GROUP ASSIGNMENT

--------------------
Course : Corporate Finance
Class : Audit 58B
Topic: Financial statement analysis (FSA)
of Sabeco
Group Members:
1.Nguyễn Thảo Trinh
2.Nguyễn Hồng Quỳnh Chi
3.Trần Gia Thái
4.Nguyễn Tài Thu
5.Nguyễn Thế Vinh
Appendix
 I. Overview of Saigon Beer ( Sabeco)
1 Introduction:
In the trend of integration into the world economy today, the right strategy plays a
decisive role in the development and growth of enterprises. Saigon Beer is leading brand
name in Vietnam beer industry with about 140 years of developing. With continuous efforts
to improve the quality and diversification of products to adapt the expectations of consumers,
now Saigon Beer is holding the leading position in the beer industry of Vietnam and
continuously honored to be recognized as National Brand for 5 times. Saigon Beer is
recognized as National Brand and also honored to be the 351st member in Berlin Beer
Academy – one of the cradle of global beer culture.
2 Company profile:
Vietnamese consumers are familiar with the brand: Saigon Beer (or Bia Saigon) of
Saigon Beer-Alcohol-Beverage Corporation (Sabeco). In 2017, Saigon Beer has been over
142-year original history, 40-year brand building and development. Since that 142 milestone,
the yellow beer bubbles flow has continuously kept up the future way, always made
Vietnamese proud of their products.
The unique taste of Saigon Beer is the inspiring taste combined with the spirit of
Saigonese’s generosity and the rich of the Southern land, making it an in dispensable part of
everyday life.
From a small production of 21.5 million liters in 1977, after 39 years of development,
by 2016, Saigon Beer has achieved 1.59 billion liters of output, striving to achieve 1.66
billion liters til 2017. Although the market has appeared many famous beer brands in the
world, Saigon Beer is still Vietnam's leading beer market in Vietnam, on the way to conquer
the markets such as Germany, the US, Japan, the Netherlands and so on.
3 Products :
At first takeover period, Sabeco produced bottle of 610 ml Larue bottle and 330 ml
bottle of beer . Until now, Saigon beer has developed 8 type of products such as Saigon Lager
450 bottle, Saigon Export Beer bottle, Saigon Special bottle, Saigon Lager 355 bottle, 333
Premium, 333 beer can, Saigon Special can, Saigon Lager can.
4. Market :

Sabeco is one of the most popular beer producing company in Vietnam and concerned
by many other company. At present, Sabeco owns 24 brewers, of which 20 are in operation
and 4 are expected to operate in the future, reaching an annual capacity of 1.8 billion liters of
beer. Sabeco's beer consumption is 1.5 billion liters, accounting for 40% market share.
Sabeco became the "giant" in the market through the establishment and merger of many
breweries, especially in the south. The large plant network is the competitive advantage that
helps Sabeco distribute more efficiently than its rivals.
Sabeco is gaining market share of Habeco in the north. Particularly in the North,
Sabeco's market share increased from 10% in 2016 to 15.5% in the first 6 months of 2017,
while Habeco's market share declined from 55% to 50%.
5 The opponents:
The beer market in Vietnam has a high level of competition. Beside other beer
producers in countries such as Habeco, Carlsberg,... Sabeco has to compete with the very
famous imported products such as Heineken, Sapporo, AB InBev... In the last few years, this
segment has slowed down, at a modest 3.7%

II. Analysis of Sabeco financial statement

 1. Finance ratios (Using Horizontal analysis methods)

2013 2014 2015 2016 2017

Total revenue 28.195.436.162

30.109.925.126
27.165.691.555
30.603.273.412
34.438.171.049

Total expense 25.454.621.884

26.496.772.853
23.014.298.421
25.069.348.442
28.841.324.703

Earnings after tax 2.176.755.1013.049.093.0953.600.096.1264.654.588.7404.948.599.252

The bar chart and the table above illustrate the number of total revenue, total expense and
earnings after tax of Sabeco in 5 years’time starting 2013. In general, it is of apparent that the
number of total revenue, total expense have a fluctuation but net profit has a slight increase
More particularly, the revenue of Sabeco is amazing. Generally speaking, total revenue
has an upward trend and reaches a peak almost 34 billion dong in 2017. In 2015, despite what
Sabeco’s total revenue fell down 28 billion dong which was less 3 billion dong than 2014, it
had an excellent recovery after one year.
 At the same time, total expense witnessed a same move as total revenue. In 2015, it hit a
low point at 23 billion dong which was less 3 billion dong than 2014. But after one year, it had
an incredible recovery. Therefore, it can be seen that Sabeco has get the best out of resources
to get over the decrease in 2015 and get the amzing resurgence
In addition, the number of earnings after tax of Sabeco upsurge by 5 billion dong from
2013 to 2017. Sabeco’s net profit has archieved an impressive increased, its growth rates has a
descending trend. In details, the growth percentage of earnings after tax 2014, 2015, 2016 and
2017 are 40%, 18%, 29% and 6% respectively
On the whole, Sabeco has archieved great growth rates

2. Finance ratios (Using Vertical analysis methods)

2013 2014 2015 2016 201

Net 24.006.260.095 25.107.165.272 27.144.301.587 30.568.677.768 34.1

reven 100% 100% 100% 100% 100
ue
(sales)

COGS 75,6% 70,24% 72,16% 72,95 74,0

Gross 24,40% 29,76% 27,84% 27,05% 25,9

profit

Finan 1,56% 1,46% 1,54% 2,46% 1,48

cial
incom
e

Opera 13,64% 14,06% 16,33% 18,62% 17,7

ting
incom
e
Other 0,01% 0,17% 0,14% 0,05% 0,04
profit

Net 10,39% 12,14% 13,26% 15,23% 14,4

profit
after
tax

Total 21.107.768.332 21.944.148.678 23.501.657.828 25.933.367.040 29.1

expen 87,93% 87,40% 86,58% 84,84% 85,1
se

Total 100% 100% 100% 100% 100

asset

Fixed 35,24% 32,45% 27,14% 28,46% 22,7

asset

Liabili 41% 40,10% 34,80% 35,22% 34,4

ties

Long 8,33% 5,22% 3,47% 1,49% 0,87

term
liabilit
ies

Income statement analysis

As can be seen, Sabeco has a significant rise in total revenue by 10 thousands billions
VND from 2013 to 2017.

Both percentage of financial income and Operating income has increased and reached
the highest peak in 2016 but then dropped in 2017. Meanwhile, percentage of total expense
reached the lowest peak in 2016 but then increased in 2017. This lead to the significant grow
in net profit after tax in the period of 2013 to 2016 but this period also saw a sharp decrease
in 2017
Balance sheet analysis
 According the data table, total asset of Sabeco has fluctuated throughout the five years.
They
hit the bottom at about 21,67 thousand billion VND in 2014 and reached the peak at
nearly 23,01 thousand billion VND after three years in 2017. Otherwise, the percentage
of
fixed assets divided total assets has a downward tendency. Although it decreased In
three first years, fixed assets improved and made up more 28%. However, in next year, it
declined just about 22,75%.
During the last five years, total liabilities of Sabeco and the percentage of liabilities
divided total assets reduced sharply partly due to the decrease in long-term liabilities
from 5,22% to 0,87% throughout 5 years .

3. Financial ratio analysis

a. Liquidity ratio
Current ratio
Brief definition: The current ratio is a liquidity ratio that measures a company's ability
to pay short-term and long-term obligations. To calculate the ratio, analysts compare current
assets to current liabilities. Current assets include cash, accounts receivable, inventory and
other assets that are expected to be turned into cash in less than a year. Current liabilities
include accounts, wages, taxes payable, and the current portion of long-term debt.

Implication:
It can be observed that the current ratios of Saigon Beer in the timescale of 2013-2017
are not stable, these numbers increased sharply in 2015 then decresed in 2016.Then in 2017,
the number grown up as equal as number of 2016. So, it can be implied that for every $1.00
the company owes in current liabilities, it has about $1.6 worth of current assets. Therefore, if
the Sabeco short-term debt was due tomorrow, they would not have any difficulty in paying
their creditors. Moreover, they would simply use the cash in their bank account , redeem their
marketable securities, collect cash from customers who owe them (Accounts Receivable) and
sell more products to customers.

Yea 2013 2014 2015 2016 2017

r
 Cur 1,37988 1,39514 1,80397 1,65500 1,84910
rent ratio 4047 5089 1046 9325 7753

Quick ratio
Brief definition: The quick ratio, also known as the acid-test ratio, is a liquidity ratio
that further refines the current ratio by measuring the level of the most liquid current assets
available to cover current liabilities. The quick ratio is more conservative than the current
ratio because it excludes inventory and other current assets, which generally are more
difficult to turn into cash. A higher quick ratio means a more liquid current position.

Implication: As you can see on the table below, number of quick ratio from 2013 to
2017 is unpredictable. The first two year, the number is 1,1 then it went up at the middle of
the process. After that, it dropped slightly to 1,3 and rose to 1,5 in 2017.
This means; for every $1.00 owed by the company in short-term debt, it has average
$1.3 of current assets (excluding inventory). In theory, if the Sabeco Company did not sell
any more products, then it would have the ability to pay all of its short-term debt using its
current assets; other than inventory

Ye 2013 2014 2015 2016 2017

ar

Qu 1,10543 1,14792 1,5192 1,32657 1,57841

ick ratio 4574 3059 0915 9608 7736

Cash ratio
Brief definition: Creditors e cash ratio is the ratio of a company's total cash and cash
equivalents to its current liabilities. The metric calculates a company's ability to repay its
short-term debt; this information is useful to creditors when deciding how much. The cash
ratio is generally a more conservative look at a company's ability to cover its liabilities than
many other liquidity ratios because other assets, including accounts receivable, are left out of
the equation.
 Implication: As you can see, Sabeco has this kind of ratio ranges form 0,3 to 1,17. This
number jumped up quickly in 2015 and after that, it fell down to 0,5. The figure above
indicates that Saigon Beer Company possesses not enough cash and cash equivalents to pay
off its current liabilities.
Because This means that Sophie only has enough cash and equivalents to pay off 30%,
20%, 117%, 53% and 57% of her current liabilities from 2013 to 2017 . Sabeco is highly
liquid and can easily fund its debt.

Year 2013 2014 2015 2016 2017

Cash ratio 0,305 0,24 1,17 0,53 0,58

1.5
Current ratio
1 quick ratio
cash ratio
0.5

0
2013 2014 2015 2016 2017

b. Asset Management Ratio

2014 2015 2016 2017

Inventory turnover 9,919 10,325 11,010 12,266

Days sale in
inventory 36,797 35,350 33,152 29,757

Account receivable
(A/R) Turnover 26,710 23,725 24,958 33,862
 Average Collection
Period 13,665 15,384 14,624 10,779

Fixed asset turnover 3,570 4,636 5,596 6,828

Total asset turnover 1,240 1,255 1,500 1,660

Asset Management Ratios attempt to measure the firm's success in managing its assets
to generate sales.

Inventory Turnover and Days Sale Inventory

The Inventory Turnover and Days sale in Inventory measure the firm's management of
its Inventory. A higher Inventory Turnover Ratio is indicative of better performance since this
indicates that the firm's inventories are being sold more quickly. As can be seen, Sabecco’s
inventory turnover has increased throughout 5 years which can indicate that Sabecco ‘s sale
performance is improved, inventories are being sold more quickly. Also, Days sale in
inventory has decreased significantly in the period of 5 years which show the decrease in the
number of days that an inventory item sits on the shelf until it is sold.

=> Because products of Sabecco is beer so these number show that Sabecco’s
management of its inventory has improved and grew throughout 5 years
Receivables Turnover and Average collection period
The Receivables Turnover and Days' Receivables Ratios assess the firm's management
of its Accounts Receivables and, thus, its credit policy. In general, the higher the Receivables
Turnover Ratio the better since this implies that the firm is collecting on its accounts
receivables sooner. In the table, receivable turnover has dropped from 2014 to 2015 but then
rose significantly from 2015 to 2017. Also, average collection period reached a peak in 2015
and then decreased in the following years. In brief, the firm seems to struggle in receivables
collection in 2015 but the trend show that they has improved a lot in the following year.
=> Sabecco has good receivables collection. It can also mean that the company has
improved and enhanced their collection policy, which could actually impact the revenues.
Fixed Assets Turnover & Total Assets Turnover
The Fixed Assets Turnover Ratio and total assets turnover measures how productively
the firm is managing its Fixed Assets and Total asset to generate Sales. The period saw the
significant increase in this ratio which means that the firm has improved their capacity of utilize
their asset to generate sales revenue

Asset management ratio os Sabeco

(2013-2017)
40,000

30,000

20,000

10,000

0
2014 2015 2016 2017

Iventory turnover Days sale in iventory account receivabla Turnover

Average Collection Period Fixed asset turnover Total asset turnover

c. Debt management ratio

Debt ratio
Brief definition: The debt ratio is a financial ratio that measures the extent of a company’s
leverage. The higher the debt ratio, the more leveraged a company is, implying greater financial
risk. At the same time, leverage is an important tool that companies use to grow, and many
businesses find sustainable uses for debt.
Implication:
It can be seen that there is a fall in debt ratios of Sabeco in the timescale of 2013-2017.
In details, these numbers ranges from 0.34 to 0.41 which is average proportion. Thus, it can be
implied that in 2013, about 40% of company’s assets are made by debt and similar to the
remaining years. If a company has a debt ratio between 0.3 and 0.6, it means that the company
have good financial health. The result is that Sabeco has an easy time borrowing money;
creditors trust that it is in a solid financial position and can be expected to pay them back in
full

2013 2014 2015 2016 2017

Debt ratios 0.41 0.40 0.35 0.35 0.34

Debt to equity ratio

 Brief definition: Debt to equity ratio is a measure of a company’s financial leverage. This
is such an important ratio that clearly spells out the amount of capital that has been provided
by the owners and the amount that lenders or any other investor has put in
Implication: The debt to equity ratio of Sabeco is quite low. Low debt-to-equity ratios
indicate that a company is not taking advantage of the increased profits that financial leverage
may bring.These numbers show that there is more capital/equity than debt, therefore, the
funding provided by creditors is less than the internal cash flow of Sabeco

2013 2014 2015 2016 2017

Debt to equity ratio 0.75 0.71 0.53 0.54 0.53

Times interest earned

Brief definition: Creditors would favor a company with a much higher times interest ratio
because it shows the company can afford to pay its interest payments when they come due.
Higher ratios are less risky while lower ratios indicate credit risk.
Implication: As you can see, Sabeco has this kind of ratio ranges from 28.1 to 145.9
(quite huge). Thus, Sabeco’s income is times greater than its annual interest expense and the
company totally can afford the interest expense on this new loan. In this respect, Sabeco doesn’t
present excessive risk, and the bank will likely accept the loan application

2013 2014 2015 2016 2017

TIE 28.1 37.8 59.7 70.7 145.9

 d. Profitability ratio

Earning ratios 2014 2015 2016 2017

Profit margin 12.14% 13.26% 15.23% 14.47%

ROA 14.52% 15.77% 21.97% 22.87%

ROE 26.12% 25.96% 33.8% 35.09%

Profit margin
The profit margin of SABECO 's shows that they managed their resources effectively.
Profit margin increased to 2016 then declined slightly because the profit was lower than
revenue growth; this was due to the rise in the cost of recent years. However the higher co-
efficientnet profit margins shows that SABECO is an enterprise that has potentialityin the
period of inflation.
ROA
ROA of SABECO from 2014-2017 are above 14% and 22.9% in the year 2017. This is
avery impressive number not only in Vietnam but also around the world. In addition , this
also shows the ability to maintain the company. Compared with many businesses in the same
field of Alcohol beverage in Vietnam, the profitability ratios of VNM are very impressive.
This shows that the company has used its assets effeciently in making profits for the
company.
ROE
ROE of SABECO fluctuated then increased significantly in recent years. In compared
with the number of the whole industry and the businesses listed on Vietnam's stock,
profitability of SABECO is very good and tend to sustainably grow.
Profitability that the Saigon Beer - Alcohol - Beverage Corporation has performed in
the period 2014-2017 is very good on all index and demonstrate the sustainable growth trends
over the years.
The Revenue is nearly 34.4 billion VND due to the development and exportation of new
products. More than that,Vietnam is still in top 5 of the world for the most comsumed of alcohol
so this alcohol beverage industy would be growth in the future.

Profitability ratio of Sabeco (2014-2017)

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2014 2015 2016 2017

Profit margin ROA ROE

e, Market value ratio

Market value ratios help evaluate the economic status of publicly traded companies and
can play a role in identifying stocks that may be overvalued, undervalued, or priced fairly.
Although a wide variety of market value ratios are in use, the most popular
include earnings per share, book value per share, dividend yield, and the price-earnings ratio.
Each of these measures is used in a different way, but when combined, they offer a pretty
accurate financial portrait of publicly traded companies.

Earnings Per Share

 Earnings per share measures a company's net income per share of outstanding stock,
indicating a company's profitability to investors. Calculate earnings per share by dividing the
company's net income by the number of outstanding shares (stock currently held by all
shareholders).

Year 2014 2015 2016 2017

Sabeco’s EPS 4,585 5,318 6,982.54 7,346.99

Growth in EPS is an important measure of management performance because it shows

how much money the company is making for it’s shareholders, not only due to changes in
profit, but also after all the effects of issuance of new shares (this is especially important
when the growth comes as a result of acquisition).

Book Value Per Share

The book value is a company's equity that does not include preferred stock divided by
the shares outstanding in the market.

Year 2014 2015 2016 2017

Sabeco’s Book 19,030 21,932 19,388.03 22,487.06

value per share

Price-Earnings (P/E) Ratio

P/E ratio = Market price per share / Annual earnings per share

Earnings generally are calculated by looking at the last four quarters of financial
results.

Year 2014 2015 2016 2017

P/E 0 0 28.31 33.93

If the PE is increasing then it means that the price is increasing faster than the earnings,
or that the earnings are falling faster than the price, or worst combination is price is
increasing whilst earnings are decreasing.
 Market value ratio of Sabeco (2014-2017)
40
35
30
25
20
15
10
5
0
2014 2015 2016 2017

Earnings Per Share Book Value Per Share Price-Earnings (P/E) Ratio

III. Conclusion
The financial analysis of Sabeco in the period from 2013 to 2017 show that Sabeco has
good growth rate in terms of sales revenue and net profit. This firm also has good financial
health and their financial ratio is good. They have high potential and enough resources to
grow in the future.

Therefore, The risk is quite low in this case so as Bank team, we can approve a long-
term from Sabeco