PT.

Indofood Sukses Makmur Tbk

Financial Analysis Report

ACCOUNTING
(MM5002)

LARINDA RAKHMAT HAKIM

29316014 | GM3
MBA ITB
TABLE OF CONTENT
Company Profile

TABLE OF CONTENT
Company Profile
Financial Report
A Balance Sheet
B Income Statement
C Statement of Shareholders Equity
D Statement of Cash Flow
Financial Ratio Calculation
Financial Ratio Result
Financial Ratio Analysis
Summary
Exhibit

Page 1

COMPANY
PROFILE

Page 2

OVERVIEW

INDF

PT Indofood Sukses Makmur Tbk

History
From simple beginnings as an instant noodle producer, Indofood
has been progressively transformed to become a Total Food
Solutions company with operations in all stages of food
manufacturing from the production of raw materials and their
processing through to consumer products on the retailer's
shelf. A leader within its industry in Indonesia, an extensive
distribution system supports the position of the Company's
products as household names in every part of the country.
Vision
To Become a Total Food Solutions Company.
Mission
To enhance the value of the organization for stakeholders :
To continuously improve our people, our process and our technology.
To produce high quality, innovative, and affordable products which are
preferred by customers.
To ensure availability of our products to customers domestically and
internationally.
To contribute to the improvement of the quality of life of Indonesians with
emphasis on nutrition.
To continuously improve stakeholders value.

Brief History of the Company

PT Indofood Sukses Makmur Tbk, which was incorporated as PT Panganjaya
Intikusuma in 1990, has various businesses that have been operational
since the eraly 1980s.

2014
Year
The CBP Group expanded its beverage business by entering the
packaged water business, with the acquisition of packaged water assets
including the Club brand.

Page 3

2013
Year
The CBP Group entered the beverage business through JV companies
with Asahi Group Holdings Southeast Asia Pte. Ltd., established in 2012.
The Agribusiness Group expanded its sugar business to Brazil and the
Philippines through equity investment in Companhia Mineira de Acar e
lcool Participaes and Roxas Holdings Inc.
Entered the cultivation and vegetable processing business by
acquiring China Minzhong Food Corporation Limited, a SGX-listed integrated
vegetable processing company in China.
2011
Year
Listed PT Salim Ivomas Pratama Tbk, a subsidiary of the Agribusiness
Group, on the IDX.
2010
Year
Listed the CBP Group, PT Indofood CBP Sukses Makmur Tbk, on the

IDX.

2008
Year
The Agribusiness Group ventured into the sugar business by acquiring
PT Lajuperdana Indah.
The Consumer Branded Products (CBP) Group entered the dairy
business by acquiring PT Indolakto, one of the leading dairy producers in
Indonesia.
2007
Year
Listed the Agribusiness Group, Indofood Agri Resources Ltd., on the
Singapore Stock Exchange (SGX).
The Agribusiness Group expanded its plantation holdings by acquiring
PT PP London Sumatra Indonesia Tbk, an IDX-listed plantation company.
2005
Year
Entered the shipping business through the acquisition of PT Pelayaran
Tahta Bahtera.
1997
Year
Expanded its business integration by acquiring a group of companies
involved in plantations, agribusiness and distribution.

Page 4

1995
Year
Commenced backward integration with the acquisition of the Bogasari
flour mill.
1994
Year
Renamed PT Indofood Sukses Makmur.
Listed on the Indonesia Stock Exchange (IDX).
1990
Year
Incorporated as PT Panganjaya Intikusuma.
Entered the snack foods business through a joint venture (JV) with
Fritolay Netherlands Holding B.V., an affiliate of PepsiCo Inc.

Page 5

Page 6

Page 7

Page 8

Page 9

Page 10

Page 11

2009 |

FINANCIAL
REPORT

BALANCE SHEET

Page 12

BALANCE SHEET (Continued)

Page 13

BALANCE SHEET (Continued)

Page 14

INCOME STATEMENT

Page 15

STATEMENT OF SHAREHOLDERS EQUITY

Page 16

STATEMENT OF CASH FLOW

Page 17

Page 18

FINANCIAL RATIO

CALCULATION

FINANCIAL RATIO CALCULATION

N
o

Ratio

Formula
Market Price Per Share

PER

Net Income Per Share

Income + Interest (1-Tax
Rate)

ROA

ROI

ROE

Shareholder's Equity

236
15.04 Times

2008
=

930
120

7.75 Times

5,004,209,00
0
40,382,953,0
00

4,341,476,00
0
39,591,309,0
00

12.4 %

11 %

2,075,861,00
0
40,382,953,0
00

1,034,389,00
0
39,591,309,0
00

5.14 %

2.6 %

2,075,861,00
0
10,155,495,0

1,034,389,00
0
8,571,533,00

LL + SH'S Equity

Net Income

3550

Total Assets

Income + Interest (1-Tax

Rate)
3

2009

Page 19

00
=

20 %

12 %

10,121,946,0
00
37,140,830,0
00

8,976,917,00
0
38,799,279,0
00

27 %

23 %

2,075,861,00
0
37,140,830,0
00

1,034,389,00
0
38,799,279,0
00

5.6 %

3%

2,075,861,00
0
8,780,426,50
0

1,034,389,00
0
8,780,426,50
0

Rp 0,24

Rp 0,188

2,314,5
07,000
2,075,861,00
0

2,684,806,00
0
1,034,389,00
0

1.11 Times

2.6 Times

37,140,830,0
00
40,382,953,0
00

38,799,279,0
00
39,591,309,0
00

0.92 Times

0.98 Times

37,140,830,0
00
11,492,436,0
00

38,799,279,0
00
10,161,510,0
00

3.23 Times

3.82 Times

Gross Margin
5

GPM

Net Sales Revenue

Net Income
6

NPM

Net Sales Revenue

Net Income
7

Earnings Per
Share

No. Shares Outstanding

Cash Generated by
Operation

Cash
Realization

Net Income

Sales Revenue
9

1
0

Assets
Turnover

Total Assets

Sales revenue

Invested
Capital
Turnover

LL +SH'S Equity

*Expressed in IDR Rupiah, Unless Otherwise Stated

FINANCIAL RATIO CALCULATION (Continued)

No

Ratio

Formula

2009

2008

37,140,830,0
00
10,155,495,0
00

38,799,279,0
00
8,571,533,00
0

3.66 Times

4.53 Times

37,140,830,0
00
10,808,449,0
00

38,799,279,0
00
9,586,545,00
0

3.44 Times

4.05 Times

4,474,830,00
0
29,956,890.4

4,271,208,00
0
32,799,276.7

Sales Revenues
11

Equity Turnover

Shareholders' Equity

Sales Revenues
12

13

Capital Intensity

Day's Cash

PPE

Cash
Cash Expenses 365

Page 20

11
=

155 Days

130 Days

2,296,474,00
0
10,175,569.8
63

2,760,971,00
0
106,299,394.
52

23 Days

26 Days

5,117,484,00
0
74,024,339.7
26

6,061,219,00
0
81,705,101.3
7

70 Days

74 Days

27,018,884,0
00
5,117,484,00
0

29,822,362,0
00
6,061,219,00
0

5.28 Times

4.92 Times

37,140,830,0
00
12,954,813,0
00

38,799,279,0
00
14,323,261,0
00

2,87 Times

2.71 Times

12,954,813,0
00
11,158,962,0
00

14,323,261,0
00
16,262,161,0
00

1.16 Times

0.88 Times

7,102,634,00
0
11,158,962,0
00

7,655,313,00
0
16,262,161,0
00

0.634 Times

0.47 Times

40,382,953,0
00
10,155,495,0
00

39,591,309,0
00
8,571,533,00
0

4 Times

4.62 Times

Account Receivables
14

Day's
Receivables

Sales 365

Inventory
15

Day's Inventory

Cost of Sales 365

Cost of Sales
16

Inventory
Turnover

Inventory

Sales Revenue
17

Working Capital
Turnover

Working Capital

Current Assets
18

Current Ratio

Current Liabilities

Monetary Current
Assets
19

Quick Ratio

Current Liabilities

Assets
20

Financial
Leverage Ratio

12

Shareholders' Equity

*Expressed in IDR Rupiah, Unless Otherwise Stated

FINANCIAL RATIO CALCULATION (Continued)

No

Ratio

Formula
Long-term Liabilities

21

22

Debt/Equity Ratio

Debt/Capitalization

Shareholders' Equity

Long-term Liabilities
LL +SH'S Equity

2009

2008

24,866,781,00
0
=
10,155,495,00
0

245 %

= 24,866,781,00

0
11,492,436,00
0

26,432,369,00
0
8,571,533,000

308 %

= 26,432,369,00
0

10,161,510,
000

Page 21

(EBIT + Interest)
23

Time Interest
Earned

11.7 %

4,063,813,0
00

Interest
Cash Generated
Operation

24

Cash Flow / Debt

Dividend Yield

Market Price Per Share

2,314,
507,000

Dividends
Dividend Payout

Net income

16,516,000

25.10 Times

26

2,599,823,0
00

25

15.7 %

161,885,000

Total Debt

Dividends Per Share

24,886,781,00
0

9.3 %
0.047
3550
0.0013 %

=
=
=

412,680,000

15.43 Times
2,684,806,000
26,432,269,00
0

10.16 %
0.044
930
0.0047 %
386,730,000

2,075,861,0
00

1,034,389,0
00

20 %

37%

*Expressed in IDR Rupiah, Unless Otherwise Stated

FINANCIAL RATIO

RESULT
Page 22

FINANCIAL RATIO RESULT

No.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Ratios

2009

2008

OVERALL PERFORMANCES MEASURES

Price/Earnings Ratio
(x)
15.04
7.75
ROA
(%)
12.4
11
ROI
(%)
5.14
2.6
ROE
(%)
20
12
PROFITABILITY MEASURES
GPM
(%)
27
23
NPM
(%)
5.6
3
EPS
($)
0.24
0.188
Cash Realization
(x)
1.11
2.6
TESTS OF INVESTMENT UTILIZATION
Assets Turnover
(x)
0.92
0.98
Invested Capital
(x)
3.23
3.82
Turnover
Equity Turnover
(x)
3.66
4.53
Capital Intensity
(x)
3.44
4.05
Day's Cash
(Days)
155
130
DSO
(Days)
23
26
DSI
(Days)
70
74
Inventory Turnover
(x)
5.28
4.92
Working Capital
(x)
2.87
2.71
Turnover
Current Ratio
(x)
1.16
0.88
Quick Ratio
(x)
0.634
0.47
TESTS OF FINANCIAL CONDITION
Financial Leverage
(x)
4
4.62
Ratio
DER
(%)
245
308
DCR
(%)
11.7
15.7

Diff.

7.29
1.4
2.54
8
4
2.6
0.052
-1.49
-0.06
-0.59
-0.87
-0.61
25
-3
-4
0.36
0.16
0.28
0.164
0.62
-63
-4

Page 23

23
24
25
26

Times Interest Earned

(x)
25.10
Cash Flow / Debt
(%)
9.3
TESTS OF DIVIDEND POLICY
Dividend Yield
(%)
5.8
Dividend Payout
(%)
57

15.43
10.16

9.67
-0.86

2.8
36

3.0
21

FINANCIAL RATIO

ANALYSIS
No
.

Ratios

Formula

2009

2008

Diff.

OVERALL PERFORMANCES MEASURES

Price/Earnings Ratio

Market Price Per Share

15.04
7.75
7.29
Net Income Per Share
Price Earnings Ratio (PER) is a measurement to determine how to value or market
price of the shares of the company. The desire of investors to analyze the share
through the analysis of financial ratios such as Price Earnings Ratio (PER) is due to the
desire of investors or potential investors with the worthy result (return) of a stock

Page 24

investment. Resulting PER increased from 7.75 to 15.04. With the increasing in PER,
this Indofood means that the stock price to increase too. Thus, the management
company must maintain the confidence of the ordinary investor (or investors may be
new) for invest their money into the company. But the company must be careful,
because PER high value means that the risk is also high.

Return on Assets

Income + Interest (1-Tax

Rate)

Return on Investment

Income + Interest (1-Tax

Rate)

Return on Equity

No
.

12.4%
11%
1.4%
Total Assets
The return on assets ratio, often called the return on total assets, is a profitability ratio
that measures the net income produced by total assets during a period by comparing
net income to the average total assets. In other words, the return on assets ratio or
ROA measures how efficiently a company can manage its assets to produce profits
during a period. From the above data, we can see that the ROAs difference 1.4%
increased to be better from the previous year to get profits. This means the Indofood
company occur efficiency in carrying out the company's daily operations.

5.14%
2.6%
2.54%
LL + SH'S Equity
The return on investment capital (ROIC) is the percentage return that a company
makes over its invested capital. However, the invested capital is measured by the
monetary value needed, instead of the assets that were bought. Therefore invested
capital is the amount of long-term debt plus the amount of common and preferred
shares. ROIC tells us how good a company is at turning capital into profits. Result the
ROI increased significantly from previous year from 2.6 to 5.14. meaning that the
company's performance is getting better and

Net Income

20%
12%
8%
Shareholder's Equity
While the return on capital measures the return on all capital invested in an asset, the
return on equity focuses on just the equity component of the investment. Return on
equity measures how efficiently a firm can use the money from shareholders to
generate profits and grow the company. Unlike other return on investment ratios, ROE
is a profitability ratio from the investor's point of viewnot the company. In other
words, this ratio calculates how much money is made based on the investors'
investment in the company, not the company's investment in assets or something
else. Every rupiah own capital to produce a net profit of Rp 12% and 20% are available
for holders of preference shares and ordinary. So the owner of the company is getting
stronger position to press ahead with an increase in the value of the ratio resulted in
an improved return on investment.
Ratios

Formula

2013

2012

27%

23%

Diff.

PROFITABILITY MEASURES

Gross Margin Ratio

Gross Margin
Net Sales Revenue

4%

Page 25

Gross margin ratio is a company's total sales revenue minus its cost of sales, divided
by the total sales revenue, expressed as a percentage. The gross margin represents
the percent of total sales revenue that the company retains after incurring the direct
costs associated with producing the goods and services sold by a company. The higher
the percentage, the more the company retains on each dollar of sales to service its
other costs and obligations. The data above showed that the gross margin percentage
of the company in 2009 is higher than in 2008. So, Indofood must maintain or continue
to increase their sales in the coming years to obtain better sales revenue and net
profit.
6

Profit Margin Ratio

Earnings Per Shares

No
.

Net Income

5.6%
3%
2.6%
Net Sales Revenue
profit margin most basic profitability ratios that measure the percentage of net income
to net sales. This is the proportion of sales left over after all relevant costs have been
adjusted. The above data shows that the company has increased profit margin
compared to the previous year. Rupiah net profit per sale. every penny sales
generating net profits amounted to 5.6% and 3%. This shows that in 2009 the
company efficiently manage their operational costs due to lower operating costs than
the previous year.
Net Income

Rp
0.24

Rp
0.188

Rp
0.052

No. Shares Outstanding

Earning per share, also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding. In other
words, this is the amount of money each share of stock would receive if all of the
profits were distributed to the outstanding shares at the end of the year. An increase in
the company's EPS Indofood from 2008 to 2009 is 0.188 to 0.24 . Because Higher EPS
is always better than a lower ratio that net income had a increased followed by the
decreased o number outstanding stock and the company is more profitable and has
more profits to distribute to its shareholders.

Cash Realization

Cash Generated by
Operation

1.11
2.6
-1.49
Net Income
Cash Realization is calculated by dividing cash flow from operating activities by net
income. It measures how close a companys net income is to being realized in cash.
Companies that are less risky have cash realization ratios that exceed 1.0, indicating
that income may not be dependent on non-cash sources such as mark-to-market
accounting valuations, which can be affected by aggressive valuation decisions by
management. This ratio is considered a good measure of earnings quality. Indofood
was within the good condition due to the cash realization is above 1 in 2008. It
indicates that the company not dependant to non-cash source which can be affected
by the management about valuation decisions and the company was experienced less
risk than the company with cash realization rates less than 1. But 2009, the cash
realization rate decrease to 1.11 which indicates that cash generated by operation
below its Net Income.
Ratios

Formula

2009

2008

Diff.

TESTS OF INVESTMENT UTILIZATION

Page 26

Total Assets Turnover

Sales Revenue

0.92
0.98
-0.06
Total Assets
Asset turnover ratio is the ratio of the value of a companys sales or revenues
generated relative to the value of its assets. The asset turnover ratio can often be
used as an indicator of the efficiency with which a company is deploying its assets in
generating revenue. Higher turnover ratios mean the company is using its assets more
efficiently. Lower ratios mean that the company is not using its assets efficiently and
most likely have management or production problems. The data above showed that
Indofood decreasing from 0.98 to 0.92 also experiencing the declining of asset
turnover ratio if compared to the previous year. Although both of the sales revenue
and cost of sales are growing, the increasing number of total assets is significantly
higher than the sales revenue, which leads to the declining of assets turnover. This
showed that Indofood have problems in managing their assets efficiently. So, for the
upcoming years Indofood should conduct better efficient assets management in order
to gain higher sales revenue.

10

Invested Capital
Turnover

11

Equity Turnover

12

Capital Intensity

Sales revenue

3.23
3.82
-0.59
LL +SH'S Equity
Invested capital turnover explains about how good a company uses the invested
capital to generate sales. The quotient answers questions about how much sales (in
relative terms) the business is generating with money raised from investors and
creditors. We could see from data above that the invested turnover of Indofood is
declining from 3.82 in 2008 to3.23 in 2009. This declining number of invested turnover
ratio is due to the significant increasing of shareholders equity that higher than the
increasing of sales revenue even though the liabilities it are decreasing. This showed
that the company is inefficiently producing their sales revenue from their debt and
equity, so that they better improve their sales for the upcoming years to increase their
sales revenue.
Sales Revenues

3.66
4.53
-0.87
Shareholders' Equity
Equity turnover is a ratio that measures the proportion of a company's sales to its
stockholders' equity. The intent of the measurement is to determine the efficiency with
which management is using equity to generate revenue. The equity turnover from the
table above showed that Indofood is experiencing the decreasing number. This is
caused by the increasing number of shareholders equity that more significant than
the increasing number of sales revenue. This indicates that the company in 2009
(3.66) is less efficient in using its capital if compared to 2008 (4.53). So that Indofood
should develop their capability in managing their capital to generate more revenues in
upcoming years.
Sales Revenues

3.44
4.05
-0.61
PPE
Capital Intensity ratio is an indicator that measures of how much company revenue
generated from its fixed asset capital (property, plant and equipment). The table
above showed that Indofood capital intensity is declining from the previous year. This
indicates that the company is better than previous year in using their capital to
operate their business. This means that in 2009 company just need 3.44 rupiah to
generate 1 rupiah revenue, while in 2008 the company need 4.05 rupiah to generate
the same amount revenue. So, even though in 2009 Indofood is already in the process
of enhancing their performance of managing their capital, the company should work

Page 27

better to generate more sales within the minimal capital budget.

No
.

Ratios

Formula

2009

2008

155

130

Diff.

TESTS OF INVESTMENT UTILIZATION

13

Day's Cash

Cash
Cash Expenses 365

25

Days Cash is an indicator for how many day bills the cash on hand would pay. Days'
cash Indicates cash on hand in relation to amount of daily operating expenses. This
calculation is one way to judge how well the company is managing its cash. High
values implying high liquidity and good by the creditor. At this point, Indofood there
are no serious problems. The rate of increase 155-130 days in 2009. This reflects that
the company system of controlling their cash and estimating the cash is enough for
daily operation costs within the number of days is good enough.

14

Day's Receivables

15

Day's Inventory

Account Receivables

23
26
-3
Sales 365
Days receivables, or often referred to as days sales outstanding (DSO) is a measure
of the average number of days that a company takes to collect revenue after a sale
has been made. Days receivables is often determined on monthly, quarterly, or
annual basis and can be calculated by dividing the amount of account receivable
during a given period by the total value of credit sales during the same period, and
multiplying the result by the number of days in the period measured. An analyst might
compare the days' sales in receivables with the company's credit terms as an
indication of how efficiently the company manages its receivables. Experience 3 days
Indofood decrease from 2009. That is due A / R decreased in 2008. Indofood take 23
days to review the account to collect receivables.

Inventory
Cost of Sales 365

70

74

-4

Page 28

The days sales in inventory calculation, also called days inventory outstanding or
simply days in inventory, measures the number of days it will take a company to sell
all of its inventory. In other words, the days sales in inventory ratio shows how many
days a company's current stock of inventory will last. This is an important to creditors
and investors for three main reasons. It measures value, liquidity, and cash flows. Both
investors and creditors want to know how valuable a company's inventory is. The data
above showed that the days inventory of Indofood is declining from 74 in 2008 to 70
in 2009. This indicates that the company is faster than previous year in selling its
current (fresh) inventory, because the obsolete inventory is worth less than the current
one. This could be considered good enough since the shorter days inventory means
the company can convert its inventory into cash sooner which leads to the better cash
flow.
16

No
.

Inventory Turnover

Cost of Sales

5.28
4.92
0.36
Inventory
Inventory turnover is a ratio that describes how many times a company inventory is
sold and replaced over a period. This ratio is a reciprocal from days inventory ratio.
Higher value indicates an efficient strategy in managing inventory. In the year 2009
increased, meaning that the company is working efficiently and illiquid stocks are
good.

Ratios

Formula

2009

2008

Diff.

TESTS OF INVESTMENT UTILIZATION

17

Working Capital
Turnover

18

Current Ratio

Sales Revenue

2.87
2.71
0.16
Working Capital
The working capital turnover is a measurement comparing the depletion of working
capital to the generation of sales over a given period. This provides some useful
information as to how effectively a company is using its working capital to generate
sales. The working capital turnover ratio is used to analyze the relationship between
the money used to fund operations and the sales generated from these operations. A
higher working capital turnover ratio is better. In 2009, Indofood had increase its
current liabilities for compare than 2008. It is a funding strategy to run the company
with short term liabilities. In the other hand, Indofood decreased it current assets. Both
cause working capital decreased compare than 2008 and make the ratio increase
significantly from 2.71 times to 2.87 times, means that company looks more efficient
than previous year. As well as the circulation of increasingly faster and no longer
working capital unemployed.

Current Assets

1.16
0.88
0.28
Current Liabilities
The current ratio is a liquidity and efficiency ratio that measures a firm's ability to pay
off its short-term liabilities with its current assets. The higher value always the better.
The current ratio helps investors and creditors understand the liquidity of a company
and how easily that company will be able to pay off its current liabilities. In 2008
Indofood had current assets that are not able to cover the current liability because the
ratio is less than 1. While the year 2009 current assets capable of covering the current

Page 29

liability because the ratio is more than 1 but not more than 2 thus increasing the
company's performance in the management of current assets.
19

No
.

Quick Ratio

Monetary Current Assets

0.634
0.47
0.164
Current Liabilities
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a
company to pay its current liabilities when they come due with only quick assets.
Higher quick ratios are more favorable for companies because it shows there are more
quick assets than current liabilities. A company with a quick ratio of 1 indicates that
quick assets equal current assets. This is due to the increasing number of current
liability is more significant than the increasing number of monetary current assets.
Even though this showed that the company is improving their performance in paying
their current liabilities, Indofood should work better to make their current ratio above
1, which indicates that company could pay off its current liabilities without selling any
long-term assets. Or even better, the company should reach the quick ratio of 2, which
showed that the company has a twice as many quick assets than current liabilities. We
can conclude that Indofood is not liquid to cover its short-term obligation but the trend
show that the company should still increased its assets and liabilities in next year.

Ratios

Formula

2009

2008

Diff.

TESTS OF FINANCIAL CONDITION

20

Financial Leverage
Ratio

21

Debt / Equity Ratio

Assets

4
4.62
-0.462
Shareholders' Equity
Financial leverage ratios, sometimes called equity or debt ratios, measure the value of
equity in a company by analyzing its overall debt picture. These ratios either compare
debt or equity to assets as well as shares outstanding to measure the true value of the
equity in a business. In other words, the financial leverage ratios measure the overall
debt load of a company and compare it with the assets or equity. This shows how
much of the company assets belong to the shareholders rather than creditors. When
shareholders own a majority of the assets, the company is said to be less leveraged.
When creditors own a majority of the assets, the company is considered highly
leveraged. All of these measurements are important for investors to understand how
risky the capital structure of a company and if it is worth investing in. This indicates
that the company is still considered risky for the investor because the company is
using debt and other liabilities to finance its assets. So, the company should work
better for upcoming years to lower the leverage, until the ratio is between 1-2 which
means the low risk for the company. It means that additional equity was converted
proportionally into Indofood assets.
Long-term Liabilities

245%
308%
-63%
Shareholders' Equity
The debt to equity ratio (DER) is a financial, liquidity ratio that compares a company's
total debt to total equity. The debt to equity ratio shows the percentage of company
financing that comes from creditors and investors. A higher debt to equity ratio
indicates that more creditor financing (bank loans) is used than investor financing
(shareholders). Lower the ratio means less risk on its financial or funding the Indofood
business compare to year 2008. The table above showed that the DER of Indofood
decreasing from previous year. This could be considered good performance for

Page 30

Indofood, because a lower debt to equity ratio usually implies a more financially stable
business. Companies with a higher debt to equity ratio are considered more risky to
creditors and investors than companies with a lower ratio. Creditors view a higher debt
to equity ratio as risky because it shows that the investors have not funded the
operations as much as creditors have. In other words, investors do not have as much
skin in the game as the creditors do. This could mean that investors do not want to
fund the business operations because the company is not performing well. Lack of
performance might also be the reason why the company is seeking out extra debt
financing. So, for next years, Indofood should maintain and improve their good
performance in order to prevent the need of funding from creditors and gain the trust
from the regular and new investors to fund the operations.
22

Debt / Capitalization

23

Times Interest Earned

24

Cash Flow / Debt

Long-term Liabilities

11.7% 15.7%
-4%
LL +SH'S Equity
The debt-to-capital ratio is a measurement of a company's financialleverage,
calculated as the company's debt divided by its total capital. The debt-to-capital ratio
of Indofood is decreasing from the previous year, which decreases from 15.7 in 2008
to 11.7 in 2009. This indicates that the company is tend to use equity financing rather
than debt financing, because the higher the debt-to-capital ratio, the more debt the
company has compared to its equity. A company with high debt-to-capital ratios,
compared to a general or industry average, may show weak financial strength because
the cost of these debts may weigh on the company and increase its default risk. We
can also conclude from those 3 ratios (DER, DCR and FLR) that Indofood is more
solvent in 2009 than 2008.
(EBIT + Interest)

25.10
15.43
9.67
Interest
The times interest earned ratio, sometimes called the interest coverage
ratio, is a coverage ratio that measures the proportionate amount of income
that can be used to cover interest expenses in the future.In some respects
the times interest ratio is considered a solvency ratio because it measures a
firm's ability to make interest and debt service payments. Since these
interest payments are usually made on a long-term basis, they are often
treated as an ongoing, fixed expense. As with most fixed expenses, if the
company can't make the payments, it could go bankrupt and cease to exist.
Thus, this ratio could be considered a solvency ratio. In year 2009 means
that one rupiah of interest guaranteed by 25.10 rupiah of profits. Although
the ratio had increase from 15.43 to 25.10, caused by significant decrease of
current liabilities, because the ratio indicates how many times a company
could pay the interest with its before tax income, so obviously the larger
ratios are considered more favorable than smaller ratios. Higher ratios are
less risky while lower ratios indicate credit risk.
Cash Generated Operation

9,3%

10.16
%

-0.86%
Total Debt
The cash flow-to-debt ratio is a ratio of a companys cash flow from operations to its
total debt. The cash flow-to-debt ratio is a type of debt coverage ratio, and is an
estimate of the amount of time it would take a company to repay its debt if it devoted
all of its cash flow to debt repayment. Cash flow is used to evaluate a companys funds
rather than earnings because it provides a better insight into a companys ability to
pay its obligations. With a significant reduction of the ratio of cash flow-to-debt

Page 31

Indofood from 10.16 percent in 2008 to 9.3 percent in 2009, it is not considered good
for the company because the lower the percentage ratios, not better the company's
ability to bring its total debt. This shows that Indofood was not a good performance in
2009, but Indofood must continue to develop and improve their performance in order
to prevent a decrease in the ratio of the number teradinya not coming year.

No
.

Ratios

Formula

2013

2012

5.8%

2.8%

Diff.

TESTS OF DIVIDEND POLICY

25

Dividend Yield

Dividends Per Share

Market Price Per Share

3%

The dividend yield is a financial ratio that measures the amount of cash dividends
distributed to common shareholders relative to the market value per share. Investors
use the dividend yield formula to compute the cash flow they are getting from their
investment in stocks. A high or low dividend yield is relative to the industry of the
company. It also depends on company dividend policy. The dividend yield from the
data above showed that it increases slightly from the previous year, with the
difference only 3 percent. This dividend yield could be considered stable since the
increasing number is significant. This reflected that the dividend that paid out from the
company each year relative to its share price is not increasing significantly. So, the
company should gain more profits in order to achieve more return on investment for a
stock
26

Dividend Payout

Dividends
Net income

57%

36%

21%

The dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividends during the year. Since investors want to see a
steady stream of sustainable dividends from a company, the dividend payout ratio
analysis is important. A consistent trend in this ratio is usually more important than a
high or low ratio. Regarding previous ratio analysis on Dividend Yield, PGN increase its
Payout percentage from 36% in year 2012 to become 57% in year 2013. It was caused
by gained dividend payment to shareholders in 2013 for 56% compare to year 2012
even though Net Income had depressed 2%. Again, we can say that the policy
depends on company and state own enterprise regulation to decide the dividend
distribution.

Page 32

FINANCIAL
ANALYSIS

SUMMARY
SUMMARY
Analysis of the company's financial performance appraisal using
Economic Value Edded (EVA).
PT Indofood Sukses
Makmur
Balance Sheet, Income Statement,
Shareholder Equity, and Cash Flows

Analysis Techniques

Page 33

Financial Ratio

EVA Method

The overall performance of Indofood in 2009 is higher than previous

year. Quick ratio and current assets of Indofood in 2008 to 2009 increased
respectively 0.28 and 0.164. This is due to the company's management
company is able to run optimally. as well as the company can pay off the
debt. Profitability Ratios of Indofood in 2009 is considered good while in
2008 less good because it tends to decrease. But overall profitability ratios
Indofood has a good performance since remained above the industry
average. For solvency ratio, the ratio of debt to assets of Indofood is
considered good because the ratio number is increasing throughout the
year and remained above the industry average. Total debt to equity in 2008
to 2009 is considered less good because it is above the industry average.
the company is still in health condition.
NOPAT
=
Income

Income Tax Exp

D
=
Total
Liabilities
/
Total
Liabilities and
Equity

Rd
=
Interest
Exp / Total
Liabilities

Tax
=
Income
Tax Exp /
EBIT

E
=
Total
Equity / Total
Liabilities and
Equity

Re = EAT /
Total Equity

2008

4.341.476.000
801.533.000
3.539.943.000

26.432.369.000 /
39.591.309.000
= 0.668

1.034.389.000 /
8.571.533.000 =
0.1206

5.004.209.000
1.207.032.000
3.797.177.000

24.886.781.000 /
40.382.953.000
= 0.617

801.553.000
/
2.599.823.0
00 = 0.3083
1.207.032.0
00
/
4.063.813.0
00 = 0.2970

8.571.533.000 /
39.591.309.000
= 0.2165

2009

1.157,562.00
0
/
26.432.369.0
00 = 0.0438
1.541.264.00
0
/
24.886.781.0
00 = 0.062

10.155.495.000 /
40.382.953.000
= 0.2514

2.075.861.000 /
10.155.495.000
= 0.2044

Table 1.1 Calculation

WACC = {(D * Rd) * (1-Tax) + (E * Re)}

2008
{(0.668*0.0438) * (1-0.3083) + (0.2165*0.1206)} = 0.0463
2009
{(0.617*0.062) * (1-0.2970) + (0.2514*0.2044)} = 0.0783
Table 1.2 WACC

EVA = NOPAT (WACC * Invested Capital)

3.539.943.000 (0.0643*(26.432.369.000+8.571.533.000
16.262.161.000)) = 2.334.849.054
2009
3.797.177.000 (0.0783*(24.886.781.000+10.155.495.000
11.158.962.000)) = 1.927.113.514
Table 1.3 EVA
2008

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Based on EVA calculation can be obtained from the information that

the company has economic value that can be quite good, it becomes a plus
for the company, not necessarily because companies with high profit have
economic added value that the company's goal less than the maximum.
EVA value tends to fluctuate due to a decline in 2009 (1,927,113,514).
EVA assist companies in calculating the economic added value, where
value added is aimed at stakeholders. With the added value, the company
can be categorized as a company that has a good reputation. This is
certainly going to be a supporting factor for the company to attract the
interest of stakeholders in investing. The challenge for companies is an
attempt what should be done so that the value of EVA increases every year.
So, in the measurement of financial performance should the company
not only berpatok on financial ratios but also calculating EVA for the
company to calculate the result of the cost of capital. With the economic
value-added companies, then shall the management company can improve
its performance in order to gain more profits without using more capital, can
be done by cutting the cost of the cost, working with production and
marketing costs are lower in order to obtain profit margins greater , This can
also be achieved by increasing asset turnover, either by increasing the
volume of sales or working with assets lower (lower assets). As well as by
encouraging the acquisition of return (return) is higher than the cost of
capital on new investments. It actually could be able to affect the
company's growth and EVA company did not decrease and tends to
fluctuate in the future.

Year

Indicator

2008 -ROE
-ROI
-Cash Ratio
-Current
Ratio
-Collecion
Period

Result

Interval

Score
Infra)

-12%
-2.6%
-88%
-26

12.5 > x 10
5 > ROI

-4.92

x 60

110 > CR
60 > x

(Non Weight
20
15
5
5
5
5
5

Page 35

-ITO
-98%
-TATO
-TMS : TA
Total Score
2009 -ROE
-20%
-ROI
-Cash Ratio 5.14%
-Current
Ratio
-Collecion
116%
Period
-23
-ITO
-TATO
-5.28
-TMS : TA
-92%
Total Score

90 < x 105

15 < ROE
5 < ROI

20
5

110
125
60 > x

< 4

x 60
90 < x 105

5
4

5
10
70
20
15
5
5
5
5
5
5
10
70

EXHIBIT

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