MM 5007

FINANCIAL MANAGEMENT

KRAKATAU STEEL CASE

SYNDICATE 3

KRISTIANTO WICAKSANA (29114305)

JONATHAN SOMBA (29114307)

FLORENTINA ANDRE (29114312)

RATNA SARI RADITHA NING TYAS (29114357)

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND MANAGEMENT

INSTITUT TEKNOLOGI BANDUNG

2015

EXECUTIVE SUMMARY

Short brief of project

I. Objective

Bambang Supriyatno wants to invest in Krakatau Steel group. Before he put his money on Krakatau Steel group, he needs to check the financial ratios and also the BUMN scoring. These assessments are needed to determine whether PT Krakatau Steel is a good place to invest.

II. Analysis

Bambang Supriyatno use several ratios to compare Krakatau Steel financial performance to other

similar industry. The indicators that have been use to compare are shown below

After analyzing these indicators, Bambang Supriyatno used the BUMN Scoring. The BUMN Scoring is

described in several figures below

The scoring result of Krakatau Steel is shown below

In M

illio

n20

0920

1020

0920

1020

0920

10Ca

sh1,

759,

964

4,

193,

598

40,2

34,4

02

3,72

0,87

5

1,42

9,77

1

12,5

52,3

13

Ac

coun

t Rec

eiva

bles

1,64

2,21

2

1,18

4,33

8

19

6,96

2,76

0

89

,918

,674

12

7,94

7,06

9

93,6

13,4

70

N

et R

even

ues

16,9

13,5

35

14

,856

,156

1,

641,

555,

178

1,

710,

131,

747

30

2,86

8,41

6

427,

792,

535

Co

st O

f Goo

ds S

old

15,7

28,1

46

12

,621

,376

1,

829,

359

1,

413,

250

26

7,45

9,90

7

372,

059,

150

Gr

oss P

rofit

1,18

5,38

9

2,23

4,78

0

(1

87,8

09,1

24)

296,

880,

791

35,4

08,5

08

55

,733

,384

Tota

l Ope

ratin

g Ex

pens

es1,

159,

449

1,

241,

851

85,6

22,0

86

90,7

56,8

76

15,1

03,2

28

17

,313

,898

Inco

me

From

Ope

ratio

n25

,940

99

2,92

9

(273

,431

,210

)

20

6,12

3,91

5

20

,305

,280

38,4

19,4

85

O

ther

Inco

me

442,

719

384,

219

64

,196

,140

8,

525,

507

(1

7,57

4,94

2)

25

1,31

6

N

et In

com

e49

4,67

2

1,

062,

683

150,

055,

121

171,

427,

614

1,91

7,37

7

28,4

45,5

80

Ea

rnin

gs P

er S

hare

39

81

(2

6)

21

2.

6

37

.93

Curr

ent A

sset

8,63

1,16

2

12,2

87,7

24

541,

001,

941

709,

597,

600

217,

575,

710

28

5,52

4,08

9

Net

Fix

ed A

sset

3,37

8,92

8

4,38

9,32

0

25

5,83

6,74

5

24

6,46

9,27

5

19

,191

,931

17,6

18,8

52

Cu

rren

t Lia

bilit

y6,

130,

353

6,

930,

713

488,

515,

367

419,

815,

817

75,7

23,7

07

10

3,14

0,87

2

Inve

ntor

y4,

871,

981

6,

549,

776

234,

313,

675

556,

893,

664

78,9

38,6

47

11

6,70

9,94

2

Tota

l Ass

et12

,795

,803

17,5

84,0

59

970,

737,

084

1,07

4,56

9,61

2

353,

951,

009

41

1,28

1,59

8

Tota

l Lia

bilit

es6,

949,

013

8,

158,

514

496,

451,

412

428,

856,

325

82,2

62,3

29

11

1,14

7,33

8

Com

mon

Sto

ck E

quity

2,00

0,00

0

7,88

7,50

0

82

0,00

0,00

0

82

0,00

0,00

0

75

,000

,000

75,0

00,0

00

To

tal E

quity

12,7

95,8

03

9,

293,

915

645,

713,

287

474,

285,

672

271,

688,

680

30

0,13

4,26

0

Krak

atau

Ste

elPT

Gun

awan

Dia

njay

a St

eel

PT Ja

ya P

ari S

teel

REVE

NU

ECA

GRCA

GRCA

GRG

ross

Pro

fit m

argi

n7.

01%

15.0

4%46

.50%

-11.

44%

17.3

6%#N

UM!

11.6

9%13

.03%

5.56

%O

per

atin

g Pro

fit M

argi

n0.

15%

6.68

%56

0.14

%-1

6.66

%12

.05%

#NUM

!6.

70%

8.98

%15

.74%

Net

Pro

fit M

argi

n2.

92%

7.15

%56

.39%

9.14

%10

.02%

4.72

%0.

63%

6.65

%22

4.09

%C

OG

S to

Rev

enue

92.9

9%84

.96%

-4.4

2%0.

11%

0.08

%-1

3.89

%88

.31%

86.9

7%-0

.76%

Oper

atin

g Exp

ense

s to

Rev

enue

6.86

%8.

36%

10.4

3%5.

22%

5.31

%0.

87%

4.99

%4.

05%

-9.9

1%MARKET

Earn

ings

per

shar

e39

81

(26)

21

2.6

37.9

3

Book

val

ue p

er sh

are

500

500

100

100

100

100

RETU

RNR

eturn

on A

sset

s3.

87%

6.04

%25

.03%

15.4

6%15

.95%

1.59

%0.

54%

6.92

%25

7.32

%R

eturn

on E

quity

24.7

3%13

.47%

-26.

19%

18.3

0%20

.91%

6.88

%2.

56%

37.9

3%28

5.17

%R

eturn

on Inve

stm

ent

0.28

%7.

53%

422.

67%

-38.

25%

24.8

9%#N

UM!

6.07

%9.

76%

26.8

5%DE

BTD

ebt to

Equ

ity

54.3

1%87

.78%

27.1

4%76

.88%

90.4

2%8.

45%

30.2

8%37

.03%

10.5

9%D

ebt to

Cap

ital

347.

45%

103.

44%

-45.

44%

60.5

4%52

.30%

-7.0

6%10

9.68

%14

8.20

%16

.24%

LIQ

UID

ITY

Curr

ent R

atio

140.

79%

177.

29%

12.2

2%11

0.74

%16

9.03

%23

.54%

287.

33%

276.

83%

-1.8

4%Q

uic

k R

atio

61.3

2%82

.79%

16.1

9%62

.78%

36.3

7%-2

3.88

%18

3.08

%16

3.67

%-5

.45%

Cas

h R

atio

28.7

1%60

.51%

45.1

8%8.

24%

0.89

%-6

7.20

%1.

89%

12.1

7%15

3.88

%C

olle

ctio

n P

erio

d35

.429

.1-9

.39%

43.8

19.2

-33.

80%

154.

279

.9-2

8.03

%In

vento

ry T

urn

over

105.

1416

0.92

23.7

2%52

.10

118.

8651

.04%

95.1

399

.58

2.31

%Tot

al A

sset

Turn

over

1.32

0.84

-20.

05%

1.69

1.59

-2.9

9%0.

861.

0410

.25%

Tot

al E

quity

/ T

otal

Ass

et1

0.53

-27.

30%

0.67

0.44

-18.

54%

0.77

0.73

-2.5

0%BU

MN

SCO

RIN

G P

T KR

AKAT

AU S

TEEL

RO

E20

1820

205.

520

RO

I2

60

155

7.5

Cas

h R

atio

45

10

02

Curr

ent R

atio

55

45

55

Col

lect

ion P

erio

d5

55

53

4.5

Inve

nto

ry T

urn

over

43

54

44

Tot

al E

quity

/ T

otal

Ass

et4

44

44

4Tot

al A

sset

Turn

over

1.5

1.5

1.5

1.5

1.5

1.5

Tot

al45

.547

.540

.554

.528

48.5

SCO

RIN

GA

ABB

BA

BA

Krakatau Steel Gross Profit, Operating Profit Margin, and also Net Profit Margin are

increasing. Meanwhile, the Inventory Turnover is much greater than the competitor and also

The Total Asset Turnover is also declining. Based on these conditions, the Krakatau Steel is in

a good shape.

III. Conclusion and Recommendation

3.1 Conclusion

From those Krakatau Steel conditions above, we can see that the Krakatau Steel is a good

place to invest. On paper, The Krakatau Steel’s profitability ratio is quite good but compared

to other steel industry, the Krakatau Steel’s number is much below to its competitors.

Moreover, we can see that The Krakatau Steel BUMN Scoring is at level A which is indicated

as a healthy company.

3.2 Recommendation :

Bambang Supriyatno should invest to Krakatau Steel as their score is better than the other

Industries. As we can see, year 2009 and 2010, Krakatau Steel has grade A.