Analysis financial Report - final (46110015)

1.       General explanation of ALK

Analysis of the financial statements of a company basically because I wanted to know the level of profitability (profit) and the level of risk or the health of a company. Financial analysis that includes financial ratio analysis, analysis of strengths and weaknesses in the financial sector will be very helpful in assessing management performance of the past and prospects for the future.

 The significance of financial statement analysis are as follows: 
a.      To management: to evaluate the company's performance, compensation, career development.

b.      For shareholders: to investigate the performance of the company, income, investment security.

c.      For creditors: to determine the company's ability to pay off the debt with interest.

d.      For the government: taxes, approval to go public.

e.      For employees: adequate income, quality of life, job security

Profitability is the ability of the company to generate a profit and sustain growth in both short term and long term. Profitability of the company is usually seen from the company's profit and loss (income statement) that shows the performance results of the company's report.

Solvency is the ability of the company to complete all its obligations, which is measured by making comparisons across all assets and liabilities against all liabilities to equity ratio

Liquidity is the ability of the company to complete its current liabilities are measured using the ratio of current assets to current liabilities

Stability is the ability of the company to maintain its business in the long term without having to suffer losses. Used to assess the stability of the company's income statement and balance sheet (balance sheet) as well as the company's various financial and non-financial indicators of other

2.       The method used in analysis

Analysis of solvency (solvency analysis) is an analysis of the company's ability to meet all its obligations, both short-term liabilities and long term liabilities. This analysis includes an analysis of two analyzes of capital structure (capital structure) and the coverage of earnings (earnings coverage). Both of these analyzes illustrate the level of financial risk and the company's ability to meet its financial payments for funding that has been done.

Analyzing Solvency: Company Earnings Coverage

Limitations of the use of capital structure as an analytical tool is not able to describe the availability of cash flow to service the debt of the company, either to pay interest or principal repayment. Therefore, the existence of analytical coverage of earnings (earnings coverage) to cover these weaknesses.

This analysis can give you an idea how far the company's ability to cover financial obligations to the owners of capital, such as investors, creditors, suppliers, etc.. In addition, the results of this analysis can also be useful to determine the level of use of debt decisions.

Capital structure analysis

1.    Financial leverage ratio shows how much the assets owned by the company financed from equity. 2.   The total debt to total capital ratio shows the composition of the debt financing with the rest of the funding. 

3.     Total debt to equity capital ratio shows composition of debt financing to equity financing.

4.   Long-term debt to equity capital ratio shows the composition of long-term debt financing to equity financing.

5.       short-term debt to total debt ratio shows the composition of debt financing.

earnings coverage analysis

1. earnings to fixed charges ratio shows how much profit is generated is available to cover fixed expenses companies.

2.  Time ratio earning shows how much profit available to cover interest expense.

3. cash interest coverage ratio  demonstrate the ability of companies providing cash to cover interest expense.

4. cash flow to fixed charges ratio shows how much cash flow from operations that is available to cover fixed charges

Times interest earned ratio

Ratio multiples interest (times interest earned ratio) or usually called interest coverage ratio (interest coverage ratio) shows how much profit available to cover interest expense. This ratio indicates a company's ability to pay interest expense on debt financing is used. Profit available is earnings before interest and taxes generated by the company. Interest expense represents interest expense on borrowings. To calculate the ratio of interest multiples (RKB) is used Equation 5.7.

   ……….  (5.7)

                                     

3.       Financial report

Financial report is a report containing the results of the calculation of the accounting process that shows the financial performance of a company at a given moment.

Type of Financial Statements

a.     Balance Sheet: a systematic reports on the assets, liabilities, capital of a company at a particular moment indicates the financial position (assets, liabilities and capital) at a given time.
Goal is balance sheet shows the financial position of a company at a given date, usually at the time when the books are closed and the remainder determined at the end of the fiscal year or a calendar year (eg, December 31, 200x)

b.    Income statement: a statement that shows the revenues from sales, various costs, and profits earned by the company during the specified period.

c.     Retained earnings report: shows changes in retained earnings for a certain period.

d.      Statements of cash flows: cash flows during the period showed certain.

e.    Notes to the financial statements: the balance sheet and contains detailed income statements, accounting policies, and so forth

4.       The analysis proses/procedure

Tahun	Laba sblm pajak	Beban bunga	EBIT	RKB
2011	15.993.001.807	330.610.400	16.323.612.207	49,4
2012	18.801.871.324	414.300.587	19.216.171.911	46,4

5.       Conclution

Based on the calculations that have been done show that in 2011, PT Mustika Ratu Tbk and Subsidiary Entities capable of generating earnings of 49.4 times interest expense to be borne. Likewise in 2012, the company was able to produce 46.4 times profit from interest expense to be borne.

Results of these calculations indicate that in 2011 and 2012, PT Mustika Ratu Tbk and Subsidiary Entities are very solvable because it can produce a very adequate earnings to cover expenses incurred banga. Thus the company is still very possible to increase the debt financing.