Name :

Alifya Nabila Rusman – 2301937034

Edenia Ivasya Narang – 2301927166

Leonardus Revel Darmadi - 2301956323

Skelyn Yolanda Atikasari – 2301943680

FINANCIAL MANAGEMENT

Introduction

State-Owned Enterprises (BUMN) as an Indonesian government-owned company was

established with two main objectives, namely economic goals and social goals. The objective of
BUMN which is economic in nature is to manage strategic business sectors so that they are not
controlled by certain parties. Business fields related to the livelihoods of many people, such as
electricity, oil and gas companies, as mandated in Article 33 of the 1945 Constitution, should be
controlled by BUMN. Job creation is achieved through the recruitment of workers by BUMN. Efforts
to revive the local economy can be achieved by involving the community as partners in supporting
the smooth process of business activities. Currently, there are 139 companies in Indonesia that are
members of BUMN. The company which is classified into BUMN is then divided into 13 sectors. The
existence of BUMN in Indonesia as an instrument of government in development has a very
important role, not only by the government, but also by the wider community. From the
government side, BUMN is often used as an important instrument in economic development,
especially development in strategic industries such as telecommunications, transportation,
manufacturing industries and so on. Meanwhile, from the community side, BUMN is an important
instrument as a service provider that is fast, cheap and efficient. One of them is the construction
industry which plays an important role in BUMN

The construction industry is one of the most competitive industries in the world. Since the
conventional way to get more jobs is bidding, many construction companies see lowering prices as
the only way to win more contracts. Unfortunately, this type of strategy is a very disadvantageous
situation for both the contractor and the client. PT.Waskita Karya (Persero) Tbk originally came from
a Dutch company called "Volker Maatschappij NV Aannemings" which was later taken over based on
Government Decree No.62 / 1961. PT.Waskita Karya (Pesero) Tbk has a legal status of being a
"company" since 1973 which initially participated in water related developments including
reclamation, port dredging, irrigation and began to develop into a broader general contractor in
construction activities including roads, bridgeS , ports, airports, buildings, sewage plants, cement
plants, factories and other industrial facilities. According to the President Director of PT. Waskita
Karya, Muhammad Choiq, as reported by the Business Industry (February, 2018) stated that the
value of the projects undertaken by PT. Waskita Karya (Persero) Tbk increased significantly in the
2014-2018 period. Therefore, the authors make PT. Waskita Karya (Persero) Tbk as one of the
companies engaged in construction which is listed on the Indonesia Stock Exchange for research on
how the company's financial performance should be, the more or bigger the project received, the
more it provides the best performance as well. Based on the descriptions of the problems above,
this research was conducted to find out more about the financial performance of PT. Waskita Karya
(Persero) Tbk in the 2015-2017 period of the latest accounting year that has been audited and
published by the company.

Method

Measuring the company's potential ability to generate profits using profitability ratios can be used
several ratios that become tools for analyzing and interpreting the data. In order to measure the
company's operating performance ratio, such as measuring the level of earning income, getting
profit and the company's efficiency, it can be measured through profitability ratios, namely Return
On Equity (ROE). Return on Equity (ROE) is a ratio that measures net profit after tax or Earning After
Interest and Tax (EAIT) with its own capital. Through this ratio, it is able to show the efficiency of
using one's own capital.

Analyze
We analyzed the Waskita Karya (Persero) Tbk company report obtained from idx.co.id for 5
years, from 2014 to 2018.

Referring to the results of the calculation of financial ratios, through the analysis, the author
will show that:

a. In 2014, with a capital investment by the shareholders of Rp. 1, it was able to provide a net
profit of Rp. 0.1759.
b. In 2015, with a capital investment by the shareholders of Rp. 1, it was able to provide a net
profit of Rp. 0,1080
c. In 2016, with a capital investment by the shareholders of Rp. 1, it was able to provide a net
profit of Rp. 0.1081
d. In 2017, with a capital investment by the shareholders of Rp. 1, it was able to provide a net
profit of Rp. 0.1846
e. In 2018 with a capital investment of Rp. 1 shareholder, it can provide a net profit of
Rp. 0.1664

In 2014 amounted to 17.59%, 2015 amounted to 10.80%, 2016 amounted to 10.81%,

2017 amounted to 18.46%, and 2018 amounted to 16.64% . During the last 5 years, the
largest ROE was achieved in 2017, namely 18.64%, wherein the previous year ROE was
10.81%. This shows a sharp increase in ROE from 2016 to 2017. However, PT Waskita
Raya's Return of Equity in 2018 was 16.64, experiencing a decrease of -1.82%. Overall,
the group assessed that Waskita Karya's ROE was not very stable because it had
decreased in 2016 by -6.79% from the previous year. After that, it has increased so
rapidly in 2017 and again has decreased in 2018. The decline in 2018 occurred due to the
increase in total equity from year to year, not followed by the same comparison of net profit
after tax, which from year to year still fluctuates up and down. The ROE percentage ratio value
almost every year is above the industry standard average of 8.32%, the highest ratio is 17.59% in
2014. However, in 2018 the position of the ratio value decreased to 16.64% causing the position
to be below average. - industry standard average.

At this ratio, the company has fluctuations down and up, this indicates that the financial
performance of PT Waskita Karya (Persero) Tbk is still experiencing fluctuations in the efficiency
of the use of the company's own capital. This happens because the total equity increases from
year to year but is not followed by the same comparison of net profit after tax which from year
 to year fluctuates and increases in value during the 2014 - 2018 period. The financial
performance of this ROE percentage ratio almost every year is above the industry standard
average of 8.32%, the highest ratio is 18.46% in 2017. However in 2018 the position of the ratio
value decreased to 16.64% causing the position to be below industry standard average.

PART 2

The table below represents the 5 years (2015-2019) Du Point analysis obtained from the
Wall Street Journal website www.wsj.com.

  2019 2018 2017 2016 2015

8,561,016 8,763,909 5,760,143 2,755,876 1,564,423
Retained Earnings
938,142 3,962,838 3,881,712 1,713,261 1,047,738
Net Income
17,882,408 18,001,116 14,006,438 11,069,553 9,547,095
Common Equity
1,357,390 1,357,390 1,357,390 1,357,365 1,357,249
Common Stock
5,552,026 5,552,026 5,467,018 5,882,677 5,881,546
Capital Surplus

Based on the table above, it can be seen that Waskita Karya's retained earnings have
increased rapidly from 2015 to 2019, amounting to 447%. However, the net income in the
last year of 2019 has decreased from the previous year 2018 by -76%. This was followed by
a decrease in common equity in 2019 which decreased from the previous year 2018 by -1%.
Common stock and capital surpluses in 2018 and 2019 tend to be stable. Overall, the
common stock has increased from year to year. On common equity, it can be seen that in
2019 it has increased by 87% from the previous 5 years. However, the largest capital surplus
was achieved in 2016.

Recommendation

Based on the conclusions of the research results, the authors can submit the following
suggestions: BUMN in the construction sector should be able to maintain financial performance for
the coming years, because based on the results of the analysis of financial performance has a better
performance compared to the state-owned banking sector Turnover of working capital has a positive
and insignificant effect on profitability at PT Waskita Karya (Persero) Tbk. This means that there is a
unidirectional influence between working capital turnover and profitability, where if there is a
change in working capital turnover, the profitability will also experience the same change, but the
changes are not very meaningful. In addition, we can provide some recommendations to increase
the profitability ratio. Equity ”from the company PT. Waskita Karya

1. Avoid falling prices in order to remain competitive

Construction companies should focus on getting quality projects that take advantage
of their expertise. Think about the strengths of the companies you specialize in. It's
better to get fewer jobs but with higher margins than more work but with paper-thin
margins that risk turning into losses.
2. Minimizing errors that have the potential to repeat work
Rework is one of the more expensive problems that can occur with a contractor. This
not only affects the company's profit from a project but damages reputation as well
as affects future profits.
3. Address existing payment problems and prioritize on time payments
Knowing how to protect rights by sending advance notice of a project will help
increase the chances of getting paid on time.
4. Innovating through new technology
There are lots of time-consuming processes behind the scenes that would benefit
from automation. These processes have a huge impact on your margins and
profitability and taking advantage of new technologies to make these processes
efficient, you can do more work that actually makes money.
5. Take advantage of digitalization in today's digital era.
Digitalization in Construction, Digitalization Adoption Steps and Strategies. The
construction industry is changing rapidly thanks to the advent of digital solutions.
The data-driven construction process is now seen as a significant competitive
advantage for all stakeholders in the sector.

References

https://www.idx.co.id/Portals/0/StaticData/ListedCompanies/PerformanceSummary/WSKT.
pdf

https://www.wsj.com/market-data/quotes/ID/WSKT/financials/annual/balance-sheet