Financial Performance Analysis and Evaluation of Pharmaceutical Companies in Indonesia

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Daryanto, Candraditia and Daryanto, Wiwiek Mardawiyah (2019) Financial Performance Analysis and Evaluation of Pharmaceutical Companies in Indonesia. International Journal of Innovation, Creativity and Change, 6 (3). pp. 207-224. ISSN 2201-1323

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The Government of Indonesia (GOI) started to implement the National Health Insurance or Jaminan Kesehatan Nasional (JKN) program on 1st January, 2014 through its Social Insurance Administration Body or BPJS Kesehatan. This program provides health care and social insurance, including monitoring and controlling the prescriptive drug and medicine costs in Indonesia by recommending the pharmaceutical companies to produce and sell generic drugs which have a relatively low price. Generic drugs are recommended as an alternative to the high price of medicines while ninety percent of the raw materials of drugs are still dependent on imports. The Decree No.KEP-100/MBU/2002 issued by Indonesia Ministry of State-Owned Enterprises (SOEs) on June 2002 provides the mandate of evaluating and rating the financial health of SOEs. This study aims to analyze and evaluate the financial health condition of two pharmaceutical SOEs; 1) Kimia Farma; 2) Bio Farma; and two private companies; 1) Kalbe Farma; 2) Darya Varia. The results of investigating the financial ratios: return on equity (ROE), return on investment (ROI), cash ratio, current ratio (CR), collection period (CP), inventory turnover (ITO), total asset turnover (TATO), total equity to total asset (TETA), are then validated by the decree to conclude the financial health condition of them. The data is collected from Audited Financial Reports for the period of 2010-2017. The results show financial health levels were achieved with rank ratings; 1. Kimia Farma; all AA levels; 2. Bio Farma (AAA for the first three years; and AA for the last five years); 3. Kalbe Farma (AAA for the first six years; and AA for the last two years); and 4. Darya Varia; all AA levels. Key words: Financial health condition, financial ratios, SOEs, BPJS.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Research And Community Empowerment > Journals
Depositing User: Rizky Amalia
Date Deposited: 27 Jan 2020 04:31
Last Modified: 19 Feb 2021 05:24

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