Link video: https://youtu.

be/QMds7EqkPho
 Table of Contents

1) INTRODUCTION...........................................................................................................................4

2) ANALYSIS OF THE BALANCE SHEET.....................................................................................5

3) ANALYSIS OF THE INCOME STATEMENT.............................................................................8

4) RATIO ANALYSIS........................................................................................................................13

a. Liquidity ratios.........................................................................................................................................13

b. Efficiency ratios........................................................................................................................................15

c. Long-term solvency ratios........................................................................................................................18

d. Profitability ratios.....................................................................................................................................21

e. Market value ratios..................................................................................................................................24

5) CONCLUSION..............................................................................................................................25

6) REFERENCES..............................................................................................................................26

7) APPENDIX....................................................................................................................................28

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1) INTRODUCTION

Vietnam Dairy Products Joint Stock Company, widely

known as Vinamilk, is considered the most enormous dairy
corporation in Vietnam. The company was established in 1976
based on three dairy factories from the old regime, including Thong
Nhat Dairy Factory, Truong Tho Dairy factory, and Dielac
Powdered Milk Factory. In 2003, the company legally changed its name to Vietnam Dairy Products
Joint Stock Company.

According to Neilsen Vietnam, compared to other liquid milk production companies in Vietnam,
Vinamilk is the leader for consecutive years (Nguyen, 2021). Nguyen (2021) also pointed out that
Vinamilk’s portfolio has approximately 250 types of products, including 50 different varieties of the
liquid milk that fulfil the nutritional demands and expectations of its customers, and they are supplied to
roughly 500 different outlets across all 63 provinces and cities.

 Postal address: No. 10, Tan Trao Street, Tan Phu Ward, District 7, HCMC
 Business registration and tax code: 0300588569
 Fax: (+84 28) 54 161 226
 Email address: [email protected]

a) Members of BOD

 Mdm. Le Thi Bang Tam: Chairwoman Independent of the BOD 

 Mdm. Mai Kieu Lien: CEO, Executive BOD member
 Mrs Dang Thi Thu Ha: BOD member
 Mr Le Thanh Liem: BOD member
 Mr Michael Chye Hin Fah: BOD member

b) The company's independent (external) audit firm

3
 KPMG has been the independent auditor of Vinamilk for many years. It took part in the stock
exchange of Ho Chi Minh city (HOSE) in 2006 with the stock exchange code VNM. According to
Vietstock (n.d), its listed shares were 2,089,955,445 shares from its first trading date (19/01/2006).

c) The company's primary line(s) of business

Supplemented food and common food are the two main products that Vinamilk manufactured. Its
products are diverse from organic nutrients, vinamilk yogurt, powdered milk, liquid milk, infant cereals,
to soymilk, special nutrition products for adults, beverages (fruit juice, tea,..), ice cream, and cheese
(Vinamilk, n.d)

d) The majority-owned subsidiaries of your company

Based on information gathered from Vietstock (n.d), there are many subsidiaries and associates
domestically and internationally up to 31/12/2020; however, the four following companies stand out:

 GTNFoods Joint-stock Company: 75% ownership

 Vietsugar Joint-stock Company: 65% ownership
 Driftwood Dairy Holding Corporation: 100% ownership
 Angkor Dairy Products CO., LTD:  100% ownership

2) ANALYSIS OF THE BALANCE SHEET

VINAMILK- BALANCE SHEET

DECEMBER 31, 2018, 2019, and 2020

2018 2019 2020

VND % VND % VND %

Total current
assets 20,559,756,794,837 55.02% 24,721,565,376,552 55.34% 29,665,725,805,058 61.25%

Total non-
current assets 16,806,351,859,342 44.98% 19,987,308,009,482 44.74% 18,766,754,868,571 38.75%

Total assets 37,366,108,654,179 100% 44,669,873,386,034 100% 48,432,480,673,629 100%

4
 29.69 33.49
Liabilities 11,094,739,362,252 % 14,968,618,181,670 % 14,785,358,443,807 30.53%

Current
liabilities 10,639,592,009,462 28.47% 14,442,851,833,360 32.31% 14,212,646,285,457 29.35%

Long-term
liabilities 455,147,352,790 1.22% 525,766,348,310 1.18% 572,712,158,332 1.18%

Total
stockholders’ 70.31 66.51
equity 26,271,369,291,927 % 29,731,255,204,364 % 33,647,122,229,822 69.47%

Total
liabilities and
equity 37,366,108,654,179 100% 44,699,873,386,034 100% 48,432,480,673,629 100%

Mộc Châu Milk - BALANCE SHEET

DECEMBER 31, 2018, 2019, and 2020

2018 2019 2020

VND % VND % VND %

Current assets 920,008,745,494 81.14% 871,146,017,234 81.25% 1,035,835,997,796 84.72%

Long-term assets 213,842,736,144 18.86% 201,068,240,278 18.75% 186,760,081,520 15.28%

1,133,851,481,63
Total assets 8 100% 1,072,214,257,512 100% 1,222,596,079,316 100%

32.22
Liabilities 365,999,329,385 32.28% 345,474,233,711 % 310,686,053,788 25.41%

Current
liabilities 363,951,329,385 32.10% 342,561,033,711 31.95% 250,595,700,494 20.50%

Long-term 2,048,000,000 0.18% 2,931,200,000 0.27% 60,090,353,294 4.91%

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liabilities

Total
stockholders’ 67.78
equity 767,852,152,253 67.72% 726,740,023,801 % 911,910,025,528 74.59%

Total liabilities 1,133,851,481,63

and equity 8 100% 1,072,214,257,512 100% 1,222,596,079,316 100%

Review of current assets (Figure 1), the company's short-term assets of Vinamilk after the end of
2019 will not be much different when only 0.32% increase compared to 2018. However, 2020 seems to
have many differences when the figure increased by 5.91% compared to 2019 (up 6.23% compared to
2018. On the rival side, short-term assets of Moc Chau company tend to increase gradually but not as
much as Vinamilk when in 2019). increased 0.11% and 3.58% (2020) compared to 2018. The difference
between these two companies is not too big because the change is not much in Cash and cash equivalent,
short-term financial investments, accounts receivable - short-term, inventories, other current assets.

Regarding the cash and cash equivalents of Vinamilk, from 2018 to 2020, the company has
increased and then decreased, but overall, at the end of 2020, it increased by 0.29% compared to 2018.
Short-term financial investment has decreased slightly at the end of the year 2019 but will increase much
in 2020 (12.54% compared to 2018). Account receivable- short-term decreased by 1.71% from 2018 to
2020. In addition, the company decreased by 4.66% in inventories and 0.22% in other current assets
until the end of 2020.

Compared to Moc Chau, Vinamilk has a lower cash and cash equivalent in 2019(6.88% vs
5.97%). However, Vinamilk has stability. Both have the same short-term financial investment increase
overall from 2018-2019, of which Vinamilk is 12.54% and Moc Chau is 9.03%. Moc Chau's accounts
receivable - short term tends to increase when reaching 11.89% in 2020 (nearly double from 6.44% in
2018) and Moc Chau's inventories decrease from 30.83% to 16.72% during these years. This shows that
Moc Chau's inventory reduction ratio is better than that of Vinamilk. In addition, the other current assets
of Vinamilk did not increase as strongly as its competitors when Moc Chau increased by 3.5% (reaching
4.37% in 2020 compared to 0.87% in 2018).

6
 Regarding non-current assets (Figure 2), both Vinamilk and Moc Chau tended to decrease
gradually in the three years from 2018 to 2020. For Vinamilk, the difference in the first two years was
only 0.24%, but in the third year, the difference is quite large compared to the previous two years
(6.23% compared to 2018). Moc Chau is similar to Vinamilk when the difference in 2018 and 2019 is
0.11%, but not as much at the end of 2020 as the rival company when it is only 3.58% lower than in the
first year of 2018.

In the sub-categories of total non-current assets, Vinamilk has up to three items of a downtrend
and three items of unstable trend. Three items, including fixed assets, investment property, and long-
term financial investment, tend to have a lower rate in 2020 than in 2018. The remaining items in long-
term assets tend to fluctuate throughout 2018-2020. 

Compared to Moc Chau, Vinamilk's fixed assets have a reduced rate of 7.17% while that of Moc
Chau is 5.96% in the three years 2018-2020. The key difference is that Moc Chau's long-term work in
progress rate in 2019 was 0%.

It can be seen that Vinamillk's short-term liabilities increased from 28.47% in 2018 to 32.31% in
2019 while the opposite with Moc Chau decreased from 32.10% to 31.95%. In this last year, both
Vinamilk and Moc Chau had a decrease rate when both were only 29.35% and 20.50%. However, Moc
Chau decreased more than Vinamilk to 8.49%. In terms of short-term debt to total debt, Vinamilk has
increased from 95.90% in 2018 to 96.13% by the end of 2020. Meanwhile, the difference between 2018
and 2020 of Moc Chau is 18.78% in the downward direction. This shows that Moc Chau's short-term
debt settlement is better than Vinamilk.

In terms of non-current liabilities, Vinamilk has a decrease rate in 2019 (down 0.04% compared
to 2018), but this ratio did not make any difference when it remained 1.18% in 2020. Regarding the side
of rival companies, although not too much different in two years 2018 and 2019 (0.09%), it increased
significantly at the end of 2020 (increased 4.73% compared to 2018)  In terms of long-term debt to total
debt, Moc Chau showed that the company did not handle well after 2019 when long-term debt at the end
of the year reached 19.3%. Meanwhile, Vinamilk can solve it stably when it reduces 0.23% from 2018
to 2020.

7
 Finally, Vinamilk had a decrease in total stockholder's equity compared to Moc Chau when it fell
from 70.31% to 69.47% (0.84%).In 2020, GTNFoods Company indirectly owned shares in Moc Chau
milk through its subsidiary VILICO (Vietnam Livestock Corporation). Since then, Moc Chau has been
invested and raised the equity level to 74.59% (from 6.87% in 2018). However, Vinamilk is the parent
company holding over 75% of shares in GTNFoods.

3) ANALYSIS OF THE INCOME STATEMENT

Vinamilk - Income Statement

For the year ended 31st, December

2018 2019 2020

Cod
Names e VND (%) VND (%) VND (%)

Revenue from
sales of goods
and provision 56,400,229,726,71
of services 1 52,629,230,427,284 100% 7 100% 59,722,908,393,236 100%

Revenue
deductions 2 67,280,456,692 0.13% 82,106,963,973 0.146% 86,622,167,689 0.15%

56,318,122,762,74
Revenue 10 52,561,949,970,592 99.87% 4 99.854% 59,636,286,225,547 99.85%

29,745,906,112,11
Cost of sales 11 27,950,543,501,501 53.11% 7 52.741% 31,967,662,837,839 53.53%

26,572,216,650,62
Gross profit 20 24,611,406,469,091 46.76% 7 47.114% 27,668,623,387,708 46.33%

Financial
income 21 759,917,391,001 1.44% 807,316,707,483 1.431% 1,581,092,655,317 2.65%

Financial
expense 22 118,007,001,674 0.22% 186,969,681,828 0.332% 308,569,328,835 0.52%

8
In which:
Interest
expense 23 51,367,418,852 0.10% 108,824,893,987 0.193% 143,818,465,177 0.24%

12,993,454,552,85
Selling expense 25 12,265,936,906,433 23.31% 2 23.038% 13,447,492,622,165 22.52%

G&A expenses 26 1,133,300,231,790 2.15% 1,396,302,416,955 2.476% 1,958,155,456,285 3.28%

Net operating 12,797,090,115,37

profit 30 11,876,513,440,752 22.57% 2 22.690% 13,539,380,824,416 22.67%

Other income 31 450,247,329,980 0.86% 249,446,259,179 0.442% 212,386,195,135 0.36%

Other expense 32 275,064,504,609 0.52% 250,826,735,994 0.445% 233,230,932,527 0.39%

Results of
other activities 40 175,182,825,371 0.33% -1,380,476,815 -0.002% -20,844,737,392 -0.03%

Profit before 12,795,709,638,55

tax 50 12,051,696,266,123 22.90% 7 22.687% 13,518,536,087,024 22.64%

Income tax
expense-
current 51 1,874,905,255,483 3.56% 2,238,365,796,113 3.969% 2,310,674,009,890 3.87%

Income tax
expense-
deferred 52 -28,838,670,599 -0.05% 3,011,961,553 0.005% -27,870,156,991 -0.05%

Net profit 10,554,331,880,89

after tax 60 10,205,629,711,239 19.39% 1 18.713% 11,235,732,234,125 18.81%

Basic earnings
per share 5295 5478 4770

Moc Chau Milk - Income Statement

For the year ended 31st, December

9
 2018 2019 2020

Names Code VND % VND % VND %

Revenue from
sales of goods
and provision of
services 1 2,484,796,888,263 100% 2,562,406,601,059 100% 2,825,554,281,941 100%

Revenue
deductions 2 3,099,972,622 0.12% 3,987,033,429 0.16% 2,606,681,764 0.092%

Net Revenue 10 2,481,696,915,641 99.88% 2,558,419,567,630 99.84% 2,822,947,600,177 99.908%

Cost of sales 11 2,014,999,720,838 81.09% 2,071,913,387,984 80.86% 1,934,684,702,507 68.471%

Gross Profit 20 466,697,194,803 18.78% 486,506,179,646 18.99% 888,262,897,670 31.437%

Financial income 21 43,068,005,339 1.73% 47,754,045,218 1.86% 41,113,006,037 1.455%

Financial
expense 22 - - 161,917,808 0.01% 64,215,261 0.002%

In which:
Interest expense 23 - - 161,917,808 0.01% - -

Selling expense 25 277,687,938,427 11.18% 321,788,261,204 12.56% 596,632,396,883 21.116%

G&A expenses 26 26,556,991,235 1.07% 23,346,164,361 0.91% 29,480,449,517 1.043%

Net operating
profit 30 205,520,270,480 8.27% 188,963,881,491 7.37% 303,198,842,046 10.731%

Other income 31 7,004,521,654 0.28% 9,994,309,240 0.39% 4,654,702,834 0.165%

Other expense 32 11,728,075,262 0.47% 13,351,377,383 0.52% 10,285,939,791 0.364%

Results of other
activities 40 -4,723,553,608 -0.19% -3,357,068,143 -0.13% -5,631,236,957 -0.199%

Profit before
tax 50 200,796,716,872 8.08% 185,606,813,348 7.24% 297,567,605,089 10.531%

Income tax 51 20,155,926,020 0.81% 18,664,584,468 0.73% 16,832,308,939 0.596%

10
expense- current

Net profit after

tax 60 180,640,790,852 7.27% 166,942,228,880 6.52% 280,735,296,150 9.936%

Basic earnings
per share 3,019 2,601 3,772

Firstly, sales of Vinamilk grew steadily between 2018 and 2020. Although covid-19 has affected
the average income of Vietnamese people, down 2.3% compared to 2019 (GSO,2020), it has not had a
big impact on Vinamilk's revenue. Moreover, in 2020, Vinamilk successfully exports to two major
international markets, China and Dubai (Vinamilk, 2020), which also contributes to increasing
Vinamilk's revenue.

In terms of total revenue from sales of goods and provision of services, Moc Chau has also
increased steadily like Vinamilk. However, it has not grown as well and as strongly as Vinamilk. As the
net revenue growth rate of the second shift is almost the same, in terms of the first year, Vinamilk has a
lower revenue deductions growth rate than Moc Chau (0.02%) ). The next year from 2019 to 2020,
although the two have different rates of total operating revenue of the previous year, the difference is
only about 0.23%

Secondly, Vinamilk's cost of sales is not as high as that of Moc Chau, which over the years is
53.11%, 52.74%, and 53.53%. However, once again Vinamilk has had a stable ratio over the years when

11
the difference is not more than 1%. On the side of Vinamilk's rival, they have a 0.23% decline from
2018 to 2019 and a drop to 68.47% in 2020.

Thirdly, from the financial statements of both companies, the total expenses could be calculated
by the sum of COGS, financial expenses, selling expense, G&A expenses, and other expenses. Looking
at the amount of money, the total spending of both companies increased continuously over the past three
years with the highest spending reaching nearly 47,915 billion VND for Vinamilk and 2,571 billion
VND for Moc Chau. A glimpse at the chart (Figure 3) reveals that in general, Vinamilk’s total expenses
did not experience significant fluctuation over three years. From 2018 to 2019, the total expenses
declined from 79.31% to 76.55%, then the figure went up to 2.76%, standing at 80.24% in 2020. The
total expenses of Moc Chau milk, on the other hand, witnessed a downward trend during 2018-2020 in
which the figure went down remarkably from 93.81% to 90.99%.

In addition, there was a continuous increase in Vinamilk's G&A expenses, 2.15%, 2.48 %, and
3.28% respectively in the year 2018, 2019, and 2020. Explaining this can be because Vinamilk is
increasingly expanding its business activities, so they should better manage these expenses so that
increased expenses do not lead to reduced profits

In terms of non-operating income, Vinamilk’s net other income underwent a significant downfall
while Moc Chau had some fluctuations during the period. Specifically, the net other income of Vinamilk
in 2018 was nearly 175,182,825,371VND before declining to (-1,380,476,815) VND in 2019 and
(20,844,737,392)VND in 2020. Regarding the competitor, there was an increase of 71% in Moc Chau’s
net other income in 2019, then the figure fell to (5,631,236,957) VND in 2020. Despite the disparate
trend in net other income, the net profit before tax of both companies increased in the last year of the
period, respectively, 13,518,536,087,024VND in Vinamilk and 297,567,605,089VND in Moc Chau.

Finally, in term of earnings per share, Vinamilk's EPS increased slightly, starting at 5,295VND
in 2018 and growing to 5,478VND in 2019, showing that the company had performed well during this
period. Unfortunately, this figure has dramatically dropped to almost 13% compared to the previous
year, at 4,770VND. The basic EPS of Moc Chau milk shows a completely different trend as it declined
in 2019 and climbed up again in 2020. Specifically, the figure started at 3,019VND, then declined to
12
2,601VND one year later. However, in 2020, EPS recovered, which peaked at 3,772VND and gained an
increase of 45% YoY. Overall, despite the opposition in the trend, Vinamilk EPS that stockholders
earned was still higher than those of Moc Chau milk.

4) RATIO ANALYSIS

a. Liquidity ratios
A liquidity ratio is a financial measure that is used to assess a company's capacity to meet its
short-term financial obligation. The statistic is used to evaluate if a company's current assets, or liquid
assets, can cover its current liabilities.

i) Current ratio

Current assets
Current ratio = (times)
Current liabilities

The current ratio is equal between the

current assets and current liabilities of the
Vinamilk company. Generally, the ratio for all three years is greater than 1.0, which shows that the
company has a large number of current assets and can pay short-term debts.
According to the column chart above, the current ratio from 2018 to 2020 increased
approximately 0.16 times. Comparing 2019 with 2018, the ratio of Vinamilk declined 0.22 times;
however, the current ratio increased 0.38 times in the next year. In 2020, the situation partly improved a
little bit, so the current ratio was raised to 2.09 times.

ii) Quick ratio

Quick ratio = Current assets−Invetories

Current liabilites
(times)
13
 The quick ratio measures the company’s ability to pay the obligation without selling products or
obtaining extra funding. Vinamilk’s quick ratio decreased in 2019 and increased in 2020. So, compared
between the year 2019 and 2018, and the year 2020 with the year 2019, which have the opposite
relationship; dropped 0.04 times and increased 0.37 times, respectively.

iii) Cash ratio

Cash ratio = Cash∧cash equivalent (times)

Current liabilities

The cash ratio also is one of the

most effective ways to measure the firm’s
liquidity. Because it only considers cash or
cash-equivalent holdings—leaving other
assets, such as accounts receivable, out of
the equation—the cash ratio is a more
cautious look at a company's capacity to cover its debts and liabilities than other liquidity ratios.  In
general, If Vinamilk's current ratio and quick ratio show a fluctuating trend, the cash ratio shows an
increasing trend between 2018 and 2020. The cash ratio of the business faced a raise in 2018-2019 and
slightly decreased in the year 2019-2020, which developed at 0.04 and dropped 0.01 times, respectively.
In the end, Vinamilk's cash ratio lost its position and was surpassed by Moc Chau.

Compared with the Moc Chau company, the ratios including current ratio, quick ratio, Moc Chau
company has a higher ratio than Vinamilk. The current and quick ratio of Vinamilk just increased 0.16
times and 0.33 times, while Moc Chau’s data increased 1.60 and 1.75 times, respectively during 3 years.
Although the cash ratio in 2018 and 2020, Moc Chau has a lower ratio than Vinamilk; in 2019, Moc
Chau has a ratio 0.04 times higher than Vinamilk. 

b. Efficiency ratios

14
 The efficiency ratio is commonly used to assess how well a corporation manages its assets and
liabilities daily.

Vinamilk Units 2018 2019 2020 2019 2020

compared compared
to 2018 (Δ) to 2019 (Δ)

Inventory Times 5.06 5.97 6.52 +0.91 +0.55

turnover 

Day's sales in Days 72.16 61.14 56.01 -11.02 -5.13

inventory 

Receivable Times 11.33 12.51 11.50 +1.18 -1.01

turnover 

Day's sales in Days 32.22 29.19 31.75 -3.03 +2.56

receivables 

Total asset Times 1.41 1.26 1.23 -0.15 -0.03

turnover

i) Inventory turnover

15
 The inventory turnover of Vinamilk has witnessed an increasing trend over 3 years. The
inventory turnover rose to 0.91 times in 2019 but just rose slightly in 2020, which is 0.55 times. The
day’s sales in inventory and inventory turnover have a close relationship. Inventory increased in the last
3 years, while the day’s sales in inventory have a negative number. Day’s sales in inventory measure the
average days the business can sell their merchandise. Thus, the day’s sales in inventory declined in 2020
compared to the year 2018. Although the data from 2018 to 2919 decreased to approximately 12 days to
sell the inventories, compared to 2019, in 2020, it only needed around 6 days to sell out its inventories
completely. As the day’s sales in inventory decrease, it is a positive effect for the Vinamilk company.

ii) Receivable turnover

  The receivable turnover had increased from 2018 to 2019, but the ratio dropped in the next year.
However, the ratio increased to 12.51 times in 2019, compared to 2018 which increased about 1.18
times. In contrast, the ratio declined in the year 2020 about 1.01 times. The data of the day’s sales in
receivable goes oppositely with receivable turnover. Different from day’s sales in inventory, the more
days to collect the money, the more negative effect on the receivable parts.

iii) Total asset turnover

This metric assesses how well a corporation uses its assets to generate sales revenue or sales
income. In general, the total asset turnover decreases between 2018 and 2020. To be more specific,
compared to 2019 and 2018, and between 2020 and 2019, the ratio declined 0.15 and 0.03 times,
respectively. The data proves that from 2018 to 2020, Vinamilk faced difficulties in effectively
managing assets to produce sales.

Moc Chau Units 2018 2019 2020 2019 2020

compared compared
to 2018 (Δ) to 2019 (Δ)

Inventory Times 5.76 7.05 9.46 +1.29 +2.41

turnover 

16
 Day's sales in Days 63.33 51.76 38.58 -11.57 -13.18
inventory 

Receivable Times 33.99 35.89 19.42 +1.9 -16.47

turnover 

Day's sales in Days 10.74 10.17 18.80 -0.57 +8.63

receivables 

Compared to the Moc Chau company, Vinamilk has only the days of day’s sales in receivables,
which was the greater days than Moc Chau. In contrast, the inventory turnover, receivable turnover, and
the total asset turnover, Moc Chau has a higher ratio than the competitor. Moc Chau’s inventory
turnover ratio increased more strongly than Vinamilk during the three years. Besides, about the day’s
sales in inventory, from 2018 to 2020, Vinamilk sold the inventories lower and slower than Moc Chau.
Next, the average days that Moc Chau business receives the money is also lower than Vinamilk. In
terms of total asset turnover, Moc Chau’s ratio is always higher than Vinamilk and the ratio increases
year by year.

c. Long-term solvency ratios

Solvency ratio (Leverage ratio): is a metric that evaluates a company's capacity to meet its
financial leverage in the long run. The ratios can address the problem of the company's ability to pay its
obligations by comparing debt levels to equity, assets, and earnings.

i) Total debt ratio

Total assets−Total equity

Total debt ratio = (times)
Total assets

Year 2018 2019 2020

Vinamilk 0.3 0.34 0.31

17
Moc Chau 0.32 0.32 0.25

A debt ratio is a calculation that compares total debt to total assets to determine a company's
leverage. Moc Chau's debt ratios have been stable over the last three years, with the same ratio of 0.32 in
2018 and 2019, and a minor decrease to 0.25 in 2020. Vinamilk was in a similar condition, with an
average debt ratio of roughly 0.32 and no hint of significant change throughout the period. Both
companies had lower-than-one ratios, indicating that they had more assets than liabilities and could
satisfy their obligations.

ii) Debt/Equity

total debt
Debt to equity = (times)
total equity

Year 2018 2019 2020

Vinamilk 0.42 0.5 0.44

Moc Chau 0.48 0.48 0.34

The debt-to-equity ratio is a measure of how much a company relies on debt rather than wholly-
owned cash to fund its operations. Overall, there is not much of a difference between the two businesses
when it comes to this ratio. Vinamilk’s average debt to equity ratio was 0.45 while Moc Chau’s was
0.43. The given number informs that Vinamilk and Moc Chau seem to have the ability to take control of
the debt.

iii) Equity multiplier

18
 Total assets
Equity multiplier= (times)
Total equity

Year 2018 2019 2020

Vinamilk 1.42 1.5 1.44

Moc Chau 1.48 1.48 1.34

The equity multiplier is a risk index that reflects how much of a company's assets are funded by
equity rather than debt. It is computed by dividing the total asset value of a firm by the whole
shareholders' equity. Vinamilk's equity multiplier rate has been fluctuating during the given period,
rising from 1.42 in 2018 to 1.5 in 2019, then falling to 1.44 in 2020. It was brought out by significant
growth in the company's assets and a slight increase in its equity. Moc Chau, on the other hand, has
shown a negative tendency across the time, falling from 1.48 in the first two years to 1.34 in the third,
indicating the company has lower financial leverage over the years. Moc Chau seemed to finance its
assets with debt rather than equity.
iv) Times interest earned

EBIT
Times interest earned = (times)
Interest

Year 2018 2019 2020

Vinamilk 235.62 117.58 94.0

Moc Chau 1,146.30

The TIE ratio is a calculation that determines a company's ability to meet existing debt based on
current income. The figure shows how many times a company's pre-tax earnings might cover its interest
costs. Vinamilk's data reflect a declining record, with a drop from 234.62 to 117.58 in just one year,
followed by a gradual decrease to 94.0 in 2020. This demonstrates the company's financial strength in

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 terms of its ability to meet its current interest payment with available earnings. The downward trend,
however, suggests a minor gain in profit before taxes and a significant increase in interest expenditure. 
Moc Chau's time interest earned cannot be estimated because there is no data on the financial spending
between 2018 and 2020. Apart from 2020, Moc Chau's ratio was 9.7 times bigger than Vinamilk's, with
a remarkable proportion of 1,146.30.

v) Cash coverage ratio

EBITDA
Cash coverage ratio = (times)
Interest

Year 2018 2019 2020

Vinamilk 256.33 129.96 103.67

Moc Chau 1,533.50

The cash coverage ratio, which is expressed as a ratio of the cash available to the amount of
interest to be paid, and is used for calculating the amount of cash available to pay for a borrower's
interest expense. It can be seen that Vinamilk’s cash coverage reduced rapidly in 2019, from 256.33
down to 129.96, and continued to drop to 103.67 in 2020. Despite the downward trend, Vinamilk is still
showing great financial growth for the past years of operation. Due to a lack of ratios, Moc Chau is
difficult to compare. Its 2019 figures demonstrate a substantial gap in cash coverage, which is almost 12
times higher than Vinamilk's. The situation could be explained by the fact that the corporation has more
liquid assets and can more easily fund its debt.

d. Profitability ratios

Profitability ratios are a group of financial indicators that are used to evaluate a company's ability
to create earnings over time in relation to its revenue, operational costs, balance sheet assets, or
shareholders' equity.

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 i) Profit margin
Net income
Profit margn = (%)
Sales

Profitability is a measure that is used to assess how profitable a company or commercial activity
is. It shows the proportion of sales that resulted in a profit. From 2018 to 2020, Vinamilk's profit margin
has been consistent, varying between 18% and 19%. Moc Chau, on the other hand, cannot compared to
Vinamilk since its rates are less than 10% in three years. Vinamilk clearly makes a lot more money than
its rival. Although Moc Chau's profit margin increased by 3.41% from 2019 to 2020, it is still
significantly lower than Vinamilk's.

ii) Return on assets (ROA) and Return on equity (ROE)

Nincome
Return on assets = (%)
Total assets

Net income
Return on equity = (%)
Total equity

21
 The rate of return required to establish if investing in a company makes sense is determined by
the ROA, which informs investors about the company's performance. Over time, Vinamilk has had a
greater ROA rate than Moc Chau, but it is decreasing significantly. This is due to Vinamilk's impressive
increase in total assets. The company is certainly more efficient in terms of profit generation. Having a
higher ROA means that the firm is earning more money on less investment.

From 2019 to 2020, Moc Chau's ROA increased considerably. Its ratio is nearly as high as
Vinamilk's, at around 23 percent in 2020, compared to only 15.57 per cent in 2019. Moc Chau is still
working hard to make the most of its resources.

The return on equity (ROE) is a measure of a company's profitability to its equity. Vinamilk's
ROE has been falling due to a significant increase in its shareholder equity. In 2018, 2019, and 2020, the
company's ratio decreased from 38.85 per cent to 35.5 per cent and finally to 33.39 per cent respectively.
Nonetheless, the total ROE ratio remains steady. Vinamilk's ROE is higher than its competitor's,
indicating that the company has more financial leverage.

Whereas the rise in Moc Chau's ROE showed that the business has taken on more debt. The
company's ROE declined slightly from 23.53 per cent in 2018 to 22.97 per cent in 2019 and increased
up to 30.79 per cent in 2020.

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 e. Market value ratios

The market value ratio assesses the economic health of companies and helps determine the value
of company’s stock.

i) Price-to-book ratio

The price-to-book ratio (P/B ratio) is being used to illustrate the difference between the firm’s
market capitalization and its book value (Fernando, 2021).
Price of share
Price-to-book ratio = (times)
BVPS

Total stockholder s ' equity

Book value per share = (VND)
Number of shares outstanding

VINAMILK

2018 2019 2020

BVPS (VND) 15,086 17,073 16,102

P/B (times) 7.95 6.82 6.76

MOC CHAU MILK

2018 2019 2020

BVPS (VND) 13,508 12,248 13,651

P/B (times) - - 5.29

The P/B ratios of Vinamilk in 2018, 2019, and 2020 were 7.95, 6.82, and 6.76 times respectively.
This means that, from the period 2018-2020, Vinamilk's stock price has been valued 6.7 times higher
than the book value of the business, and the investors were willing to pay a premium of more than 6.7
times for Vinamilk’s stock. However, Vinamilk's P/B ratio decreased about 1.13 times from 2018 to

23
2019 and 0.06 times between 2019-2020. This can be explained that during the COVID-19 pandemic,
almost every business will suffer unexpected losses from the lockdown. 
On the other hand, there was no competition in the stock price between Vinamilk and Moc Chau
in 2018 and 2019 since Moc Chau company just entered the stock market on December 18, 2020
(Vietstock, n.d). In 2020, the P/B ratio of Moc Chau was 5.29 times, lower than that of Vinamilk.
However, the official listing of shares with stock code MCM is an important event marking the maturity
in business and corporate governance of Moc Chau Dairy Company.

5) CONLUSION

In conclusion, when compared to the overall economic and industry conditions, as well as
competitor operations, Vinamilk has had consistent financial performance, profitable business results,
and successful business outcomes for the three most recent years of 2018, 2019, and 2020. Vinamilk
shows that it can manage its financial commitments efficiently, despite fluctuations in liquidity ratios
and long-term solvency ratios. The efficiency ratio, on the other hand, shows that Vinamilk is growing
slower than its competitor, Moc Chau milk, in terms of transferring assets, inventories, and receivables
into sales. Profitability ratios demonstrate how various firms differ in size and growth stage. Vinamilk
has a huge scale, but in comparison to its rivals, its ROA and ROE ratios have not risen year over year.
This indicates how fiercely competitive the dairy industry has become. To summarize, due to its
superior market ratios, Vinamilk continues to dominate the market.

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6) REFERENCES

a) Fernando, J. (2021, January 23). Price-To-Book (P/B Ratio). Retrieved November 22, 2021,
from https://www.investopedia.com/terms/p/price-to-bookratio.asp

b) GSO. (2021, January 6). COVID-19 IMPACTS ON LABOUR AND EMPLOYMENT SITUATION
IN QUARTER IV OF 2020. Retrieved November 24, 2021, from
https://www.gso.gov.vn/en/data-and-statistics/2021/01/covid-19-impacts-on-labour-and-
employment-situation-in-quarter-iv-of-2020/

c) Giap, V. (2021, January 21). Mộc Châu Milk vượt gần 80% kế hoạch lợi nhuận năm 2020.
Retrieved November 20, 2021, from https://bnews.vn/moc-chau-milk-vuot-gan-80-ke-hoach-loi-
nhuan-nam-2020/184399.html

d) Moc Chau Milk. (2018). Báo cáo tài chính kiểm toán năm 2018. Retrieved November 12, 2021,
from https://mcmilk.com.vn/wp-content/uploads/2020/06/Mộc-Châu-Milk_BCTC-kiểm-toán-
năm-2018-_Ký-sốv.pdf

e) Moc Chau Milk. (2019). Báo cáo tài chính kiểm toán năm 2019. Retrieved November 12, 2021,
from https://mcmilk.com.vn/wp-content/uploads/2020/06/Mộc-Châu-Milk_BCTC-kiểm-toán-
năm-2019_Ký-số.pdf

f) Moc Chau Milk. (2020). Báo cáo tài chính kiểm toán 2020. Retrieved November 12, 2021, from
https://mcmilk.com.vn/wp-content/uploads/2021/02/MCM_Báo-cáo-tài-ch%C3%ADnh-được-
kiểm-toán-năm-2020.pdf

g) Nguyen, M. (2021, April 27). Vinamilk, a Vietnamese top brand in liquid milk for many
consecutive years. Retrieved November 15, 2021, from https://vietnamtimes.org.vn/vinamilk-a-
vietnamese-top-brand-in-liquid-milk-for-many-consecutive-years-30980.html

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 h) Vinamilk. (2019, March 4). Audited Consolidated Financial Statement 2018. Retrieved
November 12, 2021, from https://www.vinamilk.com.vn/static/uploads/article/1553165148-
45d4eafd8cc8e9eae59e5cc4306b0d3bc654c9b047c1bd403ec13bd4041aef90.pdf

i) Vinamilk. (2020a, February 29). Audited Consolidated Financial Statement 2019. Retrieved
November 12, 2021, from https://www.vinamilk.com.vn/static/uploads/article/1582951466-
f0616b494ccaf82021a51af885b49bae7c14f7920487da7031951233d2180ed7.pdf

j) Vinamilk. (2020b, April 20). Vượt trở ngại covid, Vinamilk xuất khẩu sữa qua Trung Quốc. Vn.
Retrieved November 24, 2021, from
https://www.vinamilk.com.vn/vi/thong-cao-bao-chi/2068/vuot-tro-ngai-covid-vinamilk-xuat-
khau-sua-qua-trung-quoc
k) Vinamilk. (2020c). Audited Consolidated Financial Statement 2020. Retrieved November 12,
2021, from
https://static2.vietstock.vn/data/HOSE/2020/BCTC/VN/NAM/VNM_Baocaotaichinh_2020_Kie
mtoan_Hopnhat.pdf

l) Vietstock. (n.d.). Viet Nam Dairy Products Joint Stock Company. Retrieved November 15, 2021,
from https://finance.vietstock.vn/VNM/profile.htm

m) Vietstock. (n.d.-a). Symbol Industry Seed Moc Chau Dairy Cattle Corporation JSC (UPCoM:
MCM). Retrieved November 20, 2021, from https://finance.vietstock.vn/MCM-ctcp-giong-bo-
sua-moc-chau.htm

26
7) APPENDIX
Figure 1:

  2018 2019 2020

  Vinamilk Moc Vinamilk Moc Vinamilk Moc

Chau Chau Chau

Current Assets 55.02% 81.14% 55.34% 81.25% 61.25% 84.72%

Cash and cash equivalent 4.07% 2.04% 5.97% 6.88% 4.36% 1.75%

Short-term financial 23.21% 40.96% 27.84% 39.11% 35.75% 49.99%

investment

Accounts receivable - 12.42% 6.44% 10.08% 6.65% 10.71% 11.89%

short-term

Inventories 14.79% 30.83% 11.16% 27.40% 10.13% 16.72%

Other current assets 0.53% 0.87% 0.30% 1.21% 0.31% 4.37%

Figure 2:

  2018 2019 2020

  Vinamilk Moc Vinamilk Moc Vinamilk Moc

27
   Chau Chau Chau

Long-term assets 44.98% 18.86% 44.74% 18.75% 38.75% 15.28%

Fixed assets 35.77% 18.34% 33.34% 18.06% 28.60% 12.38%

Long-term work in 2.32% 0.04% 2.11% 0.00% 2.19% 2.39%

progress

Long-term financial 2.86% 0.01% 2.21% 0.01% 2.01% 0.01%

investments

Other non-current assets 3.55% 0.47% 6.88% 0.69% 5.77% 0.49%

Figure 3:

Peer evaluation:

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 Thanh Mai Diem My Minh Quan Huyen Trang Total
Thanh Mai 25% 25% 25% 25% 100%
Diem My 25% 25% 25% 25% 100%
Minh Quan 25% 25% 25% 25% 100%
Huyen 25% 25% 25% 25% 100%
Trang

29