Financial Ratio Analyzer
If you are investing in companies listed on Vietnam's exchanges (HOSE, HNX, UPCoM) while thinking in Vietnamese dong, the raw numbers in a financial statement are hard to judge in isolation. Is a net profit of 150 million VND good? The number only becomes meaningful once you divide it by something else — equity to get return on equity, revenue to get a margin, market value to get a price-to-earnings multiple. That is the entire purpose of ratio analysis: turning absolute figures into comparable ratios across companies, industries and time.
This tool groups the ratios into the three buckets fundamental investors actually use. Valuation (P/E, P/B) answers "what is the market paying for each unit of profit or book value?". Profitability (ROE, net margin) measures how much profit the business generates on its capital and its sales. Financial health (debt-to-equity, current ratio) shows how leveraged the company is and whether it can cover short-term obligations. With the default illustrative figures, the tool returns a P/E of 20.0x, P/B of 2.5x, ROE of 12.5%, net margin of 15.0%, debt-to-equity of 0.67x and a current ratio of 1.67x.
The single most important caveat before you read on: there is no universal "good" threshold for any ratio. A P/E of 20 can be cheap for a fast-growing technology company and expensive for a slow-growing utility. Every ratio only means something next to industry peers and a multi-period trend. Two structural points are worth knowing for Vietnamese statements specifically: figures are reported in VND (so the multiples are currency-neutral, but the absolute balances are not), and accounting standards (VAS vs IFRS-aligned disclosures) can differ between issuers — compare like with like. Enter the numbers from the company's own audited report for a realistic read.
The six ratios and how the tool computes them
The calculator reads figures straight off the financial statements and applies the standard formulas below. Every number in the worked example is produced by these same formulas.
Valuation bucket
- P/E (price-to-earnings) = Market cap ÷ Net income — how many VND of price investors pay per VND of annual profit. Example: 3.000.000.000 ÷ 150.000.000 = 20.0x.
- P/B (price-to-book) = Market cap ÷ Shareholders' equity = 3.000.000.000 ÷ 1.200.000.000 = 2.5x. A P/B below 1 means the market values the firm below its book value.
Profitability bucket
- ROE (return on equity) = Net income ÷ Equity × 100% = 150.000.000 ÷ 1.200.000.000 = 12.5%. The return generated on shareholders' capital.
- Net margin = Net income ÷ Revenue × 100% = 150.000.000 ÷ 1.000.000.000 = 15.0%. How many VND of profit are kept per 100 VND of sales.
Financial-health bucket
- Debt-to-equity (D/E) = Total liabilities ÷ Equity = 800.000.000 ÷ 1.200.000.000 = 0.67x. Below 1 is generally considered conservative; higher means more leverage.
- Current ratio = Current assets ÷ Current liabilities = 500.000.000 ÷ 300.000.000 = 1.67x. Above 1 means short-term assets cover short-term debts.
A supporting ratio: asset turnover
The tool also reports asset turnover = Revenue ÷ Total assets = 1.000.000.000 ÷ 2.000.000.000 = 0.50x per year — how efficiently assets are used to generate sales. It is one of the three levers behind ROE in the DuPont decomposition (margin × turnover × leverage).
What the model leaves out
Every ratio here is a single-period snapshot. It cannot see seasonality, one-off items (asset sales, provision reversals) or differences in accounting policy between firms. P/E and P/B use point-in-time profit and equity, so an unusually strong quarter can make a multiple look artificially cheap. Always read ratios alongside a multi-year trend and against same-industry peers.
Worked example: analysing an illustrative company
The figures below are an illustrative example (identical to the tool's defaults), not a real listed issuer. Assumptions: market cap 3.000.000.000 VND, annual revenue 1.000.000.000 VND, net income 150.000.000 VND, total assets 2.000.000.000 VND, total liabilities 800.000.000 VND, equity 1.200.000.000 VND, current assets 500.000.000 VND, current liabilities 300.000.000 VND.
| Ratio | Formula | Result | Quick read |
|---|---|---|---|
| P/E | Cap ÷ Net income | 20.0x | Reasonable valuation zone |
| P/B | Cap ÷ Equity | 2.5x | Paying 2.5x book value |
| ROE | Net income ÷ Equity | 12.5% | Healthy profitability |
| Net margin | Net income ÷ Revenue | 15.0% | Keeps 15 VND profit per 100 of sales |
| Debt-to-equity | Liabilities ÷ Equity | 0.67x | Low leverage, conservative |
| Current ratio | Current assets ÷ Current liab. | 1.67x | Comfortably covers short-term debt |
Read as a whole: this company shows 12.5% ROE — a solid return on shareholder capital — with low leverage (D/E of just 0.67x) and ample liquidity (current ratio 1.67x). The P/E of 20.0x sits in a reasonable valuation band relative to a broad market, but whether it is "cheap" or "expensive" depends on the expected growth rate.
Comparing against a peer
Suppose a same-industry "growth" peer trades at a market cap of 6.000.000.000 VND on net income of 200.000.000 VND, with the same 1.200.000.000 VND of equity.
| Metric | Illustrative co. | Growth peer |
|---|---|---|
| P/E | 20.0x | 30.0x |
| ROE | 12.5% | 16.7% |
The growth peer earns a higher ROE (16.7% vs 12.5%), so the market is willing to pay a richer P/E (30.0x vs 20.0x). This is exactly why a P/E is only meaningful within an industry: a high multiple is not necessarily expensive if profitability justifies it. Enter the figures for the two stocks you are weighing and put them side by side.
Frequently asked questions
What is the P/E ratio and how is it calculated?
P/E (price-to-earnings) = Market cap ÷ Net income (equivalently, share price ÷ earnings per share). It tells you how many VND of price investors pay per VND of annual profit. Verifiable example: 3.000.000.000 ÷ 150.000.000 = 20.0x. A high P/E can reflect growth expectations rather than overvaluation — always compare against same-industry peers.
What is a good ROE?
There is no absolute threshold, but many investors treat a sustained ROE above 15%/year as a sign of strong, durable profitability, especially when it is not driven by heavy debt. In the tool's example, ROE = 150.000.000 ÷ 1.200.000.000 × 100% = 12.5% — healthy but not exceptional. Watch out for ROE inflated by leverage: a high ROE from genuine margins is more reassuring than one from borrowing.
What debt-to-equity ratio is considered safe?
D/E = Total liabilities ÷ Equity. Below 1 is usually conservative, 1–2 is moderate depending on the industry, and above 2 is highly leveraged and rate-sensitive. Banks, real estate and infrastructure naturally run higher D/E than services or software. The tool's example: 800.000.000 ÷ 1.200.000.000 = 0.67x — low leverage, conservative.
What does the current ratio tell me?
The current ratio = Current assets ÷ Current liabilities measures the ability to cover obligations due within a year using short-term assets. Above 1 means coverage; an unusually high ratio (say above 3) can signal idle cash that is not being deployed efficiently. Example: 500.000.000 ÷ 300.000.000 = 1.67x — comfortable liquidity.
P/E vs P/B — which should I use?
P/E compares price to profit (market cap ÷ net income = 20.0x in the example) and suits firms with stable earnings. P/B compares price to book value / equity (3.000.000.000 ÷ 1.200.000.000 = 2.5x) and is more useful for banks, insurers, or temporarily loss-making firms where P/E breaks down. Best practice is to read both alongside ROE: a high P/B is only justified by a correspondingly high ROE.
Why should I not compare P/E across different industries?
Because each industry has a different growth rate, risk profile and capital intensity, so the "normal" P/E band differs. In the example, the growth peer with a 16.7% ROE commands a P/E of 30.0x, while the 12.5%-ROE company trades at just 20.0x. A higher P/E is not necessarily more expensive — it reflects expected profitability. Always benchmark P/E against same-industry peers and the stock's own history.
Is a single reporting period enough to judge a stock?
No. Every ratio here is a single-period snapshot and can be distorted by one-off items (asset sales, provision reversals) or seasonality. A blowout quarter makes P/E look artificially cheap; a heavy provisioning quarter temporarily depresses ROE. Read the ratios across several consecutive years to see the trend, and combine them with FiMo's profit margin and ROI calculators for a fuller picture.