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ABSTRACT
Vietnam’s economy is changing to market economy. Institutions in general
as well as accounting and financial institutions in particular are not strong enough
to build up an effectively financial foundation with authentic and explicit
information. The number of listed enterprises in stock market has just increased in
years. Information disclosure, especially financial information is still relatively
poor and not fairly positive. Completing financial analysis indicator system at the
beginning will lead the market in the right way, eliminating risks for relevant
subjects and the whole economy. This contributes to establish modern and global
market integration for the national finance.
After a period of researching, aimed to roles, objective and subjective
demands related to financial analysis indicators, I determined to choose the topic
for my PhD dissertation as “Completing the financial analysis indicator system in
listed companies in Vietnam securities market”.
Research targets of this thesis are problems of corporate finance, corporate
finance analysis, system of corporate finance analysis criteria and real situation as
well as opinions of completing financial analysis indicator system within listed
firms in Vietnam’s stock market.
Scope of this thesis is limited within non-financial listed joint stock
companies in Vietnam’s stock market. Real illustrated data was taken in some
fields as real estate, pharmacy and food processing.
Results of the thesis concentrated on solving problems below:
- Systemization of basic theories about financial analysis indicator system in
enterprises in general and listed joint stock companies in particular.
- Establishment of content, method and financial indicator within listed joint
stock companies in Vietnam securities market.
- Dramatic analysis and practicing evaluation of financial analysis indicator in
listed joint stock companies in Vietnam securities market, followed by offering
solutions to complete those.
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1.1.1.2 Corporate Finance Analysis
To perform informational function and management roles in an effective way,
finance analysis content needs to include general evaluation of financial situation;
financial structure and capital assurance analysis for business activities; solvency
analysis; operation capacity analysis; profitability and growth analysis; financial
risk analysis and financing forecast.
1.1.2 Analysis indicator system of corporate finance
1.1.2.1 Establishment principles of analysis indicator system of corporate
finance
1.1.2.2 Viewpoint in analysis indicator system of corporate finance
Financial analysis indicators system needs to be divided into two types to
maximize its functions in management as indicators for general finance analysis
and for deep finance analysis
In details, the dissertation considers that indicators for general finance analysis
consists of indicators which evaluating capital mobilization, financial
independence level, solvency and profitability.
1.1.2.3 Indicator system in general financial analysis
General evaluating of financial situation of firms guarantees at least in aspects
including: capital mobilization, financial independence level, solvency and
profitability.
1.1.2.4 Indicator system in specialized financial analysis
Specialized and detailed financial information is used for significant and cautious
decisions; hence, specialized analysis is extensively necessary. As mentioned
above, indicators system in specialized financial analysis comprises criteria
reflecting financial structure, solvency by time, effectiveness of business, financial
risks analysis and financial forecast, and money-flow analysis indicator
1.2 Financial analysis indicator system for listed joint stock companies in

2.1.1.2 Listed joint stock companies in Vietnam securities market
2.1.2 Characteristics of listed joint stock companies in Vietnam securities
market

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2.1.2.1 Facts of listed joint stock companies in Vietnam securities market
2.1.2.2 Characteristics of listed joint stock companies in Vietnam securities
market
Listed joint stock companies in Vietnam securities market that were almost found
by capitalization of state owned enterprises have just operated. Information
disclosure and explicitness of listed joint stock companies are still limited.
2.1.2.3 Classifications of listed joint stock companies in Vietnam securities
market
- Classification by time
- Classification by industry, business operating sector
- Classification by scale/charter capital
2.2 Current state of financial analysis indicator system in joint stock
companies in Vietnam securities market
2.2.1 Financial analysis indicator system in joint stock companies in Vietnam
securities market under law provision
Information disclosure about the financial circumstances in general and the
system of financial analysis indicators system of joint stock companies (JSC)
listed on Vietnam's stock market in particular, was launched along with the
securities laws No70/2006 / QH-11. Information about the financial situation was
announced at the time of initial public offering (IPO) and at the end of each fiscal
year, in addition to publication of the extraordinary when they arise. According to
Clause 1, Article 15 of the Securities Law, companies released financial
information for the first time in prospectuses.
A prospectus is a document or electronic data publishing accurate, honest,
objective information related to the securities offering or listing of an issuer.

exercise for existing shareholders, relevant information to corporate governance.
2.2.2 Current situation of financial analysis indicator system in joint stock
companies in Vietnam securities market
2.2.2.1 Financial analysis indicator system in joint stock companies in real-
estate industry

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Currently, the total number of JSC in real estate filed listing on Vietnam's
stock market is 27. With 27 stock codes on different scales of capital, the smallest
capital is RCL (Cho Lon Real Estate JSC) with VND 29 billion and the largest one
is OGC (Ocean Group JSC ) with VND 2,500 billion. For a group of companies
which have over 200 billion of capital in real estate industry, the thesis examined
Vincom Corporation (stock code: VIC, capital: VND 1,996,272,380,000), Thu
Duc Housing Development JSC (stock code: TDH, capital: VND
378,750,000,000), Kinh Bac City Development Holding Corporation (stock code:
KBC, capital: 1,991,243,300,000). For the rest (capital is under VND 200 billion),
the thesis analyzed Tu Liem Urban Development JSC (stock code: NTL, capital:
VND164, 000,000,000), Ba Ria-Vung Tau Housing Development JSC ( stock
code: HDC , capital: VND 81,280,000,000), Construction JSC No.3 – Vinaconex
3 (stock code:VC3, capital: VND70,960,200,000).
In the stock codes VIC, KBC, TDH, indicators of financial analysis used include:
- Indicators reflecting assets structure is ratios which show the proportion of each
asset in total property. Thereby, managers assess the reasonableness of allocating
assets. Assets structure is examined in general, between short-term and long-term
assets without analyzing each part of the above property in detail. To reflect the
assets structure, some companies in this sector using the following two criteria:
Current asset over total asset indicator, with following formula:
Current Asset * 100 Current
Asstes/Total
Assets

structure, capital structure, solvency, profitability. In these groups, there are some
differences in calculating in each firm. For examples, in the capital structure
indicators, instead of using “liabilities / total equity”, HDC identified two criteria:
“liabilities / owners’ equity" and "advances from customers/ equity". For
profitability, besides profit margin on sales, profit margins on equity, few
companies use profit margin on capital ratio as well.
2.2.2.2 Financial analysis indicators system of listed joint stock companies food
manufacturing and processing
2.2.2.3 Financial analysis indicators system of listed joint stock companies in
pharmaceutical industry
Unlike industries mentioned above, financial analysis indicators system in the
pharmaceutical industry is quite plentiful reflecting different aspects such as
capital structure, financial risk, and solvency, profitability, and operation profit
and growth indicator. 9
2.3 Evaluating current situation of financial analysis indicators system of
joint stock companies listed in Vietnam securities market
2.3.1 The reflection range
Financial analysis indicators announced by listed JSC are criteria reflecting assets
structure, capital structure, solvency, profitability; however, it has not actually
completed. Executives need information on capital using policy, Thus, the
previous financial analysis indicators have not shown the effectiveness of listed
firms. Specifically, for each group of listed JSC in the above sectors as the
following:
Real estate industry: Financial analysis indicators system is classified into four
groups: indicators of asset structure, capital structure, solvency and profitability.
Thereby, we could collect information on the using assets, capital mobilization
policies, solvency and profitability of businesses. Indicators in the same group of

criteria. Besides, calculations of indicators are not exhaustive, such as stock VC3
publishing profit after tax on capital ratio.
2.3.3 Disclosure of financial analysis indicators
The publication of financial analysis indicators is compulsory information in
prospectuses and annual reports. However, in reality, some companies announced
them and some did not. Indicators have been not disclosure fully among listed
firms, such as stock NTL did not announce criteria reflecting the asset and capital
structures. In contrast, same financial indicators are published twice with different
names in the same group. Current ratio and liquidity ratio are names of the same
financial analysis criteria; however, they have been published simultaneously. 11
CHAPTER 3
POINT OF VIEW AND SOLUTION TO IMPROVE FINANCIAL
ANALYSIS INDICATOR SYSTEM IN LISTED JOINT STOCK
COMPANY IN VIETNAM SECURITIES MARKET
3.1 Point of view to improve financial analysis indicator system in listed joint
stock companies in Vietnam securities market
3.1.1 Financial analysis indicator system must be public and transparency to all
related objects
3.1.2 Financial analysis indicator system must be simple and straightforward
3.1.3 Financial analysis indicator system must be timely and objective
3.2 Solution to improve financial analysis indicator system in listed joint stock
companies in Vietnam securities market
3.2.1 Complete indicator system that analyzes general financial status of joint
stock companies listed in Vietnam securities market
3.2.1.1 Complete indicator system that generally analyzes general mobilization
status of stock companies listed in Vietnam security market
Capital mobilization status of listed company strongly affects to subjects

the company, so that using solvency ratio is considered as liquidity test for
company. Solvency indicator includes: total asset ratio, current ratio, quick ratio,
cash ratio, due debt ratio. Meaning and calculation of these ratios as following:
Total asset/Debt ratio, it has significant with total current asset of listed company.
At the period financial report has finished, total current asset can be paid for the
debts at that time. Total asset, liability items are taken from code 270 and 300 in
balance sheet.
Current ratio, measures value of short term assets (cash, inventory, account
receivable, short term investment, ) with short term debt which has to pay in
short accounting term. Short term asset, short term debt items are taken from code
100 and 310 in balance sheet.

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Quick ratio, measures value of short term asset which deducted inventory, with
short term debt in accounting year. Short term asset, inventory, short term debt is
code 100, 140 and 310 in balance sheet
Cash ratio, measure quickly reaction for payment. Cash and cash equivalency,
short term debt is code 110 and 310 in balance sheet.
Quickly payment due debt ratio, shows that cash and cash equivalency can be paid
for due debt. Cash and cash equivalency are code 110 in the balance sheet. Due
debts are summarized from detail accounting customer debt, suppliers, and due
long-term debt
Due debt ratio shows emergent situation of payment carried out by cash and cash
equivalent of listed company. Cash and cash equivalency can be taken like above
index, total debts have requirement to pay debt includes due debt, or overdue debt
such as suppliers, other borrowing…
3.2.1.4 Complete indicator system that analyzes general return ratio
By real survey, group of indicator that reflects return ratio of joint-stock company
listed in Vietnam stock market still has some restrictions. A solution with real
estate area – agree with that indicators of ROE, ROA, ROS must use profit after

Real estate area - indicators of capital structure: agree with the formula for
calculating liabilities on capital rather than only debt divide total capital as stock
of the TDH, and (debt – advances payment from customer)/equity of the code
HDC. Manufacture and food processing - indicators of asset structure: current
accounting regime (Decision 15, 20/03/2006) changed name of current asset, fixed
asset to short term asset, long term asset, so VDL should change to be appropriate
with the system. Pharmacy area - company in this group have different
benchmarks, so to be uniform and data is compared, an important solution is that
these companies should have united benchmarks of financial analysis. Financial
structure is considered at asset structure aspect, capital structure and relationship
between asset and capital. Therefore, intensive analysis of financial structure is
deeply analyzing factors that form asset, capital and their relationship.

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Analyzing asset structure of listed company: the appropriation of asset structure
is measured by proportion of each asset in total asset, detail of each proportion and
comparison between asset items. Where cash item and cash equivalency are from
code: 110; short-term investment is from code: 120; short term receivable is from
code: 130; inventory is from code: 140; other short term asset is from code: 150;
long term receivable is from code: 211; fixed asset is from code: 220; investment
real estate is from code: 250; long term asset is from code: 260; in the balance
sheet. With detail of each item, company’s long term asset gives information of
suitable capital structure for each type of company. For example: real estate area,
proportion of real estate in total asset is much more than others; pharmacy,
inventory accounts for higher proportion. Indicators analyzing asset is used for all
the listed companies, however, real data of these companies of different area will
have its own financial situation.
Analyzing capital structure of listed company: the same as analyzing asset
structure, the efficient and optimization in mobilizing is showed by propotion of
each detail item in total capital. Where liability is from code: 300; short term

leverage and effective using of equity, analysis the sensitivity of financial leverage
and the relationship with business leverage.
3.2.3.3 Indicator system analyzes financial balance to ensure funding
To obtain information about funds for operation, company is not falling into the
financial imbalances, analysts often use following criteria: net working capital,
coefficient of regular funds, coefficient of temporary funds, coefficient of equity
against regular fund.
3.2.3.4 Indicator system for analyzing financial risk
Financial risks associated with financial activities and the level of using debt of
listed company. That is the risk that the owner incurred by using debts. Therefore,
when considering the financial risks, analysts generally consider risk of settlement
debt and the effect of debt structure to the profitability of listed companies.
Content financial risk analysis includes: Risk analysis for debt payment,
Correlation between financial risk and business performance.

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3.2.3.5 Indicator system for analyzing payment
For general information about the solvency of listed company which is mentioned
above, thesis deeply analysis of financial indicators to provide information on the
status of payments to suppliers, debt collection situation from the customer at
specific time, and how long for payment.
Criteria for evaluating payment situation reflects the amounts that companies
take appropriate capital of the creditors (lenders can be suppliers, employees,
government, the internal unit, banks, credit institutions ) and appropriated by the
debtor (the debtor may be customers, affiliates, government,). There are 2
coefficients between debts receivable against payable. Which items of accounts
receivable, accounts payable are taken from the code: 131, 211 and 300 in the
balance sheet.
Indicator of the short-term payments analysis, similar to other benchmarks which
reflect general payment, indicators reflect the degree to appropriate capital or be

The last criteria that managers, investors notice when analyze company’s finance
is the return on equity. However, this indicator is the combination of many factors.
There are some unexpected cases that hiden after “superficial glamour” of return
on equity are signature of go down in business operation. A carefull analysist is
not allow to ignore this sign. The thesis proposal that we should use the following
indicators: Performance using the residual value of fixed assets, efficiency of
major inputs.
3.3 Condition to implement solution for the financial analysis indicator
system in listed joint stock company in Vietnam security market
3.3.1 Listed joint stock company in Vietnam security market
In general, in long term, success or failure of a financial analysis
indicator system largely depends on listed joint stock companies, and comes from
their awareness about such issue. In term of market beginning, there are a huge
number of companies attracted by short-term benefits, which present through
disclosing information, analyzing or public information in a simple manner not

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compliance with standard. Such companies have not yet indentified the degree of
important for stock value in long term in term of stability and increasing value, or
those of analysis information to access potential investor group and international
stock market. To complete those tasks, these companies should take initiative in
completing financial analysis indicator system, even should be based on the need
of investors, order SSC and other Security Exchange to build a public information
system properly (could be made through Associate). Things to do right for listed
companies are constantly retraining and improving knowledge, experience for
their staff to have a good human resoures in term of having enough capabilities in
handling with assigned tasks. Specifically, financial and accounting staffs must
meet the requirements: have a qualifications in accounting, auditing, finance, tax;
a deep understanding of Vietnam law, international and regional leading practices;
foreing language proficiency and computer skills; updating securities, tax,

the SSC can easily participate in this schedule while working as an agency under
the Ministry of Finance. A system of indicators with a complete analysis will
quickly raise the standard and quality of information published, contribute to
stable the market and attract quality investors (such as foreign investors,
investment organizations, ), increase integration capabilities. One of the cause,
that make SSC confuse in monitoring and modernizing information technology
systems before, (monitoring manually, there is no automatic information systems
to public and monitor the real-time) is the standardization of data. The
benchmarking system of financial analysis will be connection between modules
that participate in the stock market, as well as the stock market and capital
markets, and other financial markets.
Next, the SSC should have a roadmap to guide for using benchmarking system of
financial analysis. In the early period, the application of benchmarking system of
financial analysis is mandatory, enforced to use throughout the system. Then
application objects have to evaluate to find and get benefit from application of this
indicator system. For example, research and analysis institutions easily and
quickly have the assessment of the market, on each industry or each business

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group and company; the issuer/listed company easily approach to the quality
investors without depending too much on consulting organizations or even
hanging public if ensuring that benchmarking system of financial analysis is
public as regulation; the multi-level activities monitor easily and smoothly through
synchronous system; investors feel less risky.
The application firstly should be started from the amendment and complete of the
regulations on information disclosure in stock market direction more closely. For
example, semi-annual financial statements (6 months) of a listed company must
have financial review of auditing company which is accepted. Semi-annual and
end year financial statements must have opinion of auditing company; every 6
months after the funding ends, the company must report to the SSC, the Stock

3.3.3 Stock Exchange
Compliance with management funtion, and direct involvment in the
activities of stock exchange trading floor. Stock Exchange must frequently inspect
the compliance of listed companies.

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CONCLUSION
To complete the financial indicator system for listed joint stock company in
Vietnam securities market is a critical requirement. Such compeletion must
comply with the strategy of securities market development toward 2020. Therefore
completing the financial indicator system for listed joint stock company must meet
those requirements: Ensuring financial analysis scientifically, clearly to meet the
demand for finanancial analysis of listed joint stock companies in particular, the
whole enterprises in general. Financial indicator system is classified in group
which have a high correspondence between each indicator group. Compliance
with accounting standard and law. Have a high level of academy, but easy to
apply, straightforward to proivde compelling and practical financial information.
Adapting to listed joint stock companies in Vietnam securities market. To clarify
the application of completed financial analysis indicator system, author has
conducted an analysis through published indicators in joint stock companies which
are listing in Vietnam securities market.
Moreover, author pointed out the policy condition of SSC, Stock Exchange
and Stock Exchange Center, listed joint stock companies to promote financial
analysis indicator sytem effectively and efficiently.

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PUBLISHED RESEARCH PORTFOLIO OF AUTHOR
1. (2007), Indicator system of public finance for implementing the rights of
employees in companies which have state contribution, Audit Research Magazine,
No 02 (June 2007), page 49-53.