UNAIR’S FS ANALYSIS

FINANCIAL STATEMENT ANALYSIS

BY GROUP 1, MEMBERS:

Muhammad Rizki (2101103010055)

Muhammad Syuja’ (2101103010)
Nyak Shafika Ray (2101103010152)
Syifa’ Maulana (2101103010090)

INTERNATIONAL ACCOUNTING PROGRAM

FACULTY OF ECONOMY AND BUSINESS
SYIAH KUALA UNIVERSITY
DARUSSALAM 2023
Contents:
I. INTRODUCTION............................................................................................................................3
1). Background.................................................................................................................................3
2). The Main Purpose of Financial Statement Analysis Preparation.................................................3
II. RATIOS AND RECOMENDATIONS..........................................................................................4
1). Ratios..........................................................................................................................................4
2). Recomendations...........................................................................................................................5
III. ISSUES IN AIRLANGGA UNIVERSITY..................................................................................6
I. INTRODUCTION
1). Background
The higher education system in Indonesia is regulated by law Number 12 of 2012.
Law Number 12 of 2012 article 65. Explains that financial management of state universities
divided into 3 (three) forms of fund management, namely: 1). PTN-Satker (PTN Satuan Kerja
Kementrian), 2). PTB-BLU and 3). PTN-BH. College a legal entity state university,
abbreviated as PTN-BH is a tertiary institution a country founded by a government with the
status of a legal entity autonomous public.
The autonomy referred in the law includes academic and non-academic fields. In the
academic field, it includes operational policies and implementation of the Tridharma of
higher education, while the non-academic field includes establishing norms, finance, student
affairs, human resources, operational policies and infrastructure. The implementation of this
law in Indonesia has become the basis for universities to compete in facing the impact of
globalization in all fields. Organizational activities are motivated by the necessity of
legitimacy-seeking behaviour, which in turn is influenced by socially constructed norms. For
organizations to survive, they must interact with their environment in ways that are deemed
acceptable by their various constituents in that environment. This presupposes some
collective understanding of what constitutes appropriate behaviour (Dillard, Rigsby and
Goodman,2004)
Government Regulation Number 26 of 2015 Article 20 states that the financial report
of the PTN-BH is prepared based on accounting principles in accordance with financial
accounting standards determined by the Indonesian Accountants Association. Based on
provisions accordingly, PTN-BH has the authority to determine internal references financial
management. Preparation of College financial reports State Higher Education Legal Entities
(PTN-BH) are required to include a position report financial (initial balance sheet and
amendments), activity reports, flow reports cash and notes to financial statements.

2). The Main Purpose of Financial Statement Analysis Preparation

Financial statement analysis is the process of analysing a company's financial
statements for decision-making purposes. External stakeholders use it to understand
the overall health of an organization and to evaluate financial performance and
business value.
The balance sheet, income statement, and cash flow statement each offer
unique details with information that is all interconnected. Together the three
statements give a comprehensive portrayal of the company's operating activities.
II. RATIOS AND RECOMENDATIONS
1). Ratios
2020
Rp 0,17828316
roa 548.066.016.231 = 5 18%
Rp
3.074.132.190.367

Rp 0,18633338
roe 548.066.016.231 = 6 19%
Rp
2.941.319.467.020

Rp 5,24934868
current ratio 694.323.847.431 = 7 525%
Rp
132.268.570.602

2021
Rp 0,12193011
roa 423.946.829.696 = 8 12%
Rp
3.476.965.640.600

Rp 0,12599840
roe 423.946.829.696 = 8 13%
Rp
3.364.699.896.370

Rp 8,81496334
current ratio 947.636.508.023 = 6 881%
Rp
107.503.170.552

2022
Rp 0,00536225
roa 18.898.474.916 = 2 1%
Rp
3.524.354.265.472

Rp 0,00558483
roe 18.898.474.916 = 7 1%
Rp
 3.383.889.983.714

Rp 7,08907608
current ratio 963.885.675.095 = 4 709%
Rp
135.967.743.003

2). Recomendations
Interpretation of Financial Ratios
1. Return on Assets (ROA):
 In 2020, the ROA was 18%, indicating efficient use of assets to generate profits.

 In 2021, the ROA declined to 12%, suggesting a decrease in profitability relative to

assets.

 In 2022, the ROA further dropped to 1%, indicating a significant decline in

profitability.

2. Return on Equity (ROE):

 In 2020, the ROE was 19%, showing efficient use of shareholder equity to generate
profits.

 In 2021, the ROE decreased slightly to 13%, but still remained above the average
ROE for the industry.

 In 2022, the ROE plummeted to 1%, mirroring the decline in profitability.

3. Current Ratio:
 In 2020, the current ratio was 525%, indicating a very healthy level of liquidity. The
company had significantly more current assets than current liabilities, suggesting a
low risk of default.

 In 2021, the current ratio increased further to 881%, indicating an even stronger
liquidity position.

 In 2022, the current ratio remained high at 709%. While this is still above the average
for the industry, the decrease from the previous years suggests a slight decline in
liquidity.

Recommendations

Based on the analysis of the financial ratios, the following recommendations can be
made:
1. Address the decline in profitability:
 Investigate the reasons behind the sharp decline in profitability from 2020 to 2022.
This could be due to various factors such as increased competition, declining sales,
or operational inefficiencies.

 Implement corrective actions to improve profitability, such as cost reduction

initiatives, product/service innovation, or market expansion strategies.

2. Monitor and manage liquidity:

 While the company currently maintains a high level of liquidity, it is important to
monitor this ratio closely as it has decreased slightly from 2021.

 Implement strategies to maintain sufficient liquidity, such as managing inventory

levels, optimizing working capital, and securing additional financing.

3. Improve financial reporting:

 Consider disclosing more detailed information in the financial statements to provide a
clearer picture of the company's financial performance and position.

 This could include segment-specific data, operational metrics, and comprehensive

risk assessments.

4. Seek professional advice:

 Consider seeking professional advice from financial analysts or consultants to gain
deeper insights into the company's financial performance and develop a more
comprehensive strategic plan for future growth and profitability.

Additional Recommendations:
 Invest in research and development: This could help the company stay ahead of the
competition and develop innovative products or services that improve profitability.
 Improve operational efficiency: This could involve streamlining processes, reducing
waste, and leveraging technology to enhance productivity.
 Diversify revenue streams: This could help mitigate risk and reduce dependence on
any one market or product.
 Focus on customer satisfaction: Building strong customer relationships and providing
excellent service can encourage customer loyalty and repeat business.

It is important to note that these recommendations are based on limited information

and further analysis may be required to develop a comprehensive and tailored plan
for improvement.
III. ISSUES IN AIRLANGGA UNIVERSITY

1. Higher Entry Fees

The financial challenges posed by high entry fees is crucial to ensuring equitable
access to higher education for all students. Entry fees present a significant obstacle in the
financial framework of colleges, impeding the educational aspirations of certain students. The
disparity in entry fees, ranging from nominal to substantial amounts, creates financial
hardship for specific students and their families.
The criticism surrounding high entry fees underscores universities' need to give more
attention to refining their policies. This critique emphasizes the necessity for transparent and
inclusive policies to ensure equal opportunities. The imposition of short repayment terms
places additional stress on students, particularly those with limited financial resources.
One of solution involves allowing students a more extended period before initiating
loan repayments. This approach aims to alleviate financial burdens for students experiencing
difficulties meeting their financial obligations. In this context, addressing the criticism of
entry fees becomes paramount in establishing more comprehensive and inclusive policies.
Enhancing the effectiveness of payment and financial aid systems is a tangible step
toward creating a higher education environment that is more affordable and sustainable. By
addressing the financial challenges associated with entry fees, the higher education financing
system can evolve to support universal access without compromising the quality of
education.
2. Construction of Syariah Tower at Universitas Airlangga

The development of Syariah Tower at Universitas Airlangga (UNAIR) encounters

formidable challenges associated with funding and project timelines. Initially slated for
financing through the State Budget (APBN), the project has pivoted towards utilizing
UNAIR's private funding sources. This transition signifies not only a strategic financial
adjustment but also underscores the intricacies of project management.

Commencing in 2019, the construction progress has been notably concentrated on

floors 1 to 3, with ongoing work on floors 4 and 5. The ambitious deadline of December 31,
2023, amplifies the intricacies tied to modifying funding sources and adapting the
construction schedule, requiring adept resource management, and scheduling.

The redevelopment of Syariah Tower serves as a testament not merely to a physical

metamorphosis but also to UNAIR's adeptness in surmounting financial and technical
intricacies. UNAIR shoulders the responsibility of upholding construction standards while
ensuring the project's sustainability, with an envisioned operational status by mid-2021. In
essence, the construction of UNAIR's Syariah Tower underscores the university's capacity
to navigate evolving dynamics and triumph over challenges inherent in the realization of
this ambitious undertaking.
3. Plaza Airlangga Development

The University of Airlangga (UNAIR) is actively engaged in the Plaza Airlangga

Development initiative, designed to establish a multifunctional space accommodating
diverse needs such as office facilities, business centers, and healthcare services.
Commencing on September 15, 2023, and slated for completion by December 31, 2023, this
project anticipates yielding positive impacts across various sectors.

Encompassing a building area of 5,530 m2 and spanning five floors, Plaza Airlangga
exemplifies UNAIR's unwavering commitment. This commitment extends beyond
providing internal campus facilities, aiming to create a central hub for government,
academia, alumni, private enterprises, community, and media. With a designated budget of
Rp38.9 billion, the initiative aspires to evolve into a functional establishment contributing
not only to the UNAIR Academic Community but also fostering the broader welfare of the
East Java community.