Analysis of Financial Performance and Economic Value Added in Coal Mining Companies in Indonesia (Case Study: PT Bukit Asam Tbk Compared to PT Adaro Energy Tbk from 2013 to 2017)

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Savitria, Riyazsa and Daryanto, Wiwiek Mardawiyah (2018) Analysis of Financial Performance and Economic Value Added in Coal Mining Companies in Indonesia (Case Study: PT Bukit Asam Tbk Compared to PT Adaro Energy Tbk from 2013 to 2017). South East Asia Journal of Contemporary Business, Economics and Law, 16 (1). pp. 93-102. ISSN 2289-1560

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Poor condition in global economy affects declining in Indonesia coal price since 2012. This condition rebound in 2017 which makes coal industry has a bright future. Many coal companies compete to each other to become a leader in coal sector. The competition clearly shown between PT Bukit Asam Tbk (PTBA) as a state-owned company in coal sector which has the largest coal reserves and PT Adaro Energy Tbk (ADRO) as a private company which has big capital. ADRO begin to beat PTBA through its vertical integration in the supply chain which succeeds to reduce its operating cost. Related to the competition among them, measurement formulated in Decree of Ministry of State Owned Company (BUMN) KEP MEN 100/MBU/2002 is used to measure the financial performances of these companies to get the best coal company. Eight financial ratios which cover profitability, liquidity, activity, and solvability used to calculate company’s health which results in three levels of financial health. To complete the assessment, analysis of Economic Value Added (EVA) is used to measure the value added produced by a company which concern to the invested capital and the risk. The result is PTBA can be categorized as a healthy company with level AAA from 2013 until 2017. In the other sides, ADRO also shows healthy condition although the level was less than PTBA, which got AA level from 2013 to 2017, except in 2015 the company only got level A which caused by a lower demand in an export market. Moreover, PTBA can provide EVA while ADRO cannot produce any EVA in those periods. Those assessments are important to choose who is the best between PTBA and ADRO, also to understand how well a business is performing, and which areas needing improvement. KEYWORDS: Financial Performance, Financial ratios, Economic Value Added, Coal Company, Healthy Company.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Research And Community Empowerment > Journals
Depositing User: Rizky Amalia
Date Deposited: 16 Jan 2020 04:24
Last Modified: 22 Dec 2021 04:56

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