1 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. 2 Thesis structure: “Completing financial analysis indicator system within listed companies in Vietnam securities market”. Apart from introduction, conclusion, author’s project list, references and bibliography, this thesis includes three main chapters: Chapter 1: Theoretical framework about financial analysis indicators system within listed firms in stock market Chapter 2: Facts of financial analysis indicators system within listed firms in Vietnam’s stock market Chapter 3: Personal opinions and solutions for completing financial analysis indicators system within listed firms in Vietnam’s stock market CHAPTER 1 THEORETICAL FRAMEWORK ABOUT FINANCIAL INDICATOR SYSTEM WITHIN LISTED COMPANIES IN SECURITIES MARKET 1.1 Financial analysis and indicator system of corporate finance 1.1.1 Corporate finance and corporate finance analysis 1.1.1.1 Corporate Finance According to this thesis, to approach and access the core issues of corporate finance with the aim to practice corporate finance effectively, corporate finance viewpoint does not only expose the internal relationships, but more importantly also needs to show outside under forms of financial circumstances, financial structure, solvency by time, financial leverage, financial risks, financing stability, effectiveness of business, etc. Therefore, the thesis determined that corporate finance in essence is the monetary relationship related to acting and transferring of financial resources; which creates value movement in business and makes changes in financial structure of enterprises. Action and transfer of resources in business creates differences in financial situations, financial structure, financial risks, effectiveness or money-flows for each enterprise. 3 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 securities market 1.2.1 Characteristics of listed joint stock companies in securities market 4 1.2.2 Financial analysis indicator system for listed companies in some countries 1.3 Financial analysis indicator system for listed companies in some countries 1.3.1. Financial analysis indicator system for listed companies in China 1.3.2. Financial analysis indicator system for listed companies in Singapore securities market 1.3.3. Regulations in Hong Kong securities market 1.3.4. Regulations in London Stock Exchange (LSE) 1.3.5. Regulations in American securities market 1.3.6. Lesson for Vietnam Based on researches of financial analysis indicator system within some listed joint stock companies in stock market in some countries, the lessons in completing financial analysis indicator system in listed join stock companies in Vietnam’s stock market are suggested as financial criteria are grouped clearly; financial indicators have data supported by financial reports and accounting management reports; there are financial analysis methods; the researched countries have associations or organizations and especially the analysis indicators of different industries are not the same. CHAPTER 2 FACTS OF FINANCIAL INDICATOR SYSTEM FOR LISTED JOINT STOCK COMPANIES IN VIETNAM SECURITIES MARKET 2.1 Overview of Vietnam securities market and listed joint stock companies in Vietnam securities market 2.1.1 History of Vietnam securities market and listed joint stock companies in Vietnam securities market 2.1.1.1Vietnam securities market 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 5 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. According to Decision 13/2007/QD-BTC, the indicators system of financial analysis of listed JSC including: Current ratio, Quick ratio , Debt / Total assets , Debt / Equity, Inventory turnover, Asset turnover, Return on Equity (ROE), Return on Assets (ROA). 6 In annual reports, listed JSC describe the business activities during fiscal year and present the results of them through financial statements (Balance sheet, Profit & Loss, Cash-flow statement) with the interpretation (notes to financial statements). According to the Circular 09/2010/BTC dated January 15, 2010, listed JSC announces the following information: Periodical information: quarter and annual financial statements audited by authorized institutions (Balance sheet, Profit & Loss Statement, Cash-flow statement, Notes to financial statements comply with accounting law, in case of notes to financial statement accompany with appendices, appendices must be disclosed with notes to financial statement) Abnormal information: listed JSC must disclose the following information as soon as possible (24 hours or 72 hours) after the occurrence of any of the following events: losing property valued 10% equity or more due to registration of transactions, resolutions of the General Assembly of shareholders or board of management related to increase or decrease of charter capital, capital contribution valued at 10% or more of the total assets of the listed organization on another organization; capital contribution valued at fifty percent (50%) or more of the total capital of contributed company. Required information: after receiving a request from the SSC or Stock Exchange, through publications, official websites of listed organization, through mass media or means of disclosure of the SSC, Stock Exchange. Also, it needs to publish information on transactions of shareholders, who are authorized to disclose information and major shareholders, on the last registration 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 7 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 = Total Asset With the above criteria, how much the value of current assets accounts for in total assets, current assets structure is consistent with the characteristics of each company. 8 Non-current asset over total asset indicator, with following formula: Non-current Assets * 100 Non-Current Assets/Total Asset = Total Asset With the above criteria, how much the value of non-current assets accounts for in total assets, non-current assets structure is consistent with the characteristics of each company. Through the survey, VIC was the only one which announced these two indicators with figures in 2008, 2009. - Indicators reflecting the capital structure (debt on equity ratio) - Indicators reflecting solvency. - Indicators reflecting profitability (net profit after tax / gross profit / net profit before tax) Financial analysis indicators of stocks NTL, VC3, HDC are as the following: Financial criteria, basically, are divided into four groups, including: asset 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 indicators is different between stock codes, such as group of indicators reflecting capital structure; indicators of solvency or profitability indicators of VIC, KBC, TDH; and NTL, VC3, HDC. Food manufacturing and processing: 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 indicators is different between stock codes, such as group of indicators reflecting capital structure; indicators of solvency or profitability indicators of AAM, VNM, ANV; and HHC, VDL, NGC. Pharmaceutical industry: Financial analysis indicators system in this sector is very different. Stock code DHG, TRA, MKV and OPC provide same financial criteria about asset structure, capital structure, solvency and profitability. These financial criteria described each aspect of corporate finance in detail through indicators systems of DMC and DCL. Thereby, we could collect information on 10 the using assets, capital mobilization policies, solvency and profitability of businesses operational capacity and growth of companies. 2.3.2 Quantity, names and calculating methods of indicators in each group Through the survey, names as well as calculating methods of financial indicators are inconsistent; therefore, comparisons of financial information among companies in each sector could not be implemented. Specifically, names of some indicators are not appropriate to the current accounting regime, for examples: stock DMC, DCL, VDL using current assets and fixed assets. Name of the indicators are inconsistent, such as criteria reflecting the profitability of NTL, VC3, HDC. There are also the same indicators but different calculating methods. Tow indicators: Liabilities / total assets and liabilities / total capital are used to reflect the structure of capital of stock VIC, KBC and TDH; or, greater differences are from calculating angles of stocks NTL, VC3 and HDC for capital structure 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 (shareholders, securities companies, potential investors) so scale of funding is an important factor to financial health. Mobilization information of listed company is expressed through following financial indicators: short-term liabilities, long-term payable, owner equity, and total equity. 3.2.1.2 Complete indicator system that analyze the general degree of independence 3.2.1.3 Complete indicator system that analyze general solvency ratio Through conducting survey of financial indicator from financial analysis, solvency ratio of: Real estate area - current ratio and short-term payable are different names from the same formula so that security code: KBC and VC3 cannot use this two benchmarks simultaneously. Manufacture and food processing - current ratio and short-term solvency ratio are different names from the same formula so that 12 security code: AAM and HHC cannot use these two benchmarks simultaneously. Pharmacy area - security codes in this group public different assessment benchmarks, so to come up with agreement and data can be compatible, the best solution is a united financial indicator system. Liquidity ratio of listed company is financial capacity to ensure payment for loans that having credit relationship with company. With executives, using financial indicators to manage business process, ensure that company operates efficiently, optimizes current capital and avoids losing solvency. This financial capacity exists under monetary manner (cash, deposits ), account receivable from other companies, assets can be transferred to cash quickly such as: goods, products, consignment. Company’s debts can be loan from banks, account payable and advance payment from buyer, postponed tax, unpaid salary. Liquidity of the asset depends on how easy to transfer from asset to cash without big loss. Solvency management is combination of payment requirement with payment deadline and other cash sources to avoid losing solvency with technical cause. How to calculate solvency is very important requirement because it expresses debt responsibility of 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. 13 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 tax, instead of gross profit like KBC. Besides, we call above indicators are rate instead of coefficient as VC3 does. Moreover, VC3 also calculate profit after tax divides charted capital. Manufacture and food processing – come up with formula of indicators that reflect ROE, ROA, and ROS. For example, VDL and NGC need to standardize formula and names of those indicators, replace coefficient with rate of return. At once, HHC need to use rate of return divide equity than charted capital. Pharmacy area, listed companies in this group use different benchmarks so that, to unite and compare the data, the necessary solution is having a united financial benchmarks system. Information of profitability of listed companies will affect to stock price strongly. To have earliest information, according to the thesis, indicators that assess rate of 14 return of listed company by: return of asset (ROA), return on equity (ROE) and return on sales (ROS). 3.2.2 Complete the intensive financial analysis indicator system Indicator of financial analysis system in dept allows managers compare and assess every activity and real situation in different period efficiently. More importantly, they can understand causes affect to the performance of corporation. With these benchmarks, thesis refers that there must have benchmarks of financial analysis system enough to see all the problems from every activity of company. These benchmarks must reflect financial structure of corporation, necessary of capital, payment situation, payment schedule according corporation timeline, efficient of operation, financial risk 3.2.3.1 Indicator system of analyzing financial structure A survey of the status of indicator system of financial analysis of joint stock companies listed on Vietnam's stock market, financial structure has been mentioned through benchmarks of asset structure, capital structure. With benchmarks that are not enough, its name is yet consistent with accounting standard, thesis have some ideas for improving the surveyed industries as follows: 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. 15 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 liability is from code: 310; short term debt is from code: 311; long term liability is from code: 330; long term debt is from code: 334; equity is from code: 400; retained earning is from code: 420; other fund is from code 430 in the balance sheet. Analyzing capital structure according to each item to provide detail information about type of capital which how much it is raised and propotion in capital. Companies will have the capital structure reflect the mobilization strategies of their own. But the actual situation survey of listed companies in each industry has its own characteristics. For example, real estate, liabilities proportion account for bigger proportion, especially long-term loans, whiles the pharmaceutical industry and manufacturing and food processing, the proportion of equity proportion is bigger. Besides the capital structure of joint stock companies listed on the stock market at different cycles of the market, the capital structure changes. 16 Analyzing the relationship of assets and capital: Sustainable financial structure is not only represented by assets structure and capital structure but also the relationship between asset and capital. The relationship between asset and capital is expressed through the correlation of factor of liabilities with assets, of assets with equity, reflecting the names, formulas and methods of analysis on above relationship. The indicators include: Short-term debt ratio against asset, long-term debt ratio against assets, the debt ratio compared to assets. 3.2.3.2 Indicator system of analyzing financial leverage Financial leverage is the concept used to reflect and further analysis of capital structure - an important method of the financial structure. When analyzing financial leverage, analysts focus more on the relationship between financial leverage and performance of listed companies through indicators reflecting effective of using equity. Thereby, we can identify a suitable and optimal capital structure for business. We will analysis financial leverage by contents: Analysis of fluctuation in financial leverage, analysis of the relationship between financial 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. 17 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 appropriated by suppliers or customers in a short time (this can be 1 month, quarter, less than one year). Items in the formula are retrieved from monthly, quarterly financial reports or detail receivable and payable in the ledger of listed company. Benchmark of the long term payment analysis, to evaluate in medium term and long term of appropriate capital in bussiness of companies and their partners. Detail coefficient is displayed in payment analysis sittuation table. Iterms in the formula are retrieved from yearly financial report where has detail receivable and payable of listed company. Speed of payment analysis, payment on right time so speed of payment is good, and vice verse. Because of information about speed of payment of listed company is very important, it measures cycles of receivable, payable and time to recover the debt and aslo payment. For detail: Evaluate speed of general payment, speed of short term payment, speed of long term payment, 18 3.2.3.6 Indicator system for payment analysis according to timeline It is necessary to balance between payment in timeline (monthly, quarterly, yearly, or longer) and items which can be used to pay to have good financial situation. With the target like this, coefficient of payment in timeline is calculated in each detail period in present and future. However, calculation of this coefficient with high confident value compare to real financial status of listed company is depend on accurate and timely data. For detail of items used to pay in next month, quarter, year are: cash and cash equivalency, short term financial investment, debt receivable in the future, inventory, And items which have to pay according to timeline such as: overdue debt (tax for goverment, short term loans, short term liability, suppliers’ debts, ); due debt; debts have to pay in next month, quarter, year. 3.2.3.7 Indicator system of analyzing business performance 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 19 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, accounting knowledge frequently; intensive knowledge of business operation. Also listed companies need to satisfy the level of true and fair of data on financial statement. Specifically, companies must hande well with following tasks: recording economic transactions accurately; check the consistency of data when calculating, move ledger, from entries to ledgers, from ledger to financial statement; auditing before public information; followed by preparation of facilities and equipment to work toward computerization. 3.3.2 Về phía Uỷ ban Chứng khoán Việt Nam The State Securities Commission (SSC) as the decisive role to create, orient, manage, monitor the development and operation of the stock market will play the most important role to improve benchmarking system of financial analysis in the listed company. Firstly, about the perception, SSC should determine this is important, is the foundation for a variety development goals for stock market such as: improving the legal framework for consistency; set up mechanisms to monitor the stock 20 market maturely, professional under international rules to protect the legitimate rights and interests of investors; increase transparency, "intelligent" investors; ensure the stability of the stock market, building infrastructure with synchronization of information technology and modernization; integrate with capital market in the region and international; Vietnam stock market is still in its infancy and SSC has too much work to do. It should arrange the order of priority what need to do and can do. Improving benchmarking system of financial analysis is one of the first things to do and can do in advance: Vietnam’s accounting and auditing system is in the last leg of the route in the direction of standardization consistent with the international standard and the practical conditions of Vietnam. It means that foundation for to build up benchmarking system of financial analysis has a relatively full. On the other hand, 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 [...]... financial indicator system to evaluate the liquidity of listed with accounting standard and law Have a high level of academy, but easy to companies in Vietnam securities market, Bank Magazine, No 24 December 2010, apply, straightforward to proivde compelling and practical financial information page 39-42 Adapting to listed joint stock companies in Vietnam securities market To clarify the application... through published indicators in joint stock companies which 4 (2010), Discussing on financial analysis indicator system applied for profitability of listed companies in Vietnam securities market, Market Price Journal, December 2010, page 31-34 are listing in Vietnam securities market Moreover, author pointed out the policy condition of SSC, Stock Exchange and Stock Exchange Center, listed joint stock... responsibility of market participant: reducing licensing issuance, acceptance, moving to registration regulation and reporting activities; forming a specialized division in charge of restructure and transformation (possibly under Market Development Agency); Building 21 22 CONCLUSION PUBLISHED RESEARCH PORTFOLIO OF AUTHOR To complete the financial indicator system for listed joint stock company in Vietnam securities...group and company; the issuer/listed company easily approach to the quality infrastructure for modern information technology system with criteria, investors without depending too much on consulting organizations or even international standards, uses to monitor the market by... of the Exchange, Stock Coordination Center operate as the enterprise model to improve regulations on information disclosure in stock market direction more closely For management and operational capacity for these organizations as independent legal example, semi-annual financial statements (6 months) of a listed company must entities Building automatic system to disclose information to receive, synthesize... detailed and oriented more severe than the current regulations: fines, rating information disclosure level, restricts the release of more document securities At the same time SSC should be empowered and stronger in handling with companies listed on market Finally, organization structure of SSC need to be reformed: have an appropriate roadmap to separate SSC from Ministry of Finance; segregation of duties, . and profitability of businesses operational capacity and growth of companies. 2.3.2 Quantity, names and calculating methods of indicators in each group Through the survey, names as well as. Vietnam securities market 2.1.1.1Vietnam securities market 2.1.1.2 Listed joint stock companies in Vietnam securities market 2.1.2 Characteristics of listed joint stock companies in Vietnam. criteria: “liabilities / owners’ equity" and "advances from customers/ equity". For profitability, besides profit margin on sales, profit margins on equity, few companies use profit