COMPANY PROFITABILITY EVALUATION AND EFFECT ON STOCK PRICES USING SYSTEM DYNAMIC APPROACH (Case Study: PT. Vale Indonesia Tbk)
Every company has a goal to obtain profits that can be used to maintain the continuity of business and the prosperity of the owner of the company or shareholders. PT Vale Indonesia Tbk as a public company engaged in nickel mining, for the past three years, has provided financial reports that the com...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/37252 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Every company has a goal to obtain profits that can be used to maintain the continuity of business and the prosperity of the owner of the company or shareholders. PT Vale Indonesia Tbk as a public company engaged in nickel mining, for the past three years, has provided financial reports that the company profits continually have decreased. Financial statements relate to corporate and financial operations that can assess and evaluate company performance in a certain period. Complex corporate activities require broader evaluation and are not limited to financial statements. Uncertainty about fluctuations in selling prices and fuel prices are becoming very risky for business sustainability if there is a decrease in selling prices and an increase in fuel prices. In addition, each profit issuance will affect stock prices as a form of public appreciation of company performance. This risk needs to be anticipated by the company so it is necessary to make evaluation and simulation of uncertainties that will likely occur in the future. The evaluation and simulation tool in the form of a dynamic system approach were used to see the patterns of relationships between variables and explain the complexity of various factors that are causing the phenomenon under the study. Models and simulation of dynamic systems started from the study of literature, variable analysis, model concepts, and modeling using Vensim software.
Sensitivity analysis was carried out on the assumption that uncertainty of selling prices and fuel prices of 35%. The results showed that the increase in selling price was the input parameter which most influenced the average profit and its increase effect on stock prices, namely 86,7% and 34,2%. Meanwhile, the risk of losses that must be anticipated by the company is fluctuations in selling prices in which the scenario simulation results show a minimum selling price of US$7.501/Ton with HSFO oil prices of US$46,8/barrel and HSD prices of US$0.6/liter that will give profit US$4 Thousand and the effect of the share price will decrease to Rp 2,221 per share.
Published profit companies do not significantly affect the stock price due to many factors such as inflation, exchange rates, macroeconomic conditions, government policies and others.
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