WORKING CAPITAL MANAGEMENT TO SUPPORT THE ACHIEVEMENT OF PT PINDAD (PERSERO) SALES TARGETS IN 2021-2024

• Main Author: Wilda, Citra
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/55159
• Institution: Institut Teknologi Bandung

In 2019-2020, Pindad obtained several contracts and orders with a value of trillions of rupiahs which when projected, Pindad sales in 2024 reached 14 trillion rupiahs. To support the achievement of the sales target for 2021-2024, Pindad requires adequate working capital, but based on historical data shows that the increase in sales in 2016-2020 led to an unfavorable trend in financial covenant ratio, they are debt-to-equity ratio (interest-bearing debt) and current ratio. The research objectives are to identify the factors causing the unfavorable movement of the debt-toequity ratio and current ratio in 2016-2020 and provide an alternative solution that is most suitable for Pindad to meet its working capital in achieving its sales targets in 2021-2024 while still complying with its financial covenants. The problems in this research are identified by using Five Whys Analysis. There are three main problems founded, the problems are the average collection period increasing every year plus the average age of inventory has never been below 228 days while the average payment period has accelerated. These three things cause an increase in the cash conversion cycle (CCC) every year so that the company's dependence on debt increases. There are three alternatives that the authors propose for the provision of adequate working capital in achieving the sales target 2021-2024. To obtain the best alternative, the authors compile proforma financial statement and financial performance in the form of financial ratios and Tingkat Kesehatan Perusahaan (TKP) for each alternative and using decision analysis to select the best alternative solution. The best alternative solution to support the fulfillment of working capital for sales achievement in 20212024 are internal improvements to the CCC acceleration and the issuance of MTN 500 billion rupiahs in 2021. Based on the results of financial proforma, to support sales achievement in 2021-2024 with a debt-to-equity ratio below 2.5x and current ratio of more than 110%, the company must be able to accelerate CCC, so that in 2021 target CCC is 213 days and in 2022-2024 target CCC is 131 days with the maximum extend is 7 days from the target.