ANALYSIS OF NOPAT, WACC AND CAPITAL’S INFLUENCE ON EVA & MVA CASE STUDY: CEMENT MANUFACTURE INDUSTRY IN INDONESIA

• Main Author: AYUNINGTYAS SURAKUSUMAH (NIM : 29107376); Pembimbing Akademik: Ir. Evo S. Hariandja, MM, ASTI
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/15069
• Institution: Institut Teknologi Bandung

Increasing shareholders’ wealth and firm values are the main goal of every company. These could be achieved if every firm, especially the people in the management level, is able to create added value for its firm. In general, accounting profit is the most common method used to measure whether or not values are created. It leads into misperception that maximizing accounting profit equal maximizing firm’s values. The problem is accounting profit is not a reflection of the firm’s true profit. <br /> <br /> <br /> This study aims to prove that a raise in accounting profit does not always mean a raise in firm’s value. Therefore, an additional method is required to identify the firm’s true profit. The method that would be used in this study is EVA (Economic Value Added), which has already reflected the firm’s economic profit (true profit). Furthermore, the value driver to increase firm’s value in cement industry (the case study of this research) would be identified based on this method, in order to be used as indicators in increasing firm’s values. In addition, MVA (Market Value Added) analysis would be conducted to identify which firms succeeded in creating significant value for its shareholders. <br /> <br /> <br /> The subject of analysis are three major players in cement industry, which accounted for more than 90% of Indonesia’s market share, listed in BEI (Bursa Efek Indonesia). Cement industry was chosen as the case study of this research due to its relation with national construction development. <br /> <br /> <br /> As one of the main supporting industry, its development becomes a crucial aspect. Since several studies has proven that national construction development itself has strong correlation with national economic growth. <br /> <br /> <br /> From the results of analysis, it could be identified which factors that have to be developed to improve the company’s EVA and MVA, which consist of five drivers; operating profit margin, WACC, working capital, capital turnover and sales growth.