--- title: "The Cash Flow Statement: Reading Cash Flow Quality and Solvency" description: The cash flow statement tracks liquidity across operations, investing, and financing. In 2023 Vinamilk generated 7,887 billion VND in operating cash flow. url: https://ginity.vn/en/blog/reading-cash-flow-statement-vietnam canonical: https://ginity.vn/en/blog/reading-cash-flow-statement-vietnam markdown: https://ginity.vn/en/blog/reading-cash-flow-statement-vietnam.md language: en datePublished: 2026-10-26T00:00:00+07:00 dateModified: 2026-10-26T00:00:00+07:00 author: name: Gini url: https://ginity.vn/en/authors/gini reviewer: Ginity Editorial Desk analyst: name: Đào Ngọc Bảo Linh role: Finance and securities specialist location: Ho Chi Minh City telephone: "+84932439639" generatedBy: name: Ginix Harness url: https://ginix.vn desk: id: learn name: Learn investing url: https://ginity.vn/en/learn tickers: - VNM sources: - name: National Legal Database url: https://vbpl.vn/botaichinh/Pages/vbpq-toanvan.aspx?ItemID=66801 title: Enterprise Accounting System under Circular No. 200/2014/TT-BTC - name: Ho Chi Minh Stock Exchange url: https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin title: HOSE Listed Company Corporate Disclosure Portal - name: State Securities Commission url: https://congbothongtin.ssc.gov.vn title: Public Company Information Disclosure System IDS - name: Vinamilk url: https://www.vinamilk.com.vn/investor/reports/financial title: Consolidated Audited Financial Statements 2023 - name: Vinamilk url: https://www.vinamilk.com.vn/bao-cao-thuong-nien/bao-cao/2023/chap6.html title: "Annual Report 2023: Cash Flow Statement" publisher: Ginity attribution: 'Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content.' disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources." usageTerms: https://ginity.vn/ai.txt --- # The Cash Flow Statement: Reading Cash Flow Quality and Solvency > The cash flow statement tracks liquidity across operations, investing, and financing. In 2023 Vinamilk generated 7,887 billion VND in operating cash flow. Gini · Learn investing · 2026-10-26 · https://ginity.vn/en/blog/reading-cash-flow-statement-vietnam _Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_ ## Key takeaways - The cash flow statement classifies corporate cash movements across 3 distinct pillars: operating cash flow (CFO), investing cash flow (CFI), and financing cash flow (CFF). - In 2023, Vinamilk generated 7,887 billion VND in net operating cash flow, converting 87.45% of its 9,019 billion VND net profit into real cash. - Net cash used in investing activities reached negative 2,989 billion VND in 2023, including 1,580 billion VND dedicated to capital expenditures. - Financing cash flow in 2023 stood at negative 4,293 billion VND, primarily driven by 8,046 billion VND paid in cash dividends to shareholders. - Closing cash and cash equivalents reached 2,912 billion VND at the end of 2023, reflecting a net increase of 613 billion VND over the prior year. ## 1. The Structure of the Cash Flow Statement and Its Three Pillars After examining asset structures on the [balance sheet](/en/blog/reading-balance-sheet-vietnam) and profit generation on the [income statement](/en/blog/reading-income-statement-vietnam), the definitive statement required to verify solvency is the [cash flow statement](/en/glossary/cash-flow-statement). An established principle in financial analysis states that profit is an accounting opinion, but cash is a physical reality. An enterprise can book substantial accounting profits under accrual conventions, but only actual cash can settle obligations with suppliers, pay employee salaries, meet corporate tax duties, and fund dividends. Under Circular No. 200/2014/TT-BTC issued by the Ministry of Finance, the cash flow statement records cash inflows and outflows across 3 distinct operating pillars: 1. **Cash Flow from Operating Activities (CFO):** Measures cash receipts from customer sales and service fees alongside cash disbursements for inventory procurement, employee wages, operating expenses, and income taxes. [Operating cash flow](/en/glossary/operating-cash-flow) serves as the primary indicator of whether core operations can sustain themselves without relying on external financing. 2. **Cash Flow from Investing Activities (CFI):** Captures cash used for acquiring, developing, or disposing of long-term productive assets (factories, machinery, and equipment) as well as long-term financial investments such as term deposits and shareholdings in affiliates. 3. **Cash Flow from Financing Activities (CFF):** Tracks equity and debt capital transactions, including proceeds from share issuances, bank borrowings, debt principal repayments, and cash dividend distributions to equity owners. According to Circular No. 200/2014/TT-BTC, enterprises may prepare the cash flow statement using either the direct method or the indirect method. See the full text at the [National Legal Database](https://vbpl.vn/botaichinh/Pages/vbpq-toanvan.aspx?ItemID=66801). Most large listed enterprises in Vietnam adopt the indirect method for their consolidated financial statements. Under the indirect method, the statement starts with accounting profit before tax from the income statement, adjusts for non-cash expenses such as depreciation and provisions, eliminates non-operating gains and losses, and reconciles changes in operating working capital (receivables, inventory, and payables) to arrive at net operating cash flow. This reconciliation highlights whether the operating cycle generates liquid cash or locks capital up in delinquent receivables and slow-moving inventory. Within the [reading financial statements](/en/learn/financial-statements) syllabus, analysts examine the cash flow statement to compute [free cash flow](/en/glossary/free-cash-flow) (FCF), calculated as operating cash flow minus capital expenditures (Capex). Free cash flow represents surplus liquidity that management can allocate toward cash dividends, share repurchases, or debt reduction without impairing existing operating assets. ## 2. Cash Flow Quality and Free Cash Flow in Vinamilk's 2023 Audit To illustrate how cash flow dynamics operate in practice, we examine the 2023 audited consolidated financial statements of Vietnam Dairy Products Joint Stock Company (ticker: VNM), listed on the Ho Chi Minh Stock Exchange (HOSE). See the full text at [Vinamilk](https://www.vinamilk.com.vn/investor/reports/financial). According to the audit report issued by KPMG Limited, Vinamilk generated 7,887 billion VND in net operating cash flow during fiscal year 2023. The table below compiles the cash flow statement components of Vinamilk for fiscal years 2022 and 2023: | Cash Flow Indicator (Unit: Billion VND) | FY 2022 | FY 2023 | Change | | --- | --- | --- | --- | | 1. Profit before income tax | 10,496 | 10,968 | +472 | | - Adjustments for depreciation and amortisation | +2,285 | +2,195 | -90 | | - Adjustments for allowances and provisions | +38 | +50 | +12 | | - Adjustments for interest income and expenses | -1,144 | -1,213 | -69 | | - Working capital movements (receivables, inventory, payables) | -882 | -2,164 | -1,282 | | - Corporate income tax paid during the period | -1,975 | -1,564 | +411 | | **I. Net cash flows from operating activities (CFO)** | **+8,827** | **+7,887** | **-940** | | 1. Purchase of fixed assets and long-term assets (Capex) | -1,457 | -1,580 | -123 | | 2. Proceeds from disposals of fixed assets | +98 | +102 | +4 | | 3. Placements and withdrawals of term deposits (net) | +4,832 | -1,511 | -6,343 | | **II. Net cash flows from investing activities (CFI)** | **+3,473** | **-2,989** | **-6,462** | | 1. Proceeds from borrowings | +6,258 | +11,788 | +5,530 | | 2. Repayments of borrowings | -10,789 | -8,277 | +2,512 | | 3. Dividends paid in cash to shareholders | -8,046 | -8,046 | 0 | | **III. Net cash flows from financing activities (CFF)** | **-12,360** | **-4,293** | **+8,067** | | **Net increase in cash and cash equivalents (I + II + III)** | **-60** | **+606** | **+666** | | Cash and cash equivalents at beginning of year | 2,359 | 2,299 | -60 | | Effect of foreign exchange rate fluctuations | 0 | +7 | +7 | | **Cash and cash equivalents at end of year** | **2,299** | **2,912** | **+613** | Source: Audited Consolidated Financial Statements 2023 of Vietnam Dairy Products Joint Stock Company (VNM), audited by KPMG Limited. According to data disclosed in the 2023 audited financial report of Vinamilk, net operating cash flow reached positive 7,887 billion VND. When compared to consolidated net profit after tax of 9,019 billion VND, the cash conversion ratio (CFO divided by Net Profit) was 87.45%. This high cash conversion confirms that Vinamilk's reported net earnings were backed by actual cash collections from customers rather than trapped in uncollected receivables. Under investing activities, Vinamilk reported net investing cash outflow of negative 2,989 billion VND in 2023, compared to positive 3,473 billion VND in 2022 when term deposits matured. The company allocated 1,580 billion VND in cash to capital expenditures (Capex) for purchasing processing machinery and upgrading dairy farms (compared to 1,457 billion VND in 2022). According to calculations by Ginity, [free cash flow](/en/glossary/free-cash-flow) (FCF = CFO minus Capex) reached 6,307 billion VND in 2023 (7,887 minus 1,580). This free cash flow cushion of over 6,300 billion VND allowed Vinamilk to fund development spending internally without depending on long-term bank debt. Under financing activities, according to Vinamilk's 2023 audited disclosures, net financing cash outflow was negative 4,293 billion VND (compared to negative 12,360 billion VND in 2022). The largest item was 8,046 billion VND distributed as regular cash dividends to shareholders. While the enterprise drew 11,788 billion VND in short-term bank borrowings, it repaid 8,277 billion VND in borrowing principal over the same period. See the full text at [Vinamilk Annual Report 2023](https://www.vinamilk.com.vn/bao-cao-thuong-nien/bao-cao/2023/chap6.html). Across all 3 pillars, according to audited disclosures for 2023, net cash increased by 606 billion VND (compared to a 60 billion VND decrease in 2022). After incorporating a 7 billion VND foreign exchange adjustment, closing cash and cash equivalents stood at 2,912 billion VND at year-end 2023, rising 613 billion VND from 2,299 billion VND at the start of the year. ## 3. Three Common Mistakes When Reading the Cash Flow Statement Analyzing cash flow dynamics requires integrating data across all 3 statements. Below are three common misinterpretations encountered among market participants: ### Assuming negative net cash change signals corporate distress Investors frequently see a negative total net cash change (CFO + CFI + CFF) and assume the company faces financial distress. However, the health of cash generation depends on the structure of the individual cash flow categories. In corporate lifecycle theory, a mature business commonly produces large positive CFO, moderate negative CFI for asset renewal, and deep negative CFF due to debt repayments and shareholder dividend distributions. A moderate reduction in total cash under these conditions reflects capital efficiency rather than operational weakness. ### Ignoring persistent divergence between net income and operating cash flow A severe red flag in accounting analysis is prolonged divergence between net income and operating cash flow. If a company repeatedly reports positive net income over 3 to 5 consecutive years while operating cash flow remains negative, working capital is being absorbed by uncollected customer receivables or accumulation of unsold inventories. In adverse scenarios, this pattern signals aggressive revenue recognition or fictitious sales booking to meet short-term expectations. ### Overlooking the use of bank borrowings to conceal operational cash deficits When operating cash flow fails to cover day-to-day operations, management teams may rely on short-term bank borrowings or corporate bond issuances (driving positive CFF) to bridge the liquidity gap. Using debt to subsidize negative operating cash flow is an unsustainable holding pattern. Unless the core business returns to positive cash generation, maturing debt obligations will trigger refinancing stress. ## 4. How to Verify Cash Flow Data on HOSE and Regulatory Portals To inspect audited cash flow statements from regulatory databases, analysts can use official electronic disclosure platforms: 1. **Corporate Disclosure Portal of the Ho Chi Minh Stock Exchange:** The corporate disclosure section at the [Ho Chi Minh Stock Exchange](https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin) hosts official periodic financial filings from all HOSE-listed issuers. See the full text at the [Ho Chi Minh Stock Exchange](https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin). 2. **State Securities Commission Information Disclosure System (IDS):** The national filing repository at the [State Securities Commission](https://congbothongtin.ssc.gov.vn) stores original statutory filings for public companies across all Vietnamese exchanges. See the full text at the [State Securities Commission](https://congbothongtin.ssc.gov.vn). 3. **Issuer Investor Relations (IR) Portals:** The investor relations portals of listed entities like Vinamilk provide complete audited financial packages alongside explanatory notes on cash and bank deposits. See the full text at [Vinamilk](https://www.vinamilk.com.vn/investor/reports/financial). Under Circular No. 96/2020/TT-BTC issued by the Ministry of Finance, listed companies must disclose quarterly reports within 20 days of quarter-end (or 30 days for consolidated reports) and audited annual statements within 90 days of fiscal year-end. Verification steps on official regulatory portals: - **HOSE Disclosure Portal:** Visit the portal at the [Ho Chi Minh Stock Exchange](https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin), search for ticker `VNM`, and select the 2023 Annual Audited Financial Statements. Open the filing and navigate to the Consolidated Statement of Cash Flows (prepared according to the indirect method) to verify operating cash flow of 7,887 billion VND, investing cash outflow of negative 2,989 billion VND, and cash dividends paid of 8,046 billion VND. - **State Securities Commission Portal:** Open the system at the [State Securities Commission](https://congbothongtin.ssc.gov.vn), filter by exchange HOSE and ticker `VNM`, and select Consolidated Annual Reports to view official regulatory submissions. - **Vinamilk Investor Relations:** Access the financial reports repository at [Vinamilk](https://www.vinamilk.com.vn/investor/reports/financial) to review disclosures regarding fixed asset investments and bank credit facilities. Understanding cash flow reconciliation alongside the balance sheet and income statement completes the foundational lessons in the [reading financial statements](/en/learn/financial-statements) track. Further analysis involves examining the Notes to the Financial Statements and the Independent Auditor's Report to assess accounting estimates. Investors can also utilize [financial analysis tools](/en/tools) provided by Ginity to monitor cash conversion efficiency across multiple accounting periods. ## Sources - National Legal Database: [Enterprise Accounting System under Circular No. 200/2014/TT-BTC](https://vbpl.vn/botaichinh/Pages/vbpq-toanvan.aspx?ItemID=66801) (22/12/2014) - Ho Chi Minh Stock Exchange: [HOSE Listed Company Corporate Disclosure Portal](https://www.hsx.vn/vi/tin-tuc/cong-bo-thong-tin) (24/10/2026) - State Securities Commission: [Public Company Information Disclosure System IDS](https://congbothongtin.ssc.gov.vn) (23/10/2026) - Vinamilk: [Consolidated Audited Financial Statements 2023](https://www.vinamilk.com.vn/investor/reports/financial) (28/03/2024) - Vinamilk: [Annual Report 2023: Cash Flow Statement](https://www.vinamilk.com.vn/bao-cao-thuong-nien/bao-cao/2023/chap6.html) (28/03/2024) --- _Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._ _Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._