixed assets, enterprises need to have current assets Based on the scope of use, current assets are divided into two groups: production current assets and circulation current assets  Production current assets include raw materials, auxiliary materials, fuels, spare parts in the procession of production reserves, unfinished and semi-finished products in the procession of production  Circulation current assets is the consist of cash, cash equivalent, account receivable and finished products in stock waiting for consumption Ensuring that the process of economic growth is equitable, inclusive and sustainable, production and circulation current assets need to move, transform and replace each other Enterprises must pay the certain quantity of money which is called working capital to buy those assets In this way, working capital reflects the advance payment a company has available to invest in current assets for production and business activities Working capital is also the measure of both a company’s operational efficiency and its shortterm financial health The net working capital is the amount of the company’s current assets minus its current liabilities 1.2.The characteristics of working capital The features of working capital distinguishing it from the fixed capital are as follows:  Short term Needs: Working capital is used to acquire current assets which get converted into cash in a short period In this respect it differs from Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance fixed capital which represents funds locked in long term assets The duration of the working capital depends on the length of production process, the time that elapses in the sale and the waiting period of the cash receipt  Circular Movement: working capital is constantly converted into cash which gain turns into working capital This process of conversion goes on continuously The cash is used to purchase current assets and when the goods are produced and sold out; those current assets are transformed into cash Thus, it moves in a circular away That is why working capital is also described as circulating capital  Liquidity: working capital is very liquid so if need arises, working capital can be converted into cash within a short period and without much loss  Less risky: investment in fixed assets is less risky as it is a short-term investment Working capital involves financial or economic risk to a much less generally Moreover, working capital get converted into cash again and again 1.3.The classification of working capital  Classifies according to the basis of concept: Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance FIGURE 1.1 CLASSIFICATION REGARDING TO THE BASIS OF CONCEPT Working Capital Gross Working Capital Net Working Capital o Gross Working Capital is the sum of all of a company’s current assets It includes assets such as cash, accounts receivable, inventory, short-term investment and marketable securities In practice, it is not useful because gross working capital is just one half of a picture of a company's short-term financial health and ability to use short-term resources efficiently o Net Working Capital Net working capital is the aggregate amount of all current assets and current liabilities It is used to measure the short-term liquidity of a business and can also be used to obtain a general impression of the ability of company management to utilize assets in an efficient manner To calculate net working capital, use the following formula: Net Working Capital = Cash and cash equivalents + Marketable investments + Trade accounts receivable + Inventory – Trade accounts payable  Classifies following the basis of time: Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance FIGURE 1.2 CLASSIFICATION REGARDING TO THE BASIS OF TIME WORKING CAPITAL PERMANENT OR FIXED WORKING CAPITAL TEMPORARY OR VARIABLE WORKING CAPITAL REGULAR RESERVE WORKING SEASONAL SPECIAL WORKING WORKING CAPITAL CAPITAL WORKING CAPITAL CAPITAL o Permanent or fixed working capital is the minimum amount which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets There is always a minimum level of current assets which is continuously required by the enterprise to carry out its normal business operations For example, every firm has to maintain a minimum level of raw materials, work-in-process, finished goods and cash balance This minimum level of current assets is called permanent or fixed working capital as this part of capital is permanently blocked in current assets As the business grows, the requirements of permanent working capital also increase due to the increase in current assets The permanent working capital can further be classified as regular working capital and reserve working capital required to ensure circulation of current assets from cash to inventories, from inventories to receivables and from receivables to cash and so on Reserve working capital is the excess amount over the requirement for regular working capital Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance which may be provided for contingencies that may arise at unstated periods such as strikes, rise in prices, depression, etc o Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies Variable working capital can be further classified as seasonal working capital and special working capital Most of the enterprises have to provide additional working capital to meet the seasonal and special needs The capital required to meet the seasonal needs of the enterprise is called seasonal working capital Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing campaigns for conducting research, etc Temporary working capital differs from permanent working capital in the sense that it is required for short periods and cannot be permanently employed gainfully in the business Figures given below Illustrate the difference between permanent and temporary working capital o In Fig 1.3, permanent working capital is stable or fixed over time while the temporary or variable working capital fluctuates In Fig 1.4, permanent working capital is also increasing with the passage of time due to expansion of business but even then it does not fluctuate as variable working capital which sometimes increases and sometimes decreases Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance o AMOUNT OF WORKING CAPITAL TEMPPORARY OR VARIABLE WORKING CAPITAL PERMANENT OF FIXED WORKING CAPITAL TIME Fig 1.3 TEMPORARY OR VARIABLE AMOUNT OF WORKING CAPITAL PERMAMENT OR FIXED WORKING CAPITAL TIME Fig.1.4 The working capital management 2.1 The definition and goals of working capital management  The definition of working capital management Working capital management (WCM) refers to a company's managerial accounting strategy designed to monitor and utilize the two components of working capital, current assets and current liabilities, to ensure the most financially efficient operation of the company The primary purpose of working capital management is to make sure the company always Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance maintains sufficient cash flow to meet its short-term operating costs and short-term debt obligations Working capital (WC) is a daily essence to business, as they need a regular amount of money to make routine payments, cover ordinary costs, and purchase basic materials used in the good production Thus, management of working capital is necessary for a company’s fundamental financial health and operational success as a business When a company does not have enough working capital to cover its obligations, financial insolvency can result and lead to legal troubles, liquidation of assets and potential bankruptcy For management of working capital, an enterprise needs to come to some following questions: i ii How many cash and inventory should we keep on hand? Should we sell on credit? What term will we offer and to who will we extend them? iii How will we obtain any needed short-term financing?  The goals of working capital management The main objectives of working capital management include maintaining the working capital operating cycle and ensuring its ordered operation, minimizing the cost of capital spent on the working capital, and maximizing the return on current asset investments Each company have some different ways to improve working capital to ensure some below goals:  Firstly, WCM involves monitoring cash flow, assets, and liabilities through the ratio analysis of key elements of operating expenses, including the working capital ratio, collection ratio, and the inventory turnover ratio to ensure that the company’s ability to identify areas that require focus in order to maintain liquidity and profitability  Secondly, working capital management is efficient to maintain the smooth operation of the operating cycle (the minimum amount of time Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance required to convert net current assets and liabilities into cash) and can also help business not only cover their short-term financial obligations but also boost their earnings 2.2 The content of working capital management How to calculate the working capital Enterprises need to maintain the amount of working capital to meet the short-term financial demand in the production and business operations Working capital is essential for purchasing the storing materials, making up the difference of account receivable and payable between the firms and customers So, the meaning of working capital needs of ‘the minimum essential working capital in order to ensure production and business activities of enterprises carried out normally and continuously’ The demand of WC is defined following formular: Demand of Working Capital = Estimated Inventory + Estimated Receivable – Estimated Payable  Method of determining WC demand: Directed method Contend of this method is directly determined WC demand for inventory, account receivable and payable, then collecting total of WC demand of enterprise Demand of Working Capital = Estimated Inventory + Estimated Receivable – Estimated Payable In that: - Estimated Inventory = The average consumption level of each type a day x The number of stock days of each type inventory - Estimated Receivable = The average revenue per day in the period x The average collection period Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance - Estimated Payable = The average purchase turnover in the planning period x The average payment period for venders The advantage: reflecting clearly WC needs of each material, goods, and in each stage of business, The disadvantage: complex calculation and waste more time in determining WC needs Indirect method This method bases on analyzing the used actual situation of company’s WC in report year, the change about business scale and WC turnover ratio in planning year o Correcting following percentage of WC needs compared with reporting year: Vkh = Vbc x x (1+t%) In that: - Vkh: working capital in planned year - Mkh: the level of WC rotation on planned year - Mbc: the level of WC rotation in reported year - T%: the shorten ratio of WC period rotation in planned year o The method bases on the total level of capital rotation and working capital ratio in planned year: Vkh = In that: - Mkh: the total level of capital rotation in planned year (net revenue) - Lkh: the number of WC cycles in planned year o The method bases on percentage of revenue This method bases on the fluctuation of percentage on revenue of elements forming company’s WC in the reported year to determine WC needs following revenue of planned year This advantage of this method is that it is very simple to understand and calculate Disadvantage includes its assumption which is difficult to be true for many organizations So, where is no linear relationship between the revenue and working capital, this method is not useful 10 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance Regarding inventory management: The management of inventory, especially the inventory of materials, has always met the production needs, ensuring the continuous production process Although the inventories increased, the inventory turnover ratio decreased, indicating that enterprises can not recover capital quickly and reduce capital wastage 72 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance CHAPTER SOLUTIONS FOR ENHANCING THE DONG XUAN KNITTING SOLE MEMBER LIMITED LIABILITY COMPANY WORKING CAPITAL MANAGEMENT 3.1 Development goals and orientations of Dong Xuan Knitting One Member Company Limited in the near future 3.1.1 Socio-economic context The world economy has developed in the direction of boosting global growth in major economies with a series of strong measures implemented Meanwhile, many emerging economies implement tightening policies through raising interest rates to reduce monetary pressure, so economic growth in this region is facing obstacles Socio-economy of our country in the context of the world has advantages, but also many risks and challenges, there are still many complex factors and unpredictable developments Difficulties in production and business have not been solved thoroughly, the internal weaknesses of the economy have been overcome In this context, the Government determined the socio-economic development targets in 2019 to continue stabilizing the macro economy, controlling inflation, rational growth and improving quality, efficiency and strength Competition of the economy on the basis of promoting the implementation of three strategic breakthroughs in combination with the renovation of economic growth and restructuring model Ensuring social security and social welfare, improving people's lives Reasonable and effective use of resources, environmental protection and proactive response to climate change Promote administrative reform and prevent corruption, waste and improve the business environment Ensuring national defense, security, 73 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance social order and safety Expanding and improving the effectiveness of foreign affairs and international integration In order to well implement the general objectives and major socioeconomic targets of 2019, the Government and the Prime Minister have issued many guiding documents Right from the beginning of the year, the Party, the State, the National Assembly and the Government focused on drastically directing branches, levels and localities to synchronously and effectively implement tasks and solutions to soon overcome the limitations to overcome challenges to stabilize the macro, create sustainable growth and ensure the population's life 3.1.2 Objectives and development orientation of the company The market economy has been expanding many opportunities as well as great challenges for businesses, especially small and medium enterprises In order to stand firm and keep growing in the market, it is necessary for enterprises to pay attention to all stages of the business process, from the stage of capital withdrawal to cost saving and acquisition High profits to compensate for market slippage, or fulfill obligations to the state, improve workers' lives and expand consumption networks for businesses to constantly develop The following are some of the business development orientations: - Organizing mobilization to ensure sufficient and timely working capital for production and business activities of enterprises - Management of economical and efficient use of electricity, combined with strict management of revenues and expenditures, ensuring the solvency of enterprises, contributing to continuously improving the efficiency of the use of enterprises - Regularly supervise and closely monitor the business activities of the enterprise Timely detection of problems in business, which can make decisions to adjust in accordance with actual developments 74 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance - Organize training, coaching, recruitment, construction and the entire team of qualified and experienced cadres and workers to meet the increasing production and business requirements to serve the immediate and long-term tasks of the business - Constantly improve the quality, product design, market expansion, prestige for customers, to strengthen the competitive position and serve the business and production activities of enterprises better and better - Actively deploying savings, reducing product costs, closely managing expenses: Selling expenses, enterprise management expenses and enhancing business accounting to ensure effective production and business 3.2.The main solutions are to strengthen the management of working capital in Dong Xuan Knitting One Member Company Limited Working capital management is a big issue requiring company managers as well as the entire staff of Dong Xuan Knitting One Member Co., Ltd to constantly strive and improve professional qualifications how to identify and evaluate real situation in the most realistic way to manage working capital with the highest efficiency In the market economy, business activities in the difficult conditions of businesses plus fierce competition of many other companies in the same industry but the company has obtained many encouraging achievements However, besides the achievements, the company also revealed some shortcomings in its business operations as well as in financial management With the knowledge I have learned at university lectures and my own understanding through the practice in the company, I would like to offer some basic solutions to improve organizational effectiveness and management of working capital at Dong Xuan Knitting One Member Company Limited as follows: 3.2.1 Actively determine the working capital needs in a most efficient way 75 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance The need for working capital is the optimal working capital which ensures the continuous and effective production and business process and helps the use of working capital to be active, rational and economical It must be affirmed that there is not any definite pattern that can be applied to all businesses to determine working capital needs Therefore, the company must define a method based on specific characteristics and situation That way, it can promote the effect of forecasting and will really bring about efficiency In order to continuously improve the efficiency of capital use, the company needs to plan working capital based on accurate calculations of the company's working capital needs Since then, the mobilization of working capital will be proactively carried out in a timely manner, creating conditions for business production to occur continuously and effectively Currently the company has applied a percentage method of revenue to determine the need for regular working capital Therefore, it is easy to misidentify the need for working capital to reduce the flexibility in the production and business of the company Therefore, the company should apply the direct method for subsequent periods According to the method of forecasting direct working capital demand, we determine the demand for working capital based on the direct calculation of each component of working capital of the enterprise Formula to determine working capital needs: NWC = Inventory + Accounts Receivable - Accounts Liabilities It is also possible to forecast working capital needs by the following way: Working capital demand = Mn x N Mn is the consumption of capital per day on average N is the working capital turnover period The working capital turnover period is understood as the period of time from the working capital in the 76 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance monetary form and is rotated until it returns to the monetary form Therefore, the circulating working capital is determined as follows: N = Inventory turnover period + Average collection period + Average payment period This method ensures a more realistic forecasting result However, this method requires a large amount of computation and the forecaster must be really knowledgeable about the operational characteristics of the company 3.2.2 Well performing the work of collecting and spending cash, ensuring the solvency and profitability of the capital Cash is a special type of asset of an enterprise, which can easily be transformed into another type of asset, so it is easy to be subject to fraud, embezzlement or abuse in the enterprise On the other hand, cash is one of the factors that determine the solvency of an enterprise at a given time Corresponding to a certain scale of business requires a constant amount of money to ensure the financial situation of the business in a normal state The lack of capital in cash can easily lead to insolvency and risk of bankruptcy Therefore, the good implementation of the revenue and expenditure plan of money is of great significance for business operations of enterprises, which is one of the important contents in corporate financial management In recent years, the cash of the company has a small proportion tends to increase because the company has increased reserve of capital in cash Therefore, to set up with financial managers is to find effective measures to manage and use effectively, avoid affecting capital stagnation and the company's solvency When considering measures to manage capital in cash, the company should pay attention to the following points: • The company needs to determine the optimal cash reserves: Just to ensure the daily cash expenditure needs and improve the profitability of the capital 77 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance • Predict and manage the sources of import and export capital in cash Specifically: - Prepare a forecast table of time and money collection Collecting money from the company mainly from activities such as revenue from sales, borrowing from borrowers - Prepare a forecast table of time and expenses The main expenses of the company are: procurement of raw materials, payment of wages, payment of due debts, payment of taxes and other expenses - Prepare a cash budget planning table based on the information of the above two tables • On the basis of comparing cash flow and cash flow, the company can see the surplus or budget deficit from time to time, thereby implementing budget revenue and expenditure balancing measures, managers can implement Some of the following measures to improve the situation: - In the absence of the need to accelerate the debt collection process, reduce the number of inventories, reduce the rate of payment for suppliers, sell unused assets to - When cash surplus in the short term: Invest in financial products with high liquidity - When excess money in the long term: Invest in new projects, contribute capital to projects with high profitability • Managing the use of revenues and expenditures in a tight manner, avoiding loss and misuse, because the company's activities of collecting and spending capital in the company take place daily, hourly, and more money is a special types of assets are highly solvable, easily converted to other forms of assets Specific management measures are: - All cash expenditures must be done through the fund, not to be collected outside the fund, self-financed 78 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance - There must be a clear division of responsibilities in managing cash capital, especially between the cashier and fund accountant, and take measures to ensure safety for the fund - Must build regulations on cash collection and payment, which can be used in cash or without cash - Strictly managing cash advances, clearly identifying the subjects to be advanced, receiving advance, advance and advance payment time for timely recovery 3.2.3 Strengthening the management of receivables The company has been appropriated a lot of capital but mainly in accounts receivable from customers and other receivables Cause: - The company wants to find many new customers, so credit policy has eased for customers The company can extend debt with longer periods, larger numbers and a wider range of customers - The assessment of prestige and financial ability of customers is not good, so the company still signed consumption contracts with some customers with low liquidity - In some cases, when signing a contract with a customer, there are no conditions for tight binding on payment time and other legal terms of payment leading to late repayment, company Therefore, in order to ensure the stability, healthy and financial autonomy, speed up the circulation of working capital, thus contributing to effective use of working capital, the company needs to take measures Effective solutions to better pay and debt recovery Specific measures are as follows: - Credit policy has eased but must be in a safe limit, it must be reasonable with the financial ability of the company, as well as can extend the debt based on the actual value of the shipment and the actual situation of the customer so that it is both soft and able to recover the debt quickly - Before signing a contract and accepting credit of the company, it is necessary to better the assessment of the reputation and solvency of 79 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance customers Specifically to consider: solvency, credit rating, reputation of customers in the marketplace, business performance and potential factors If there are no conditions for deep assessment, it is imperative that the counterparty must use measures such as deposit, prepayment in part of the contract value - In the organization of product consumption, the company needs to stipulate clearly the payment term, payment method on invoices and documents and require the parties to be responsible for fully and seriously implementing the Clause specified in the contract in accordance with the current financial policy regime If payment is later than the stipulated time, the partner will be subject to a fine for breach of contract, overdue debt and subject to the overdue debt interest rate of the bank - Strengthen measures for customers to pay for goods such as discount sales, discount, discount for regular customers, buy and place orders in large quantities, pay early on time Implementing this is certainly the work of recovering the goods of the company will be faster, limiting the situation of slow payment, difficult money In order to determine this discount rate, the company needs to rely on bank interest rates on loans, because the fact that in the time of being overused by customers as in 2017 -2 013 forced the company to take bank loans for production and business and pay a certain amount of interest, moreover, when bank loans require complicated procedures In order to avoid this situation and be proactive in using capital, the company can offer a lower discount rate or equivalent to the bank interest rate in case it is necessary to recover the money immediately because of certainty This is more beneficial than waiting for the customer to pay the full amount of money after a certain time 80 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance - Actively apply appropriate measures to recover overdue debts Attention should be paid to incurring bad debts requiring analysis and evaluation, finding causes and measures to limit losses - In order to increase revenue and improve business efficiency, on the one hand, the company should promote existing business activities, on the other hand the company can research market demand to conduct new business models The company needs to classify customers into the market area, find the type of products that are able to consume large amounts, conduct the estimation of prices and consumption networks - The company establishes a bad debt reserve fund corresponding to the scale and risks of the receivables so that it can reduce bad debts, ensure financial safety In conclusion, in order to well manage receivables, the company needs to implement a credit policy that is both relaxed and tight to attract customers and not lose capital Loosening shows that the company offers incentives for customers who buy in large quantities, pay on or before the deadline 3.2.4 Strengthening the inventory management Managing inventory in enterprises is very important not only because stockpiles often account for a significant proportion of the total asset value, but reasonable and proper inventory will help businesses avoid cockroaches production section, no shortage of products and goods for consumption, and economical and efficient use of working capital Stock in reserve of Dong Xuan Knitting One Member Company Limited, in which finished products account for the highest proportion due to the end of the year with many finished products The value of materials (including fabrics, ) accounts for a large proportion of the total value of inventories Currently most of the materials that the company uses to produce are fluctuating in price, so the reserve of materials ensures stable production costs and minimizes stagnation Stagnant capital is essential 81 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance In order to reasonably reserve and effectively use inventory, the Company should implement the following measures: - Determine the inventory level of necessary materials and finished products I would strongly suggest that the company should use the method of minimum total cost in inventory management The steps to implement this method are as follows: Step 1: Determine the total cost of storage according to the formula: F1 = C1 * Q / Inside: F1: total storage cost C1: Storage cost of a unit of supplies and goods in stock Q: number of supplies and goods each time ordering Step 2: Determine the total cost of ordering by the formula: F2 = C2 * Qn / Q Inside: F2: Total cost of ordering C2: Cost for each order Qn: Total value of purchased materials, or finished products to be supplied under the contract in the year Qn / Q: Number of times ordered during the year Step 3: Determine Q to F = F1 + F2 = (C1 * Q / + C2 * Qn / Q) as Step 4: Determine the insurance reserve (Qbh): Based on actual experience and forecasts of major fluctuations that may occur during the planning period to determine as the number of contracts to be made during the year, prices of raw materials increased, storage costs and ordering costs increased due to inflation Step 5: Determine the value of the average inventory reserve - Proposing customers to sign future contracts so that the company can be proactive in supplying and storing products At the same time, the company needs to understand the needs of customers, that is to know about 82 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance the number of products and the time of delivery, thereby planning a sufficient production without too much redundancy - The types of tools, long-term inventory tools, which are outdated and unusable, should be quickly released to recover the capital that has been financed therein and reduce storage costs - In the increasingly fierce competitive market economy, as well as all other businesses participating in the economy, the company needs to build cargo warehouses to create the initiative in reserve and pepper pass The company needs to invest in means of transport, sales equipment to serve the process of goods consumption is convenient and easy, thereby increasing consumption, increasing revenue and profit of the company 3.3.Conditions for implementing solutions To improve business efficiency, the company itself must be creative, limit difficulties, develop advantages to create an operating environment that is conducive to their own The decisive role of the company is expressed in two aspects: first, know how to exploit and take advantage of favorable conditions and factors of the external and second environment, enterprises must actively create conditions, factors for myself to develop Both sides need to be coordinated in order to take full advantage of new resources and business to achieve optimal efficiency Therefore, the company needs to have specific conditions as follows: • Firstly, thoroughly grasp the requirements of production organization Production organization is a combination, close combination of labor, labor materials and workers to suit the requirements, production tasks, production scale and technology to create products High quality • Secondly, develop the level of labor force and motivate the collective and individual workers Human creative labor is a decisive factor for business performance The company needs to invest appropriately to have a skilled workforce Improving 83 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance the skill level of a team of engineers and technical workers to optimize the use of materials, productivity of machinery, advanced technology equipment, • Thirdly, strengthening the relationship between enterprises and society Along with the development of the commodity economy, the production of enterprises expands towards large production, socializing and opening up to make mutual relations in society increasingly tight, companies need know how to use relationships to exploit more orders, good consumption Business activities of companies that want to achieve high efficiency should take advantage of the advantages and constraints of the external business environment That is: - Solve good relationships with customers: The main purpose in business, because customers are people who receive products, consumers of products of enterprises If the customer is satisfied, the new product is consumed - Create credibility and prestige in the market for businesses in product quality, business style, service spirit - Deal well with relationships with consumer units and suppliers - Conscious of protecting the ecological environment: against the pollution of the atmosphere, water sources, waste water treatment problems, … CONCLUSION 84 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance Improving working capital management is never an issue for businesses Although in reality, recognizing the importance of working capital management, not all businesses have effective working capital management This depends very much on the level of company leadership and unpredictable changes from the economy Like all other businesses in the process of production and business, Dong Xuan Knitting One Member Co., Ltd has always paid attention to and focused on improving the management of working capital In recent years, the company has made positive efforts in production and business activities, continuously promoting product consumption, expanding markets However, the effective management of working capital of the company is not high Therefore, the company needs practical solutions to improve the efficiency of managing working capital in the coming time With not much practice time but stemming from the equipped knowledge, I would like to propose some ideas to solve problems and strengthen working capital management for Knitting Company Limited Winter spring Finally, I would like to express my sincere thanks to the enthusiastic guidance of the teachers in the faculty, and the staff of Dong Xuan Knitting One Member Co., Ltd., who helped me during my internship and completed the thesis this text Thank you sincerely! LIST OF REFERENCES TS Bui Van Van, TS Vu Van Ninh (co-editor), (2018) "Corporate Finance Curriculum", Finance Publisher 85 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance Assoc Nguyen Trong Co and TS Nghiem Thi Tha (co-editor), (2010), "Textbook of Corporate Financial Analysis", Finance Publisher Prof Dr Ngo The Chi and TS Truong Thi Thuy (co-editor), (2010), "Financial Accounting Curriculum", Finance Publisher Journals, financial websites; Economic Journal; Newspaper; Business Forum… Financial statements of Dong Xuan Knitting One Member Company Limited 86 Lương Thị Phương Anh Class: CQ53/11.14 ... Unfinisshed long-term 27 Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance assets 82.948.723.752 39.736.014. 544 43.212.709.208 108,75% III Long-term investment Investments... 1.077.911.476 (186.841.213) 16.205.867.357 3.392.230.746 12.813.636.611 500. 844. 172 (602.502.837) 1.103.347.009 (14 .444 .363.588) (2.980.265.478) (11.464.098.110) 56,21% -55,90% -590,53% -89,13%... capital  Classifies according to the basis of concept: Lương Thị Phương Anh Class: CQ53/11.14 Graduation Thesis Academy of Finance FIGURE 1.1 CLASSIFICATION REGARDING TO THE BASIS OF CONCEPT Working
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