Jonathan Somba29114307

EVA ANALYSIS OF

PERHITUNGAN WACC (untuk 2013)Item Book Value % to MV Cost of Cap After tax CofC Cont. to WACC

Short Term Debt 1,138,147.00 47.831% 13.000% 9.100% 4.353%Long Term Debt 189,304.00 7.956% 14.500% 10.150% 0.807%

Sew a Guna Usaha 1.26 Equity 1,052,053.00 44.213% 20.706% 20.706% 9.155%

WACC 14.31%Ke = 20.71%

PERHITUNGAN WACC (untuk 2014)Item Book Value % to MV Cost of Cap After tax CofC Cont. to WACC

Short Term Debt 1,413,295.00 54.390% 13.000% 9.100% 4.950%Long Term Debt 293,260.00 11.286% 14.000% 9.800% 1.106%

Sew a Guna Usaha 1.91 Equity 891,868.00 37.481% 25.428% 25.428% 9.531%

WACC 15.59%Ke = 25.43%

In short, EVA is calculated in the following formula:

NOPAT (Net Operating Profit After Taxes )−(Capital xCost of Capital)

While cost of capital is consist of:

Cost of Capital=Cost of Equity x Proportion Equity ¿Capital+Cost of Debt x Proportion of debt ¿capital x (1−tax rate)

EVA is a performance metric that calculates the creation of shareholder value, but it distinguishes itself from traditional financial performance metrics such as net profit and earnings per share (EPS). EVA is the calculation of what profits remain after the costs of a company's capital - both debt and equity - are deducted from operating profit. The idea is simple but rigorous: true profit should account for the cost of capital.

Jonathan Somba29114307

Item 2013 2014 PERHITUNGAN EVAWorking Capital Requirement Item 2013 2014+Inventory 519,086 480,871 NOPAT+Receivables 333,159 248,826 Operating profit (1,067) (70,444)+Operating Cash (assumed 30% of Cash B/S) 138,875 (2,298) Interest income 6,294 4,886+Prepaid Expenses 0 0 - income tax (1,147) (25,961)-Account Payable (179,899) (202,883) - tax shield on interest (11,153) (16,124) -Accrued Expenses 24200 33809 NOPAT (7,073) (107,643)-Advances from Customers 31,175 23,306 - Hutang Jangka Panjang Jatuh Tempo (67,296) -55417 Capital chargesTotal Working Capital Requirement 811,221 524,516 Inv.capital end of year 2,095,506 2,064,316

(286,705) Inv.capital beginning of year 5,553,937 2,095,506 Net WCR / Sales 5.8% 3.4% Inv.capital (average) 3,824,722 2,079,911

Capital charges 547,502 324,181Excess Cash+Cash on B/S 190,232 236,689 EVA (554,575) (431,824) -Operating Cash 138,875 (2,298) Terminal value EVAExcess Cash 51,357 238,987

PERHITUNGAN MARKET VALUETotal Working Capital Requirement 811,221 524,516 ROIC 21.70% 32.68%Fixed Assets 1,205,615 1,447,728 WACC 10.22% 11.68%Other Fixed Assets 78,670 92,072 Spread 11.48% 21.00%Total Invested Capital 2,095,506 2,064,316Pertumbuhan fixed asset -62.27% -1.49% Invested CapitalDepreciation 622,026 690,710 PV of EVA (280,632) (178,445)

Capital Expenditure Total PV EVATotal DebtMarket value equity PT. KS20% equityPBV

The positive number tells us that Krakatau Steel more than covered its cost of capital. A negative number indicates that the project did not make enough profit to cover the cost of doing business. From the calculation, the PV EVA are both negative in 2013 and 2014 which means there wasn’t enough profit to cover the cost of doing business. Deriving from the excel calculation, Krakatau Steel Income was already negative. Moreover, the Capital charges were so large that may lead to more negative in the EVA. Krakatau Steel need to increase the income and the best thing to do is to reduce the cost and reduce capital. Efficiency and cost reduction will gain more EVA in the future.