Analysis Qcg

To compare with other companies in real estate market, QCG has quite big scale about both of assets and equity. However, the ability to make profit of QCG is not high. This can be explant by the fact that they just join in the real estate market and most their project are in progress. Moreover, the investment coffee and rubber need large capital and long-term to make profit. In spite of that, their fund of land (5,931,000 m2) and the attractive location will be the key point to show that the potential of development of the company is quite good in the near future.

ROE ratio in 2011 is remarkably low -1.99%, as compared with ROE ratio in the same period in 2010 12.15%, it show that QCG's business is at loss.

ROE = Profitability x Efficiency x Financing Policy

= Profit/Sales X Sales/Assets X Asset/Equity

We will analyze the profitability, efficiency and financing policy to understand deeply on the contribution to changes in ROE

Profitability =Profit/Sales

Profitability indicator for 2011 is -11.3%, it means that QuocCuong Group has operated at a loss (-44,276,452,113 VND). This is due to the fact that the group's main business is in real estate, which was heavily affected by the world and Viet Nam financial crisis in 2011.

Besides, QCG has a high borrowing portion from banks and individual creditors, which became costly due to the rising interest rate on the market. Moreover, the publishing of a lot of bonds with high interest (24% at the first year) and compensation for late hand-over of its buildings contribute to the increasing cost.

Efficiency = Sales/Assets

Efficiency fell from 13.99% in 2010 to just 7.24% in 2011, it is the sign that QCG's business is going down. As the same reason like ratio above (profitability), QCG's sales decrease strongly (near 45% than 2010), while their assets almost remain as previous year 2010 (Assets only increase 7.2% in 2011). The deeper look on the Asset item showed that the cash, short-term financing investment and the other current assets decreased, in opposite, short-term account receivable increase 24 billion VND for the reserve for bad debt (because of the hard economic situation in 2011) and the inventory increase 528 billion. Even though, the efficiency of QCG was not as high as other company in real estate, they still had some advance of the wide assets (apartments and land). Notably, almost 50% of these inventories were apartments that hardly sold in the frozen period of real estate. However, we still can expect this situation will be improve in a short time when Viet Nam go through the economic crisis and the low price policy of QCG. Parallel, with a lot of wide scale projects in progress and haven't brought back revenue as