loading

Capital Structure – Case Study In Thang Long Mechanical Four And Construction Joint Stock Company

Capital structure – case study in Thang Long mechanical four and construction joint stock company

ENGAGEMENT

I would like to engage that I made this thesis by myself. The figures and information in the thesis are all honest. TABLE OF CONTEND ENGAGEMENT i LIST OF ABBREVIATED  WORDS v PREFACE 1 CHAPTER  1: OVERVIEW OF CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE 3 1.1. Capital structure 3 1.1.1. Definition 3 1.1.2 The theories of capital structure 4 1.1.2.1. Modigliani and Miller approach 4 1.1.2.2. Capital Structure theory – Traditional approach. 5

CHAPTER 2: SITUATION OF CAPITAL STRUCTURE OF  COMPANY THANG LONG MECHANICAL FOUR AND CONSTRUCTION JOINT STOCK COMPANY 19

2.1 Overview of company Thang Long mechanical four and construction joint stock company 19 2.1.1 The basic information about company Thang Long mechanical four and construction joint stock company 19 2.1.1.1. The basic information. 19 2.1.1.2. The organization chart of  Thang Long mechanical four and construction joint stock company. 20 2.1.1.3. The system of accounting of the company. 21

PICTURE 2.2: SYSTEM OF ACCOUNTING OF THE COMPANY 21

2.1.2 The business characteristics of company Thang Long mechanical four and construction joint stock company. 22 2.1.2.1. Material and technical facilities. 22 2.1.2.2. Situation of  material supply. 23 2.1.2.3. The capability of skilled workmanship of Thang Long mechanical four and construction joint stock company. 24 2.1.2.4. Output market and the ability to compete of the company. 24 2.1.3 Overview of financial situation and performance of company Thang Long mechanical four and construction joint stock company . 25 2.2 Situation of capital structure of  Thang Long mechanical four and construction joint stock company . 27 2.2.1. Situations of capital structure 27 2.2.1.2. The situation of  financial leverage 34 2.2.2. Evaluating the effect of capital structure to the firm 35 2.2.2.1. The effect of financial leverage  to ROE. 35 2.3 Assessment of the company’s capital structure decisions 41 2.3.1 The achievements 41 2.3.2 The shortcomings and reasons 42 2.3.2.1. The shortcomings. 42 2.3.2.2. The reasons 43

CHAPTER 3: SOLUTIONS FOR  ESTABLISHING THANG LONG MECHANICAL FOUR AND CONSTRUCTION JOINT STOCK COMPANY ’ TARGET CAPITAL STRUCTURE 45

3.1. The development strategies of Thang Long mechanical four and construction joint stock company 45 3.1.1 Social and economic background. 45 3.1.2.1. Objectives of business operation 46 3.1.2.2. The orientation of business 46 3.2.  Solutions for  establishing Thang Long mechanical four and construction joint stock company ’ target capital structure 47 3.2.1.Improving capital structure by decreasing gearing. 47 3.2.2.Strengthening the management of recievable account to recover capital in short term. 50 3.2.3. The solutions to  improve the situation of net working capital of the company. 52 3.2.4. The company should have solutions to improve the performance in next fiscal year to  increase the benefit for shareholders. 53 3.3. The petitions for the government. 54 CONSCLUTION 55 BIBLIOGRAPHY 56

LIST OF ABBREVIATED  WORDS

DFL : Degree financial leverage
EBIT    : Earning before interest and tax
EPS : Earning per share
NWC       : Networking capital
ROA : Return on assets
ROE     : Return on equity
ROS : Return on sale
WACC   : Weight average cost of capital

LIST OF TABLE AND PICTURE

PICTURE 2.1: THE ORGANIZATION CHART OF THE COMPANY

TABLE 2.1: THE CAPABILITY OF SKILLED WORKMANSHIP

THANG LONG MECHANICAL FOUR AND CONSTRUCTION JOINT STOCK COMPANY

TABLE 2.2: SOME FINANCIAL RATIOS OF THE COMPANY IN RECENT YEARS.

TABLE 2.3: SIZE, STRUCTURE AND FLUCTUATION OF CAPITAL STRUCTURE FROM FISCAL 2013 TO 2015.

TABLE 2.4: GEARING AND DEBT/EQUITY OF THE COMPANY FROM FISCAL 2013 TO FISCAL 2015

TABLE 2.5:  DEGREE OF FINANCIAL LEVERAGE FROM FISCAL 2013 TO FISCAL 2015

TABLE 2.6: THE EFFECT OF FINANCIAL LEVERAGE TO ROE

TABLE 2.7:  THE RATIOS OF THE ABILITY TO PAY FOR CREDITORS OF  THE COMPANY

TABLE 2.8:  THE SITUATION OF NET WORKING CAPITAL OF THE COMPANY

PREFACE

In the market economy, to start a business, people need to the certain  amount of  capital. Capital is the important condition with business process of the company. Morever, when the competition between companies in the market is more and more violent, the decisions which relate to capital management will influence on the success of the companies, so they are not easy for managers. And one of those decisions is to establish capital structure to maximize the value of the company and owners. It also decides the company’s product ability in the market.

Because of Understanding the importance of establishing capital structure, I decided chose the topic “ Capital structure – case study in Thang Long mechanical four and construction joint stock company”.

  • Research problem.

Research problem is about overview and the solutions of capital structure in Thang Long mechanical four and construction joint stock company: capital structure and target capital structure with its affects.

Tham khảo thêm một số bài viết khác phần tải luận văn miễn phí

  • Thực trạng tình hình quản trị vốn lưu động tại công ty cổ phần thương mại miền núi thanh hóa
  • Tiêu giảm giá thành, nâng cao chất lượng dịch vụ, tăng sức cạnh tranh của doanh nghiệp
  • Tổ chức công tác kế toán bán hàng và xác định kết quả bán hàng tại TNHH Đầu tư Xây dựng Việt Phát tại Hà Nội
  • Purpose and thesis questions

  • Systematizing the issues about capital structure in the company and the factors affecting target capital structure.
  • Researching  situation of capital structure :

+ Studying and evaluating about  situation of capital structure in Thang Long mechanical four and construction joint stock company

+ Proposing solutions for establishing capital structure in mechanical four and construction joint stock company

  • Scope of research

  • About space: Studying about capital structure and solutions for establishing capital structure for Thang Long mechanical four and construction joint stock company.
  • About time:  the figures provided by financial statements of the   company in 2014 and 2015.
  • Methodology

The thesis uses the methodologies: analytical method, statistical method, experimental method…to clear the topic of the thesis.

  • Thesis structure

Apart from preface, conclusion and bibliography,the thesis structure includes three major parts:

Chapter 1: Overview of capital structure and target capital structure

Chapter 2: Situation of capital structure of  company in Thang Long mechanical four and construction joint stock company

Chapter 3: Solutions for establishing the Thang Long mechanical four and construction joint stock company ‘s target capital structure.

Because of limited time and knowledge, my thesis also has some mistakes in research process. I would like to express my thanks to PhD. Pham Thi Thanh Hoa and the managers of Thang Long mechanical four and construction joint stock company because they helped me finish this thesis.

CHAPTER  1

OVERVIEW OF CAPITAL STRUCTURE AND TARGET CAPITAL STRUCTURE

1.1. Capital structure

1.1.1. Definition

In market economy, a company is able to use many different sources of capital to satisfy its demand in the business. However, it is very important to combine sources of capital to establish the best capital structure for the value objective.

Capital structure is a term that refers to the propotion of capital sources in total of capital which the company finances for its business operations. In other word, it can show how a company decides to finance its assets by various sources of capital like: borrowing from banks, issuing shares or bonds, retained earning from the business…

The dicision about capital structure is very important with the company because:

  • Capital structure of the company affects the cost of capital.
  • Capital structure affects the company’s return on equity or earning per share and financial risk.

Vui lòng chia sẻ bài viết này để nhìn thấy link Download file Word miễn phí