EVALUATING THE DISPROPORTIONAL OF INCOME STATEMENT AND IMPROVING FINANCIAL PERFORMANCE OF NECCIS COMPANY

• Main Author: BIMA LUPHDIKA (19215016), MUHAMMAD
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/29165
• Institution: Institut Teknologi Bandung

The economy in the country is strongly supported by the growth of small and medium enterprises. Small <br /> <br /> and medium enterprises that developed in the Bandung City is a fashion business. Neccis is one of fashion <br /> <br /> business that located in Bandung City that running business in production of fashion product that <br /> <br /> implements a system made to order in accept of orders. <br /> <br /> In the Neccis income statement of 2016 and 2017, discover the interesting fact that there is disproportional <br /> <br /> between sales revenue and profit. The discovery is the amount of sales revenue in 2016 is higher than 2017, <br /> <br /> but profit in 2016 is smaller than 2017. This is because of overly high of expenses that makes 2016 have <br /> <br /> smaller profit than 2017 while it having higher sales revenue. <br /> <br /> By using Du Pont analysis, it is known that makes the expenses in 2016 very high is the cost of outsourcing <br /> <br /> accounts. It is because in 2016, Neccis has many opportunities of order coming in, but Neccis does not have <br /> <br /> enough capacity to produce all those orders. So, the solution is make partnership with outsourcing to finish <br /> <br /> all the orders. <br /> <br /> To improving financial business in the future, Neccis needs to maximize the internal capacity to finish the <br /> <br /> order, like happen in 2017. However, using the internal capacity only for produce all order have a high risk. <br /> <br /> The risk is a considerable cash availability to financing the company's operating costs. Thus, the company <br /> <br /> must have a good cash management plan to do. Cash budgeting is used to make sure the cash availability. <br /> <br /> This method can help the company to knowing amount of cash needed within 1 year. If the cash that needs <br /> <br /> by the company are known, the company can respond by looking for funding that can be obtained from <br /> <br /> debt funding, internal financing or internal financing. <br /> <br /> By way of cash budget to ensure the fulfilment of company cash, the plan to maximize of using internal <br /> <br /> production capacity will be done well. Then, the goal to improve the company's finances will automatically <br /> <br /> achieve.