ANALYSIS OF FINANCIAL PERFORMANCE MEASUREMENT AND Z-SCORE ASSESSMENT OF CEMENT COMPANIES IN INDONESIA (STUDY CASE : PT. SEMEN BATURAJA TBK, PT. SEMEN INDONESIA TBK, PT. INDOCEMENT TUNGGAL PRAKARSA TBK, AND PT. SOLUSI BANGUN INDONESIA TBK PERIOD 2015-2019)
Since 2014, after Mr. Joko Widodo was appointed as Indonesian president, infrastructure development became the government's main focus to improve Indonesia's economic growth. However, from 2015 up until 2019 cement industry experiencing an oversupply condition in made national cement compa...
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/53363 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | Since 2014, after Mr. Joko Widodo was appointed as Indonesian president, infrastructure development became the government's main focus to improve Indonesia's economic growth. However, from 2015 up until 2019 cement industry experiencing an oversupply condition in made national cement companies like PT. Semen Baturaja Tbk, PT. Semen Indonesia Tbk, PT. Indocement Tunggal Prakarsa, Tbk, and PT. Solusi Bangun Indonesia Tbk seems to experience a decline in profits. Therefore, it is necessary to maintain cement companies' sustainability to support Indonesia's future development of infrastructure.
This study evaluates and measures four cement companies' financial performance and health conditions in Indonesia during the oversupply condition from 2015-2019. Measurement is done by doing financial ratio analysis and the Altman Z-Score method. The ratio used to measure the financial ratio analysis is taken from the decree of the Ministry of SOE's KEP-100/MBU/2002 about the company's health level condition. From the decree, the eight financial ratios used are Return on Equity (ROE), Return on Investment (ROI), Current Ratio, Cash Ratio, Collection Period, Inventory Turnover, Total Asset Turnover, and Total Equity to Total Asset. The author also measures each company's Return on Invested Capital (ROIC) relative to the Weighted Average Cost of Capital (WACC) to measure whether the four cement companies in the cement industry are sufficiently profitable. Altman Z-Score's method is used to calculate the company's health status, which assesses the probability of potential future bankruptcy.
The result of the cement company's financial health condition from 2015-2019 shows as follows: PT. Semen Baturaja Tbk (AA, A, BBB, BBB, BBB); PT. Semen Indonesia Tbk (AA, AA, A, A, A); PT. Indocement Tunggal Prakarsa (AA, AA, A, BBB, A) and PT. Solusi Bangun Indonesia (BBB, BB, BB, BBB, A). The return on invested capital of four cement companies was below their weighted average cost of capital from 2015-2019. The Altman Z-Score assessment performed in 2015-2019 shows that PT. Semen Baturaja Tbk was categorized in safe zone area from 2015-2018 and grey zone in 2019. PT. Semen Indonesia, Tbk categorized in safe zone area from 2015-2018 and grey zone in 2019. PT. Indocement Tunggal Prakarsa, Tbk categorized in safe zone area from 2015-2019. And PT. Solusi Bangun Indonesia, Tbk categorized in distress zone area from 2015-2019. In conclusion, cement companies' financial performance is shown deteriorating performance, especially in their profitability. This study only discusses the financial performance of the cement company based on financial aspect during 2015-2019 before the covid-19 situation; therefore, it needs further study from other aspect and their financial performance during and beyond the covid-19 situation to get a wider perspective and insight of the cement companies and cement industry in Indonesia. |
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