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ANALYSIS of FINANCIAL STATEMENTS

Financial Performance Analysis PT. Aneka Tambang Tbk

Period 2014-2015

(using the four ratios of liquidity, solvability, activity and profitability)

ARRANGED BY:

DEBORA H. WONGKAR

(15042016)

FACULTY of ECONOMICS / MANAGEMENT

UNIVERSITAS KATOLIK DE LA SALLE MANADO

2017

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EXECUTIVE SUMMARY

The financial statements are a very important tool for obtaining information in relation to
the financial position and the results achieved by the company concerned. In order for the
financial statements to be meaningful to the parties concerned, it is necessary to conduct a
relationship analysis of the items in a financial statement.

In this case, the ratio analysis can be used to give an idea of the actual financial condition
of the company and whether or not the company does business. Ratios to be used are
liabilities ratio, solvency ratio, activity ratio and profitability ratio. The problem is how PT
Aneka Tambang Tbk. effectiveness and condition of PT Aneka Tambang Tbk. in using its
assets over a two-year period, ie in 2014 and 2015.

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Table of Contents

Contents
2017 .............................................................................................................................................................. 1
EXECUTIVE SUMMARY ......................................................................................................................... 2
Table of Contents .......................................................................................................................................... 3
CHAPTER I .................................................................................................................................................. 6
1.1 General ................................................................................................................................................ 6
1.2 Purpose................................................................................................................................................ 7
1.3 Objectives ........................................................................................................................................... 7
CHAPTER II................................................................................................................................................. 8
2.1 Company Profile ................................................................................................................................. 8
2.1.1. Operating Profit........................................................................................................................... 9
2.1.2. Other Income .............................................................................................................................. 9
2.1.3. Comprehensive Income............................................................................................................... 9
2.2 Liquidity Ratio Analysis ................................................................................................................... 10
2.2.2 Quick Ratio .............................................................................................................................. 11
2.2.3 Cash Ratio .................................................................................................................................. 11
2.2.4 Cash Turn Over .......................................................................................................................... 12
2.3 Solvability Ratio Analysis ................................................................................................................ 12
2.3.1 Debt to Asset Ratio .................................................................................................................... 12
2.3.2 Debt to Equity Ratio .................................................................................................................. 13
2.3.3 Long Term Debt to Equity Ratio ............................................................................................... 13
2.4 Activity Ratio Analysis ..................................................................................................................... 14
2.4.1 Receivable Turn Over ................................................................................................................ 14
2.4.2 Inventory Turn Over .................................................................................................................. 15
2.4.3 Working Capital Turn Over ....................................................................................................... 15
2.4.4 Fixed Assets Turn Over ............................................................................................................. 16
2.4.5 Total Assets Turn Over .............................................................................................................. 16
2.5 Profitability Ratio Analysis ............................................................................................................... 17
2.5.1 Net Profit Margin ................................................................................................................ 17
2.5.2 Return On Equity ....................................................................................................................... 17

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CHAPTER III ............................................................................................................................................. 19
3.1 Conclusions ....................................................................................................................................... 19
3.2 Recommendations ............................................................................................................................. 20

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CHAPTER I
1.1 General

Ratio analysis is a number showing the relationship between the elements in the financial
statements. The relationship is expressed in a simple mathematical form (Arief Sugiyono,
2009: 64).
Financial ratio analysis uses existing financial statement data as the basis for its
valuation. Although based on past data and conditions, financial ratio analysis is intended to
assess future risks and opportunities. Measurement and relationship of one post with another
item in the financial statements seen in financial ratios can provide meaningful conclusions
in determining the financial soundness of an enterprise.
For a company with a financial ratio analysis it will get an information about the
condition or financial condition so that it can make the decisions necessary for the purpose of
the use of financial ratios as a matter of consideration whether the company will be profitable
if the shares are purchased.
The classification of financial ratio analysis into four parts : Liquidity ratio analysis,
Solvability ratio analysis, Activity ratio analysis, and Profitability ratio analysis.

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1.2 Purpose
The purpose of making this paper is to be able to better know and understand the
financial statements of a company more specifically PT. ANTAM, using the four financial
ratios namely, liability ratio, solvability ratio, activity ratio, and the last is profitability ratio.
A company performs a financial ratios analysis to determine performance in the context of
company goals and strategies and otherwise the objective of ratio analysis is to evaluate the
effectiveness of company policies in each of these areas.

1.3 Objectives

 To explain the company profile (PT. ANTAM)


 To Explain the Industry Average
 To explain the Liquidity ratio analysis
 To explain the Solvability ratio analysis
 To explain the Activity ratio analysis
 To explain the Profitability ratio analysis

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CHAPTER II

2.1 Company Profile


ANTAM is a diversified and vertically integrated export oriented mining company.
Through operations areas spread over mineral-rich Indonesia, ANTAM's activities include
exploration, mining, processing and marketing of nickel ore, ferronickel, gold, silver, bauxite
and coal. ANTAM has long-term loyal customers in Europe and Asia. Given the vastness of
the mining concession area and the large amount of reserves and resources, ANTAM
established several joint ventures with international partners to utilize the existing reserves
into profitable mines.

ANTAM has solid cash flow and prudent financial management. ANTAM was
established as a State-owned Enterprise in 1968 through mergers of several national mining
companies producing single commodities. To support the financing of the ferronickel
expansion project, in 1997 ANTAM offered 35% of its shares to the public and listed them in
the Indonesia Stock Exchange. In 1999, ANTAM listed its shares in Australia with foreign
exempt entity status and in 2002 this status was upgraded to ASX Listing with more stringent
conditions.

The company's current objectives focus on increasing shareholder value. This is done
through reduced costs as businesses grow to create sustainable benefits. The company's
strategy is to focus on nickel, gold and bauxite core commodities through increased
production output to increase revenue and lower unit costs. ANTAM plans to sustain growth
through trusted expansion projects, strategic alliances, improved reserve quality, and value
enhancement through downstream business development. ANTAM will also retain the
company's financial strength. Through the acquisition of cash as much as possible, the
company ensures will have sufficient funds to meet obligations, fund growth, and pay
dividends. To lower costs, companies need to operate more efficiently and productively and
increase capacity to capitalize on economies of scale.

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2.1.1. Operating Profit
ANTAM's operating profit in 2015 was recorded at 411.76% to Rp. 701,438,522
relation loss of business Rp. 137,062,724 in 2014.

2.1.2. Other Income


In 2015 and 2014, ANTAM recorded net other expenses of Rp. 967.335.402 and
Rp. 653,729,835, up 47.97% due to an increase in the losses of joint and joint venture
entities. Interest income increased by 6.63% from time deposit placement.

2.1.3. Comprehensive Income


Comprehensive income of the current year AND THE YEAR 2014 of Rp.
912.556.051 and Rp (153,743,924). When compared to 2014, the current year's
comprehensive income in 2015 increased by Rp. 1,066,299,975 or 693,56%.

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2.2 Liquidity Ratio Analysis
Understanding the Liquidity Ratio is an indicator of the ability of a company to pay all
short-term financial liabilities at maturity by using current flows that are still available or
otherwise can illustrate the company's ability to meet short-term (short-term) debt.
2.2.1 Curret Ratio
Current Assets
Current Ratio =
Current Liabilities

Ratio
Year Current Assets Current Liabilities
Rp %
2014 6.343.109.936 3.862.917.319 1,6 164,21 %
2015 11.252.826.560 4.339.330.380 2,6 259,32 %

From the table above can be seen that ;


Year 2014: Current assets amounting to 1.6 times current liabilities or every 1 rupiah current
liability secured by 1.6 current assets or 1.6: 1 between current assets with current liabilities.
Year 2015: Current assets amounting to 2.6 times current liabilities or every 1 rupiah current
liabilities secured by 2.6 current assets or 2.6: 1 between current assets with current
liabilities.
The ratio of total current assets to current liabilities rose from 164.21% in 2014 to 259.32%
in 2015. The increase of 95.11% indicates an increase in the ability of companies to pay
current liabilities covering business debt, employee benefits liability, taxes others, customer
advances and other debts.
Current ratio increases because current assets increased by Rp. 4,909,716,624 from 2014 to
2015. High current ratios are also not necessarily good for the company as it shows less
optimal fund management.

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2.2.2 Quick Ratio
Quick Ratio = Current Assets – Inventory
Current Liabilities
RATIO
Year Current Assets Inventory Current Liabilities
Rp %
2014 6.343.109.936 1.761.888.223 3.862.917.319 1,2 118,59 %
2015 11.252.826.560 1.752.584.557 4.339.330.380 2,2 218,93 %

The ratio of quick ratios> 100% (more 100%) indicates that the company is able to pay
current debts with more liquid assets (no inventory).
In 2015 ANTAM has increased its quick ratio by 100.34%, although current liabilities have
increased by Rp. 476.413.061. This is in line with the increase in cash and cash equivalents
of Rp. 5,467,724,089 from 2014 to 2015.

2.2.3 Cash Ratio


Cash Ratio = Cash and cash equivalents

Current Liabilities

Cash and cash Ratio


Year Current Liabilities
equivalents Rp %
2014 2.618.910.283 3.862.917.319 0,7 67,80 %
2015 8.086.634.372 4.339.330.380 1,9 186,36 %
In 2014 showed that by using cash and cash equivalents, the company has not been able
to pay its current liabilities. The cash ratio of 67.80% indicates that the condition is not good
because to pay the current debt the company must sell other current assets that increase the
risk of loss for the company.

However, in 2015 an increase of 118.56% in line with the increase in cash and cash
equivalents are quite high at Rp. 5,467,724,089 indicating an increase in the company's
ability to repay its current liabilities. The high cash ratio is also not very good because it
shows there are funds that are idle or not utilized optimally.

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2.2.4 Cash Turn Over
Cash Turn Over = Net Sales / Current Assets – Current Liabilities

Current Ratio
Year Net Sales Current Assets
Liabilities Rp %
2014 9.420.630.933 6.343.109.936 3.862.917.319 3,8 379,83 %
2015 10. 531.504.802 11.252.826.560 4.339.330.380 1,5 152,33 %

2014 and 2015 shows worse conditions than other similar companies because it is
well below the industry average. Cash turnover ratio decreased from 379.83% to 152.33%
thus if the cash rotation ratio is low, it can be interpreted that cash embedded in the assets
is difficult to be cashed in a short time so the company has to work hard with less cash.

2.3 Solvability Ratio Analysis

2.3.1 Debt to Asset Ratio


Total Debt
Debt to Asset Ratio =
Total Assets

Ratio
Year Total Assets Total Debt
Rp %
2014 22.004.083.680 9.954.166.791 0,5 45,24 %
2015 30.356.850.890 12.040.131.928 0,4 39,66 %

This ratio indicates that 45.24% of the company's financing is financed with debt for
2014. Every Rp. 100 company funding, 45.24 financed with debt and Rp. 57.76 is provided
by shareholders.
The year 2015 shows that the debt to asset ratio of 39.66% indicates that funding of 39.66%
of companies is financed with debt, every Rp. 100 company funding, 39.66 % financed with
debt and RP. 60.34 are provided by shareholders.
By looking at the above ratio can be seen also that for two years the company is still able to
guarantee total debt using total assets owned. Despite a decrease of 5.58% from 45,24% -

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39,66 % due to additional loans, the company is still considered to be liquid and solvable,
meaning the company can meet its short-term and long-term financial obligations.

2.3.2 Debt to Equity Ratio


Total Debt
Debt to Equity Ratio =
Total Equity

Ratio
Year Total Debt Total Equity
Rp %
2014 9.954.166.791 12.049.916.889 0,8 82,61 %
2015 12.040.131.928 18.316.718.962 0,7 65,73 %

This ratio indicates that the creditor provides Rp. 83 (rounded) in 2014 for every Rp.
100 provided by shareholders. Or the company is financed by debt as much as 82.61%.
While in 2015 decreased by 16.88% from 82,61% - 65,73% , this decrease was caused by
an increase in equity due to the addition of paid up capital and surplus from revaluation of
company assets. Total debt to equity ratio in ANTAM 2014 and 2015 indicates that the
ratio is quite good because it is under 100%, whereas if the ratio is above 100% dangerous
for the creditor because the debt is bigger than the owner's capital.

2.3.3 Long Term Debt to Equity Ratio

Total Long Term Debt


Long Term Debt to Equity Ratio =
Total Equity
Rasio
Tahun Total Long Term Debt Total Equity
Rp %
2014 6.091.249.472 12.049.916.889 0,5 50,55%
2015 7.700.801.548 18.316.718.962 0,4 42,04%

The ratio of long term debt to equity ratio decreased in 2015 by 8.51% due to ANTAM's
total equity increase of Rp. 6.266.802.073 so that long-term debt is met by capital also
decreased.

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ANTAM's long term debt to equity ratio in 2014 and 2015 indicates that the company can
reduce its long-term debt to the company's capital as collateral to cover its long-term debt
because it is well below the normal index of under 100%.

2.4 Activity Ratio Analysis

2.4.1 Receivable Turn Over


Receivable Turn Over = Sales / Average Receivables

Receivable
Year-end Average
Year Sales (Beginning of the Ratio
receivables Receivables
year)
2014 9.420.630.933 1.189.691.535 1.098.938.304 1.144.314.920 8
2015 10.531.504.802 1.098.938.304 578.144.630 838.541.467 12,5

This means that the receivable turnover for 2014 is 8 times compared to sales and
receivable turnover is 12.5 times compared to sales. In 2015, the receivable turnover ratio
has increased by 4.5 times indicating that the receivable turnover is getting better. it can be
seen that a high turnover ratio reflects the better quality of accounts receivable. The high
turnover of receivables depends on the amount of capital invested in receivables. The faster
the receivable turnover means the faster the capital returns. The company's receivable
turnover rate can illustrate the level of efficiency of the company's capital invested in the
receivables, so the higher turnover of receivables means the more efficient the capital used.

average collection of accounts receivable

average collection of accounts receivable = 360 / receivable turnover

Tahun Receivables Turn Over Average collection of accounts receivable


2014 8,23 43,7
2015 12,5 28,8

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In 2015, the collection period shows an increase to 28.8 days compared to 2014 which
reached 43.7 days. This shows that the collection of accounts receivable becomes faster
and better. Average billing in industry is 360/15 = 24 days.

2.4.2 Inventory Turn Over


Inventory Turn Over = Sales / Inventory

Average
Tahun Sales Inventory Ratio
collection of AR
2014 9.420.630.933 1.761.888.223 5,3 67
2015 10.531.504.802 1.752.584.557 6,0 60

The inventory turnover ratio in 2014 shows that 5 times the inventory is replaced in one
year with 67 stored average while in 2015 it has a not so significant increase of 6 times the
company replaces the inventory in one year with 60 days storage inventory rate. This means
that in 2014, the company's inventory turnover is 5 times (rounding result of 5.3) if divided
by the number of days ie 360 / 5.3 then the average stored in 2014 is 67, as well as in the
year 2015 company inventory turnover as much as 6 times if divided by the number of days
that is 360 / 5.3 then the average stored in the year 2014 is 60. Inventory turnover PT.
ANTAM increases by 0.7 which means that the product sells quickly and its inventory
management is managed effectively and efficiently so that it increases the company's
revenue and increases the company's profit.

2.4.3 Working Capital Turn Over


Working Capital Turn Over = Net Sales / Current Assets

Tahun Net Sales Current Assets Ratio


2014 9.420.630.933 6.343.109.936 1,5
2015 10.531.504.802 11.252.826.560 0,9

The turnover of working capital in 2014 is 1.5 times. This means every Rp. 1 working
capital can generate 1.5 sales. As for the year 2015 every Rp. 1 working capital can generate
0.9 sales. The low turnover of working capital may be due to low inventory turnover or
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accounts receivables and cash balances that are too large. This means that the company is
working capital, and has not been maximally utilized in producing the company's output in
this case the company needs to reduce or save the operational costs of the company so that
the maximum working capital can be used for the production process of the company.

2.4.4 Fixed Assets Turn Over

Fixed Assets Turn Over = Net Sales / Total Fixed Assets

Year Net Sales Total Fixed Assets Ratio


2014 9.420.630.933 8.833.311.563 1,1
2015 10.531.504.802 12.369.563.671 0,9

The fixed assets turnover ratio of 2014 shows that every Rp. 1 fixed assets generate sales of
Rp. 1.1. In 2015 it decreased to 0.9, meaning the company's capability decreased compared
to 2014. The fixed assets turnover ratio of 2014 shows that every Rp. 1 fixed assets
generate sales of Rp. 1.1. In 2015 it decreased to 0.9, meaning that the company's
capability decreased compared to 2014. When viewed from the rotation of the company's
fixed assets decline in 2015, there may be a capacity too large or there are many fixed
assets but less useful or possibly due to matters such as investments in fixed assets are
excessive compared with the value of output to be obtained.

2.4.5 Total Assets Turn Over

Total Assets Turn Over = Net Sales / Total Assets

Year Net Sales Total Assets Ratio


2014 9.420.630.933 22.004.083.680 0,4
2015 10.531.504.802 30.356.850.890 0,3

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Total asset turnover 2014 sebanyaK 0.4 times. This means every Rp. 1 asset can earn Rp.
0.4 sales. While the year 2015 assets generate 0.3 sales. This shows that the company has
not been able to optimize the assets owned.

2.5 Profitability Ratio Analysis

2.5.1 Net Profit Margin


Net Profit Margin = Net Profit / Sales x 100%

Year Net Profit Sales NPM Increace/Decrease


2014 793.361.160 9.420.630.933 0,08 - 0,06
2015 195.140.645 10.531.504.802 0,01 0,07

The calculation of this ratio indicates that net profit margin in 2014 has decreased
the ratio of -0.06 to become so that it becomes 0.08. This means that the company's ability
to generate net profit from each sale made is 0.08. Decrease Ratio is caused by the net profit
generated slightly from the previous year although sales rose. In 2015 net profit margin of
0.01 or 0.07%, it can be said that in 2014-2015 PT ANTAM in bad condition, because net
profit margin is below the industry average that is 0.16%.

2.5.2 Return On Equity


Return On Equity = profit after tax / owner’s equity x 100%

Tahun Net Profit Owner’s Equity Return on Equity Increase


/Decrease
2014 (153.743.924) (790.792.559) 0,19 3,27
2015 912.556.051 (1.668.773.924) (0,54) - 0,35

Based on the industry average of the company for return on equity, if above the industry
average means the company is said to be good. In 2014 there is an increase in Return on
Equity of 3.27 so that the Return on Equity of the company to 0.19, means that the
company generates net profit by using its own capital of 0.19. This means that the company
is able to generate net profit by using its own capital which means good financial condition

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of the company. While in 2015 Return on Equity obtained by the company mangalami
decline ratio of the year 2014 amounted to 0.35, This indicates the inability of the company
to generate net profit using its own capital.

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CHAPTER III

3.1 Conclusions

RATIO 2014 2015


Liquidity Ratio
Current Ratio 1,6 2,6
Quick Ratio 1,2 2,2
Cash Ratio 0,7 1,9
Cash Turn Over 3,8 1,5
Solvability Ratio
Debt to Asset Ratio 0,5 0,4
Debt to Equity Ratio 0,8 0,7
Long term debt to equity Ratio 0,5 0,4
Activity Ratio
Receivable Turn Over 8 12,5
Inventory Turn Over 5,3 6,0
Working Capital Turn Over 1,5 0,9
Fixed Assets Turn Over 1,1 0,9
Total Assets Turn Over 0,4 0,3
Profitability Ratio
Net Profit Margin 0,08 0,01
Return On Equity 0,19 0,54

ANTAM's liquidity ratio shows that the company has been able to pay its short-term and
long-term debts using its current assets. Increased cash balances are too high not too good
because it shows there are funds that can not be optimized by management (iddle money).
Cash turnover indicates an unsatisfactory ratio because it shows that ANTAM is unable to
pay its obligations and related costs of sales with working capital.

Almost 50% of the company's financing is financed by debt in 2014, and has decreased in
2015. Although the company is still classified as liquid with total assets owned but this will
be difficult if the company wants to increase the loan.

The activity ratio shows the collectibility of receivables that are less effective considering
the collection period of 2014 as much as 44 days, but decreased in the year 2015 to 29 days.

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Inventory turnover indicates an unsatisfactory number because only 5 to 6 times the
inventory is replaced within 1 year. Company owned assets are not used effectively because
they generate fewer sales.

Viewed from the table financial ratios can be determined state of profitability ratios are
not good. The value of this profitability ratio as a whole has a fluctuating or unstable value.
Viewed from the Net Profit Margin, the ratio is below the industry average. Judging from the
Return on Equity indicates that the company has decreased, it indicates the company has not
been able to operate the assets owned to generate the profit of each sale.

3.2 Recommendations
ANTAM management should further improve its performance in managing the funds
that are accommodated either in the form of current assets (cash and cash equivalents,
inventory etc.), other current assets and fixed assets so that assets are more productive.

The company's solvency ratio still shows good condition but the company must reduce its
short-term and long-term debt in order to improve the situation with the decreasing of debt.
Management should increase effectiveness in reducing cost of goods sold by conducting
market research. Research is very helpful in projecting changes in commodity prices both in
the present or future, so the company can decide whether this year should stock up raw
materials at normal prices or buy in the current year with prices already rising.

Mitigate the risk of defaulted buyers by applying early payment policies or with the
practice of sale offtake (agreement to order goods in the future), with this written agreement
the company can determine how the manner and term of payment.

PT ANTAM, to improve the company's condition of the profitability ratio by increasing


the company's net profit.

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