EVALUATING THE DISPROPORTIONAL OF INCOME STATEMENT AND IMPROVING FINANCIAL PERFORMANCE OF NECCIS COMPANY

• Main Author: Bima Luphdika, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/78796
• Institution: Institut Teknologi Bandung

The economy in the country is strongly supported by the growth of small and medium enterprises. Small and medium enterprises that developed in the Bandung City is a fashion business. Neccis is one of fashion business that located in Bandung City that running business in production of fashion product that implements a system made to order in accept of orders. In the Neccis income statement of 2016 and 2017, discover interesting fact about the disproportional between sales revenue and profit. The discovery is the amount of sales revenue in 2016 is higher than 2017, but profit in 2016 is smaller than 2017. This is because of overly high of expenses that makes 2016 have smaller profit than 2017 while it having higher sales revenue. By using Du Pont analysis, it is known that makes the expenses in 2016 very high is the cost of outsourcing accounts. It is because in 2016, Neccis has many opportunities of order coming in, but Neccis does not have enough capacity to produce all those orders. So, the solution is make partnership with outsourcing to finish all the orders. To improving financial business in the future, Neccis needs to maximize the internal capacity to finish the order, like happen in 2017. However, using the internal capacity only for produce all order have a high risk. The risk is a considerable cash availability to financing the company's operating costs. Thus, the company must have a good cash management plan to do. Cash budgeting is used to make sure the cash availability. This method can help the company to knowing amount of cash needed within 1 year. If the cash that needs by the company are known, the company can respond by looking for funding that can be obtained from debt funding, internal financing or internal financing. By using cash budget to ensure the fulfilment of company cash, the company plan to maximize of using internal production capacity cam be implemented well. Then, the goal to improve the company's finances will automatically achieve.