Then, i share with you about the risk analysis include 3 parts( business risk,

financial risk and insolvency risk analysis)

Firstly, business risk include 2 parts
part 1: qualitative analysis
According to a development of technology, SCD company is still using the old
technology from the 2000s. Typically, the company launched a new product market
but due to the lack of machinery and equipment, it has to hire outsourcing to make
the cost of goods sold and product prices rise, it is difficult to compete with the
same product lines type in the market.
Market share of beverage industry is currently dominated by Coca Cola with over
41% market share, PepsiCo about 22.7% while Tan Hiep Phat is 25.5%. So SCD
company has difficulty in gaining market share.
-According to customers’behavior, young people are potential customers of the
beverage market. they easily access the latest trends through social networks such
as fb, zalo... But SCD company does not have an effective marketing policy to
attract this group of customers.
part 2:quantatitive
as can be seen from table,
Coefficient of variation is 0.78 that quite low so SCd have low business risk
DOL index is increase over 3 year but SCD have low level so less sensitivity profit
to sales
secondly financial risk is analysised through DFL index
we can see from table from 2015 to 2017, DFL index is low level. Therefore, a
change in EBIT leads to a small change in EPS. The company’s profitability is not
high level. beside, benefit that don’t use too many debt finacing and also reducing
financial risks when the economic is dificulty
thirdly, insolvency risk
we can see the line chart about solvency ratio and also ratio of SCD compared to
industry average. we have more conclude
according to current ratio, quick ratio and cash ratio is higher than industry average.
Moreover, this ratios are rise over 3 year to shows that likely pay short term debts
and low payments risk
Inversely with cash ratio is bad in 2017. cash inflow is less than cash outflow so
SCD is unable pay short term debts
According to inventory turnover is general high level over 3 year although a
decreased of inventory turnover in 2017. This turnover shows business
performance well so decling holding cost.
According to receivable turnover is high level. this shows that Corporate capital is
being occupied by other businesses.
 finally, we analysis business valuation from the table between 2016 and 2017. the
value of SCD is decline sharply and also z =2.94 is grey zone and the company is in
danger of going bankrupt in the following years. so group have advise that the
investor should not buy or hold the company stock for long term investment.