I.

Brief Introduction:
FPT Corporation is the largest information technology service company in Vietnam with
its core business focusing on consulting, providing technology and telecommunications
services.

1. History of formation and development (Key events):

 1988: FPT was established as a Food Technology Company.
 2002: Became a joint stock company.
 2014: Conducted the first M&A deal in foreign markets.
 2020: Elevate global position.
 2022: Promote M&A.
 2023:
 Conduct 04 M&A deals and make strategic investments
 Established FPT Automotive
 Launching FPT CFS solution

2. Business Fields:
 Technology
 Telecommunications
 Education

3. Management organization model:

 II. Brief Description of the Company’s current accounting policies:
1. Fiscal year: January 1 → December 31

2. Inventories:
Stated at the lower of cost (FIFO method) and net realizable value.
Applied the perpetual system.

Provision is made for obsolete, slow-moving, and defective inventory items.

3. Borrowings and finance lease liabilities

Classified into short-term and long- term on the consolidated balance sheet.

Borrowing costs are capitalized during the period of required time. Others are recognised
in the consolidated income statement when incurred.

Dividends are recognised as a liability in the consolidated financial statements.

4. Fixed assets:
Tangible fixed assets: are stated at historical cost (any expenditure that is directly
attributable to the acquisition of the fixed assets) less accumulated depreciation.

The depreciable amount (straight-line method) is the historical cost minus the estimated
disposal value.

Intangible fixed assets:

Amortization is calculated using the straight-line method. (Indefinite land use rights are
stated at cost and not amortized).

5. Receivables
Classified into short-term and long-term receivables based on their maturity date on the
balance sheet.

Provision for doubtful debts is made for each outstanding amount based on overdue days
in payment or the estimated loss.

6. Payables
Are classified into short-term and long-term payables on the balance sheet.

7. Capital and reserves

Owners’ capital is recorded according to the actual amounts contributed and the par
value of the shares.

8.Prepaid expenses
Prepaid expenses are recorded at historical cost and allocated to the income statement
using the straight-line method.

Expenses for deploying services for subscribers are charged using the straight-line
method over the estimated useful lives.

Others have been capitalized as prepaid expenses and are allocated to the income
statement using the straight-line method.

9. Accrued expenses
Include liabilities for goods and services received in the year but not yet paid for, which
are recorded as expenses in the reporting year.

10. Financial expenses

Are expenses incurred in the year for financial activities:
 Interest expenses
 Provision for diminution in value of investments in other entities
 Losses from foreign exchange differences.

11. Selling expenses

Represent expenses that are incurred in the process of selling products, goods, and
providing services.

12. General and administrative expenses

Represent expenses that are incurred for the administrative purposes.

13. Revenue recognition

Revenue from sales of goods: is recognised in the income statement with the “substance
over form” principle and allocated to each sale obligation.

Revenue from rendering of services: is recognised in the consolidated income statement

when the services are rendered.

Interest income: is recognised on the basis of the actual time.

Profits income (from dividends/profits): is recognised when the Group has established
receiving rights from investees.
14. Unearned revenue
Recognized as revenue in the consolidated income statement.

15. Sale deductions:

Deducted from revenue in the year they occur.

16. Cost of goods sold and services rendered

Recorded on the basis of matching with revenue and on a prudence basis.

III. Summary of the company’s financial situation & business results in the last
three years.
Revenue
 Net revenue from sales and service: stable growth rate of around 20-25% in

⇒ FPT has effective sales policies, particularly the expansion to the Japanese
2022 and 2023

market (revenue growth of 52.2% in 2023) and the focus on providing IT

services.
 Financial income in 2022 increased significantly by 57%. By 2023, it continued

⇒ FPT has increased its financial investment in the last 2 years. This has
to increase to reach VND 2336 billion

contributed a relatively good profit to the company.

 After-tax net profit grew steadily by about 20-21% each year, reaching VND
7,788 billion in 2023.
Cost and Expense:
 Cost of goods sold increased over the years at a rate equivalent to the increase in

⇒ The gross profit margin remained at a high level (around 38-39%).

revenue (increased by 21.87% in 2022 and 20.33% in 2023.

 Administration expenses increased by 26.76% equivalent to VND 1,234 billion

in 2022. However, in 2023, there was a slower increase: 12.33% equivalent to

⇒ The company has better operating mechanism management policies to stabilize

VND 779 billion

⇒ FPT's business activities maintain a stable growth rate and high after-tax profit
costs in 2023.

In general, FPT's business activities have maintained a stable growth rate. Although
it was affected by the sharp increase in the cost of goods sold and administration
expenses, the after-tax profit of the group is still high: VND 7,788 billion, with an
increase of 19.98% over the same period.
Assets:
 In 2022, a sharp decrease in short-term investments (by 37% ~ VND 7,683
billion) => Total assets in 2022 decreased slightly by about VND 2,047 billion in
2022
  In 2023, a significant increase in short-term investments ( by 23.34% ~ VND
3,057 billion) => Total assets in 2023 increase of 16.71%, reaching VND 60,282

⇒ In 2023, FPT focused on promoting financial investment activities.

billion

 Long-term assets have also increased steadily over the years (around 12-14%),
reaching VND 23,577 billion in 2023. This is mainly due to the company's
investment in fixed assets with a steady annual increase rate (increased by 15.71%

⇒ FPT has purchased additional fixed assets to promote production and business
in 2022 and 13.39% in 2023)

activities.
 The asset structure of FPT is quite balanced between short-term and long-term
assets, combining highly liquid assets (short-term financial investments ~ 27%
total assets) with core assets for business operations (fixed assets ~ 23% total
assets).
Liabilities:
 In 2021, liabilities accounted for 60% of resources. This is because FPT had a
short-term debt of VND 29,761 billion, mainly from short-term borrowings and

⇒ FPT used financial leverage to expand the company's scale.

finance lease liabilities.

⇒ This is largely due to the company's efforts to repay short-term and long-
 In 2022, total liabilities were VND 26,294 billion, decrease by 18.54%.

term borrowings and finance lease liabilities (decrease by 38.74% and 35.67%,
respectively).
 In 2023, liabilities reached VND 30,349 billion. FPT continued to aggressively
repay long-term borrowings and finance lease liabilities with a decrease of
85.92%. However, short-term borrowings and finance lease liabilities
increased significantly (by 26.90% ~ VND 2,933 billion).
Owners’ equity:
 Owner's equity maintained a stable growth rate of around 18% over the years,

⇒ FPT is constantly expanding its scale.

reaching VND 29,933 billion in 2023

⇒ Stable and sustainable financial position: moderate leverage ratio, balancing liabilities
and owner’s equity, healthy asset structure.
Overall, FPT's financial position is stable and sustainable. The company’s capital
structure maintains a cautious approach with a moderate financial leverage ratio,
balancing liabilities and owner's equity. The asset structure is also safe and healthy with a
high balance of liquid assets, combined with the company's focus on investing in fixed
assets, which is the foundation for future development.
IV. Calculation and Explanation of key financial indicators

KEY FINANCIAL INDICATORS OF FPT:

Financial Indicators 2021 2022 2023

Profit Margin Pre-tax 17,8% 17,4% 17,5%
After-tax 15,0% 14,7% 14,8%
EPS Basic EPS = Diluted EPS = 3,618 3,847 VND 4,661 VND
VND
Asset Turnover 0.75 0.84 0.94
Current Ratio 1.18:1 1.26:1 1.24:1
Times Interest Earned 14.03 times 12.9 times 12.06 times
Return on Equity (ROE) 26.7% 27.7% 27.9%
Return on Assets (ROA) 11.4% 11.9% 13.6%

1. Profitability Ratios:
a. Profit Margin:
 Measure net income generated by each dollar of sales.
 Explanation of how to calculate
 Profit Margin= Net IncomeNet Sales
 FPT 2023’s Pre-tax Profit Margin
= Accounting profit before tax (Earnings before taxes)Net Revenue from
sales of goods and rendering of services x100%
= 9,203,006,098,57052,617,900,827,385x100% = 17,5%
=> For each 10.000VND of revenues, the company earns 1.750VND.
 FPT 2023’s After-tax Profit Margin
= Net Profit after taxesNet Revenue from sales of goods and rendering of
services x100%
= 7,788,049,739,61652,617,900,827,385x100% = 14,8%

b. Earnings per share (EPS):

 Earnings data is widely used in evaluating the profitability of a company, it shows
how much net income each share of common stock earn.
 Explanation on how to calculate Basic EPS:
  Standard formula to compute EPS:

 FPT’s formula to compute EPS:

Basic EPS = (Net profit attributable to shareholders - Appropriation to bonus &
welfare fund)Weighted average number of ordinary shares in circulation
= (6,465,190,432,622 - 557,312,424,593)1,267,427,118 = 4,661 (VND)
Diluted EPS = Basic EPS (The Company stated clearly in all three reports that
FPT “did not have any potential ordinary shares to be dilutive during the year and
up to the date of these consolidated financial statements.”)
 Detail:
1. Compute Basic EPS of FPT in 2023

(trích NOTES IN THE CONSOLIDATED FINANCIAL STATEMENT 2023 -

Earnings per Share)
2. Adjustments made to EPS 2022 during 2023 after “the Company paid share
dividends of the year 2022 led to the retrospective adjustment to the weighted
average number of ordinary shares”:
  EPS of FPT throughout the years:
2021 2022 2023
Reported at Adjusted Reported at Adjusted Reported at
the end of during the end of during the end of
2021 2022 2022 2023 2023
Basic 4,349 3,618 4,429 3,847 4,661
EPS
(VND)
Diluted 4,349 3,618 4,429 3,847 4,661
EPS
(VND)

c) Asset turnover
 Measures how efficiently a company uses its assets to generate sales.
 It is determined by dividing net sales by average total assets.
 Average Total Assets
= (Total Assets at beginning of 2023 + Total Assets at the end of 2023)2
=(51,650,403,735,130+60,282,827,532,899)2= 55,966,615,634,015
FPT’s 2023 Asset Turnover = Net SalesAverage Total Assets
= "Net Revenue from Sales of goods and rendering of services"Average Total
Assets = 52,617,900,827,38555,966,615,634,015= 0.94 times
=> For each 1.000VND invested in assets, FPT produces 940VND of sales.
=> This doesn’t necessarily mean the company didn’t produce enough revenue, compared
to the Industry’s rate of 0.87, FPT is still doing well irrespective of its low asset turnover.

2. Liquidity Ratios:
Current Ratio:
 Show the relationship of current assets to current liabilities. Evaluating a
company’s liquidity and short-term debt-paying ability.
 FPT’s 2023 Current Ratio = Current AssetsCurrent Liabilities
=36,705,751,751,87629,651,673,556,227 = 1.24:1
=> The ratio is higher than 1:1 and smaller than 2:1 -> FPT has the capital on hand to
meet its short-term obligations if they were all due at once, but definitely under the
standard of good credit rating.
=> Compared to the Industry’s average Current Ratio of 1.34, FPT can be not as liquid as
its competitors.

3. Solvency ratios:

Times Interest Earned (TIE)

 Times interest earned indicates the company’s ability to meet interest payments as
they come due. (also called interest coverage)
 Standard fomula= Net Income + Interest Expense + Income Tax ExpenseInterest
Expense
FPT’s 2023 TIE = Profit after tax + Interest Expense + CIT currentInterest
Expense
=7,788,049,739,616 + 832,648,611,261 +1,424,017,001,796832,648,611,261 =
12.06 times
=> FPT’s interest expense is well covered at 12.06 times.

V. Recent Stock Price Report (final 308 chữ)

FPT stock established a price peak of 98.900 VND/share right in September, 2023
without the right to advance the first dividend of 2023 in cash at the rate of 10%.
Compared to the beginning of the year, FPT stock market price has increased nearly
50%.
The strong performance of FPT's stock price and the optimism of investors about the
stock price in the 2 last quarter of 2023 can be attributed to a combination of positive
factors:
1. Strong Financial Performance:

 FPT revenue delivered impressive financial results for 3 consecutive years , with
revenue growth of 19.56% and 23.4% in 2023 and 2022 and profit before tax
growth of 19.98% and 21.25% in 2023 and 2022 surpassing market
expectations.
 Financial Indicators 2021 2022 2023
Profit Margin Pre-tax 17,8 17,4% 17,5%
%
After-tax 15,0 14,7% 14,8%
%

 Third quarter profit reached 13,700,000 million VND - the record that FPT
achieved in one quarter.
=> In August, FPT stock prices increased sharply up to 90,000 VND, rocket to
35,5% compared to year end 2022 even when businesses finalized dividends or
issued new shares, showing that investors are willing to "hold" stocks and be
 assured of profit. This almost only appears in growing and industry-leading
businesses. Shareholders believe in an immutable rule in the market that as long as
a business grows, the stock price wilL increase.

2. Profitability
 Other considerations such as: EPS, ROA, ROE all increased strongly over the
past 3 years and quarters, and are likely to continue to increase in 2024
 ROE: Significantly higher than the regional industry median of 20.9% => high
profitability

Financial Indicators 2021 2022 2023

EP Basic EPS = Diluted EPS = 3,618 VND 3,847 4,661 VND
S VND
Return on Equity (ROE) 26.7% 27.7% 27.9%
Return on Assets (ROA) 11.4% 11.9% 13.6%
3. Expansion IT service into High-Growth Markets - Japan:

 revenue from IT Services abroad officially increased of 28.4%, accounting for

60% of FPT revenue growth and 45% of profit before tax.

=> diversified the company's revenue streams and positioned it to capitalize on

emerging growth opportunities
=> investors expect long-term price growth

VI. Interpretation of data and the reasons for the company (success/failure) (297)

The company is achieving success. The reason for which is explained and proved below.

1. Liquidity - Ability to pay debt

 Above 1.0 level → safe but did not reach the standard ratio (2:1)
 The ratios indicated a clear low solvency risk
 However, average Industry Current Ratio in Vietnam: 1.34 → FPT is currently
having a lower Current Ratio than that of the industry.
 Reason:
 The amount of cash, cash equivalents, and term deposits at high levels
 Investment of the company rise in 2023 and 2021
 Trend: fluctuate but the overall trend of FPT is increase current ratio → slowly
improving the ability to pay short-term debt

2. Profitability
 Profit margin: decrease because operating expense and cost of good sold increase
over time
→ The profitability of the company is slightly decreasing

 Asset turnover: Higher asset turnover than the average of the industry (0.87)
 Company is using the asset more efficiently than competitors
 Increasing investment + effective use of asset → bright future → increase
expectation of investors → increase stock price

High EPS, ROA and ROE → Company performing well in terms of profitability.
→ FPT overall is still doing well, but needs to improve to have a better current ratio and
Profit Margin.

3. Solvency
 A high TIE ratio indicates a stronger financial position. It means the
company has more income than it needs to cover its interest expenses.
 It's often cited that a company should have a times interest earned ratio of
around 2.5
 FPT is about 5 times above 2.5 rate, so this means that the company can
pay off the interest really well
 However, an exceptionally high TIE ratio could also mean the company is
not using its excess cash effectively.