EVALUATION OF PT WIJAYA KARYA REALTY FINANCIAL PERFORMANCE USING FINANCIAL MANAGEMENT BASIC TECHNIQUES

• Main Author: Fazryn Prakasa, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/69741
• Institution: Institut Teknologi Bandung

PT Wijaya Karya Realty is a subsidiary from one of the State-Owned Enterprises, namely PT Wijaya Karya (Persero) Tbk. PT WIKA Realty has started its operations since 2000 by engaging in the national property and real estate business sector. The company has three business fields, namely realty business development, property management, and construction services. The company has plans to conduct an Initial Public Offering at the end of 2022 or early 2023 so it requires careful preparation. To support the plan, firstly, it is necessary to review the company’s financial performance so far to anticipate financial constraints that could interfere with the plan. Financial performance evaluation can help companies to identify potential problems that may occur in the company so that the results can be taken into consideration in designing future company strategies. Evaluation of the financial performance of PT WIKA Realty is carried out using basic financial management techniques such as the level of business financial health (liquidity ratios, activity ratios, debt ratios, profitability ratios, and market value ratios); the inflow and outflow of company funds; the break-even point from each company’s line of business; the level of leverage used in running the business; forecasts of funding requirements for the coming period and projections of the company’s cash budget; working capital; cash conversion cycle; and the company’s cost of capital. Furthermore, the company's financial performance is compared to the financial performance of similar national companies (property and real estate). Based on the results of the financial performance evaluation, it was found that there are several potential problems that could occur to PT WIKA Realty during preparation for the Initial Public Offering. However, the company also has several positive aspects that can be offered to offset these weaknesses, starting from the profitability aspect, operational efficiency aspect, flow of fund aspect, working capital condition aspect, solvency aspect, funding structure aspect, to the company's market value aspect.