DETERMINE THE OPTIMAL CAPITAL STRUCTURE OF PT. INDOFOOD CBP SUKSES MAKMUR TBK (PT. ICBP)

• Main Author: Alfiandi, Andro
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/76951
• Institution: Institut Teknologi Bandung

The pandemic Covid-19 has severely disrupted the F&B industry, leading to widespread closures, reduced consumer demand, and supply chain disruptions. As a result, many companies in the sector have experienced declining revenues and cash flow constraints, which have had a direct impact on their ability to maintain their existing capital structure. On the other hand, the Russian war, with its geopolitical tensions and economic implications, has further compounded the challenges faced by F&B companies. Businesses operating in regions affected by the conflict have encountered additional obstacles, such as supply chain disruptions, increased costs of imported goods, and political and economic instability, all of which have impacted their capital structures. In response to these adverse circumstances, F&B companies have had to adopt various strategies to navigate the crisis and optimize their capital structures. Capital structure is refers to the mix of different sources of funds, including equity and debt, that a company uses to finance its operations and investments. It represents the long-term financing decisions of a company and reflects the way it raises capital to support its business activities. The aim of capital structure is to find the maximum value of the firm and minimize the cost of capital. This research was conducted to evaluate and determine the optimal capital structure of PT Indofood CBP Sukses Makmur Tbk from 2018 to 2022 and provide recommendations for estimation of optimal capital structure in 2023. The research method for determining optimal capital structure is to evaluate the company's financial performance with liquidity analysis ratio, activity ratio, solvency ratio and profitability ratio. Then, a company valuation is carried out using the weighted average cost of capital (WACC) approach. After that, calculation iterations are carried out by modifying the level of debt and looking for the minimum WACC and maximizing firm value. After that, a projection is made for one fiscal year and the optimal capital structure composition is sought. The results of this study show that the optimal capital structure from 2018 to 2022 is 60%, 65%, 30%, 20%, 40%, respectively.