FINANCIAL AND TAX PLANNING STRATEGY TOOPTIMIZE FINANCIAL PERFORMANCE OFPT KALTIM DAYA MANDIRI

• Main Author: Ridyanto, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77572
• Institution: Institut Teknologi Bandung

PT Kaltim Daya Mandiri is a utility provider company located in Bontang, East Kalimantan, Indonesia, currently planning to invest in a new project investment by constructing a nitrogen plant in Bontang and a utility center plant in West Papua to support the business expansion of PT Pupuk Kalimantan Timur in eastern region of Indonesia. To execute the project, company must ensure the adequacy of cash flow to support the existing operational needs and the project activities needs therefore it requires cash flow management and right financing strategy to ensure the company’s financial performance remains stable. In this study, the analytical method used to generate a strategic formulation to optimize financial performance during projects is using quantitative and qualitative analysis. The strategic formulation comprises of financial strategy specifically option of project financing and tax planning strategy that specifically related in tax refund and tax exemption. From the exploration of several strategies, there are 2 (two) options of combination of strategies, namely Scheme 1: Tax Planning Strategies and Financial Strategies Through Utilizing Banking Products (investment loan & short-term loan) and Scheme 2: Tax Planning Strategies and Financial Strategies Through Utilizing Debt Securities (Corporate Bonds and Medium-Term Note). From the simulation, it is showed that in terms of the efficiency aspect towards interest cost imposed during the period, impact on the company’s cash flow during project development period, and the proforma of financial performance, the Scheme 1 is more favorable compared to Scheme 2. By using Scheme 1, the interest of bank loan will be imposed to the Cash Flow Statement and Profit and Loss Statement after the project is declared commercial and during the project construction the company only exposed by an Interest During Construction which will be an additional loan balance after the project commercial. In addition, the existence of installment payments (principal and interest portion) has an impact on reducing the loan balance that the future interest expense will decrease. Whereas, by using Scheme 2, the company will be directly burdened by interest coupons that need to be paid on a quarterly and constant basis that can affect Cash Flow and Profit & Loss Statements directly.