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BAS: Explanation for business result in 2011
BASA Joint Stock Company gave reasons causing the loss of VND22,295,492,061 in 2011:
The main reason was the lack of working capital, BASA had to borrow short-term loans with interest rates in 2011 from 18%/year to 21%/year. Therefore, the interest expense in 2011 was VND10,810,383,077, including an advance expense paid to banks in late fiscal year of VND1,098,463,944.
Besides, because of the lack of working capital, BASA in 2011 worked perfunctorily and had to pay a high administrative expense and a bad debt reserve of VND697,001,475.
Moreover, the increase in material price and fuel price made the Company’s fixed costs rise. The quantity of finished products was very low while production cost was up, so the cost increased while selling price could not rise due to competition. Therefore, BASA had to set up a provision for devaluation in inventories worth VND908,201,142 in 2011.
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