ANALYSIS OF FINANCIAL PERFORMANCE OF PT ADARO ENERGY TBK

(2017-2021)
Gemilang Ramadhan Santoso
Business Administration, IPMI International Business School
NIM: 22231008
Email: [email protected]

ABSTRACT
This study aims to analyze and evaluate the company's financial performance
through financial ratios at PT. Adaro Energy Tbk. 2017-2021 period. Using
secondary data in the form of financial reports and annual reports at PT. Adaro
Energy Tbk for the 2016-2020 period published by the Indonesia Stock Exchange.
Data collection techniques using the method of documentation. In making
comparisons known as financial ratio analysis. The financial ratios used are
profitability ratios and liquidity ratios. The results of these financial ratios
will show the health condition of the company in question and are used to assess
management's performance in a period whether it has achieved the targets as a
set and assesses management's ability to effectively empower company
resources.
Keywords:
Profitability Ratio, Liquidity Ratio, Solvency Ratio, Financial Statements

1. INTRODUCTION

In the implementation of the decision-making process management which

forms the basis of the most important considerations is obtained from financial
data information, especially on the results of financial reports. Financial
reports provide financial data information for each report user.

Because of its enormous utilization value for its users, it is important to

understand the meaning of the financial statements themselves. The financial
statements present the company's revenues, operating expenses and net
profit for a certain accounting period. Typically the accounting period is
January 1 (beginning of the period) to December 31 (end of the accounting
period).

The company's financial statements also have a very important function in the
capital market, where the financial statements are information that can
describe the company's performance. In addition, financial reports always
report company activities in a certain period. Activities that have been carried
out are stated in currency values, both in rupiah and foreign currencies.

PT Adaro Energy Tbk (ADRO) is engaged in integrated coal mining based in

Indonesia. ADRO operates in the coal mining sector as well as trade and other
services related to the mine such as coal infrastructure and logistics. On the
main board at IDX, ADRO was listed on July 16 2008. ADRO was originally
formed on July 28 2004, the name used was PT. Padang Kurnia then on April 18
2008, there was a change of name to PT. Adaro Energy Tbk.

As a top mining company in Indonesia, of course, a review of PT. Adaro Energy

Tbk can be used as an object of analysis of interesting financial statement
ratios in order to find information that can be useful both for the company's
internal and external parties.

This study assessed the financial performance through financial ratios.

Financial ratio is very useful to measure the business performance and it can
be used to predict the failure. Other researcher concludes that there is a
positive link between undertaking management practices and financial
performance

2. RESEARCH METHOD
Financial Ratios
Analyzing financial data needs to be a certain size and one of the most
commonly used measure is the financial ratios. Financial ratios can be
calculated from the contents of the financial information in the financial
statements that show the strength of the company.
The financial ratio is an analysis tool that is used to compare the figures
contained in the financial statements by dividing one number by another
number. In general, financial ratios are most often used is the ratio of liquidity,
solvency ratios, activity ratios and profitability ratios.
According to Kasmir (2016), the types of financial ratios, namely:
• Liquidity ratios
1) Current Ratio
Is a ratio to measure a company's ability to pay short-term obligations or
any immediately due upon being billed as a whole. In other words, how
many assets are available to cover short-term liabilities that is due soon.
However, as a general guideline, the level of the current ratio of 2.00
is considered acceptable.
Current Ratio = Current Assets / Current Liabilities
2) Quick Ratio
Is a ratio that measures the company's ability to meet or pay liabilities or
current liabilities with current assets without taking into account the
value of inventory. However, as a general guideline, the level of the
current ratio of 1.5 is considered acceptable.
Quick Ratio = (Current Assets-Inventory) / Current Liabilities
3) Ratio Cash
Is a tool used to measure how much cash is available to repay debt?
Availability of cash can be shown on the availability of cash or cash
equivalents as current accounts or savings in the bank (which can be
withdrawn at any time). However, as a general guideline, the level of
the current ratio of 0.5 is considered acceptable.
Cash Ratio = Cash or Cash Equivalents / Current Liabilities
• Solvency ratios
1) Debt to Equity Ratio (DER)
Is a ratio used to assess the debt for equity. This ratio is calculated by
comparing the entire debt including current debts with the rest of the
equity. This ratio is useful to know the amount of funds provided the
borrower with the owner of the company.
Debt to Equity Ratio = Total Debt / Equity
2) Debt to Assets Ratio (DAR)
This ratio is the ratio of debt used to measure the ratio between total
debts by total assets. In other words, how much of the company's assets
is financed by debt or how debt affects the asset management company.
Debt to Asset Ratio = Total Debt / Total Assets
• Profitability ratios
1) Net Profit Margin (NPM)
 Is a ratio used to measure the benefit by comparing the profit after
interest and taxes compared with sales.
Net Profit Margin = Earning After Interest and Tax / Sales
2) Return on Equity (ROE)
Is a ratio which indicates the efficiency of use of capital own. The higher
this ratio, the better. That is the position of the owner of the company is
getting stronger, and vice versa.
Return on Equity (ROE) = Earning After Interest and Tax / Equity
3) Return on Investment (ROI)
Is a ratio that shows the results (return) on the amount of assets used in
the company. The result of investment returns showed the productivity
of the entire fund companies, both equity and loan capital.
Return on Investment (ROI) = Earning After Interest and Tax / Total
Assets

3. ANALYSIST
Balance Sheet
Fiscal year is
January-
December. All 2021 2020 2019 2018 2017
values IDR
Millions.
Cash & Short
Term
29.634.482 18.755.247 21.968.806 14.625.539 19.770.412
Investments
Total Current
Assets 41.083.045 24.447.000 29.291.020 23.012.228 26,852,280
Total Assets
108.132.805 89.661.002 100.191.460 101.533.657 92.450.939
Total Current
Liabilities 19.405.605 16.086.168 17.111.583 11.740.450 11.071.229
Total
Liabilities 44.590.671 34.139.421 44.891.979 39.660.946 36.937.790
Common
Equity (Total) 58.959.457 52.154.724 51.782.725 52.492.738 47.055.753
Total Equity
63.542.135 55.521.582 55.299.481 61.872.711 55.513.149
Liabilities &
Shareholders'
108.132.805 89.661.002 100.191.460 101.533.657 924.509
Equity

Income Statement
Fiscal year is
January-December. 2021 2020 2019 2018 2017
 All values IDR
Millions.

Revenue
57.075.411 36.860.899 48.889.732 51.533.602 43.602.337
COGS 32,046,897 28,565,400 35,448,879 34,384,104 28,376,614
Gross Income 25,028,513 8,295,499 13,440,853 17,149,498 15,225,724
EBIT 22,538,374 5,957,965 10,248,412 14,467,545 12,817,764
Interest
1,191,249 1,300,391 938,098 926,587 709,155
Expense
Pretax
21,245,774 3,230,656 9,320,779 11,688,369 12,438,791
Income
Income Tax 6,542,165 925,724 3,169,149 4,889,722 5,260,289
Net Income 13,344,153 2,136,568 5,715,898 5,946,988 6,467,380
EBITDA 30,192,494 12,556,463 16,073,639 19,626,257 17,536,050

Cash Flow
Fiscal year is
January-
December. All 2021 2020 2019 2018 2017
values IDR
Millions.
Funds
from 20,532,188 10,708,955 12,971,861 12,897,242 11,423,769
Operations
Net
Operating 20,532,188 10,708,955 12,971,861 12,897,242 11,423,769
Cash Flow

Financial performance is the determination of certain measures that can

measure the success of an organization or company in forming profits. The
financial performance of a company can be obtained from the information
presented through a financial report in one period. Assessment of financial
performance can be seen in the financial statements owned by the company
concerned which is reflected in the information obtained in the financial
statements as well as other things that also support the strengthening of the
financial performance.
From the summary of the financial statements of PT. Adaro Energy Tbk. it can
be seen the total assets, liabilities and equity of PT. Adaro Energy Tbk. fluctuate.
Even in 2020, the profit/loss of PT. Adaro Energy Tbk. experienced a very far
decrease compared to previous years which was around 8,295,499.
2.5 Analysist

2021 2020 2019 2018 2017

Current
2,12 1,52 1,71 1,96 2,43
Ratio
Quick
2,02 1,43 1,61 1.82 2,32
Ratio
Cash Ratio 1,53 1,17 1,28 1,25 1,79
Debt to
Equity
Ratio 0,39 0,41 0,53 0,39 0,4
Debt to
Assets
Ratio 0,21 0,24 0,27 0,20 0,20
Net Profit
0,23 0,58 0,11 0,11 0,14
Margin
ROA 0,13 0,02 0,06 0,076 0,07
ROE 0,23 0,39 0,10 0,11 0,14

The current ratio is 2017 was 2.43, in 2018 it was 1.96, in 2019 it was 1.71, in
2020 it was 1.52 and in 2021 it was 2,12. This means that every Rp 100,- current
liabilities are guaranteed by current assets Rp 212 in 2021,Rp 152 in 2020, Rp
171 in 2019, Rp 196 in 2018, and Rp 243 in 2017.
Based on the results of the calculation of the data analysis above, it can be
concluded that the current ratio that meets in 2017 and 2021 is considered
quite good where the number is above 2.00, which is 2.43. Although the
current ratio value in 2018 - 2020 has a value below 2.00, it is not too far from
2.00. Because if a company has a current ratio that is too high, it will have an
impact on the company being unable to effectively use its current assets
or current liabilities. This can cause problems in the management of working
capital.
The quick ratio is 2017 was 2.32, in 2018 it was 1.82, in 2019 it was 1.61, in 2020
it was 1.43 and in 2021 it was 2,02. Based on the results of the calculation of the
data analysis above, it can be concluded that the current ratio in 2020 just obly
value below 1.5.
The cash ratio of Adaro is good. All of them above 0,5. That’s means the industry
is were in good shape and healthy, considering the ratio is above the industry
average.
The return on assets (ROA) 0.07 in 2017, in 2018 it was 0.076, in 2019 it was
0.06, in 2020 it was 0.02 and in 2021 was 0,13. Every Rp 100,- total assets
contribute to generating Rp 7 net profit in 2017, Rp 7.6 net profit in 2018, Rp
6 net profit in 2019, Rp 2 net profit in 2020 and Rp 13 net profit in 2021. In terms
of this means that the return on assets in 2018 is better than in 2017. In 2020
the return on assets is also better than in 2020. Thus there has been an
increase performance in generating company profits.
Based on the calculation results of the data analysis above, it can be
concluded that the increase in assets should be in line with the increase in
performance in generating a company's profit. In this case, from 2017 to 2020
there was a significant increase in assets. But in 2020 the decline in asset
values can be caused due to the current covid-19 pandemic, thus making
the economy of a company decline.
Return on Equity (ROE), as measured using the industry average by Kasmir 0,4
then the condition of the company is not good because the ratio in 2017 to 2021
below the average. In addition, when measured using the average of industry
peers, then the condition of the company is also in good condition because it is
below the industry average. Even so, the value of the ratio of ROE has increased
from the previous year, indicating that the company is able to maximize the
return on equity to net income and the company can satisfy the interests of
shareholders.
Debt to Equity (DER) Ratio when measured using the industry average 0,9 the
company in 2017 to 2021 in good shape and healthy because the ratio is below
the industry average. In addition, when measured using the industry average of
its peers, the company is in good shape and healthy considering the ratio is
below the industry average. This indicates that the company has a smaller debt
than equity owned.
Debt to Assets Ratio (DAR), when measured using the industry average 0,3 the
company in 2017 to 2021 in good shape and healthy because the ratio because
the ratio is below the industry average. This indicates that the company financed
with debt not exceeding the industry average.
Net Profit Margin (NPM) company when measured using the industry average
0,2 the company's profit margin in 2017 to 2019 is not considered good because
below the industry average. It can also mean that the price of goods the
company is relatively low or relatively high fees and charges, or both. But in 2020
to 2021 is in good shape and healthy. This indicates that the company has been
able to minimize the burden associated directly to sales.
4. CONCLUSION
From the results of the analysis of financial ratios at PT Adaro Energy
Tbk, it can be concluded as follows, the profitability of PT Adaro Energy
Tbk in 2017-2021 seen from liquidity ratios (current ratio, quick ratio, and
cash ratio result is quite good) is considered quite good . Just in 2020 decline
in values can be caused due to the current covid-19 pandemic, thus
making the economy of a company decline
Condition of the company in terms of the overall solvency ratio was in good
shape and healthy. It can be seen from the development value of the debt to
equity ratio in 2017 to 2021 were always under the industry average, means
the company has less debt than equity owned. In addition, the development of
the value of debt to assets ratio is also in good shape, considering the overall
value is below the industry average.
Condition of the company in terms of overall profitability ratios in an healthy
condition. Just in Net Profit Margin in 2017 to 2019 is not considered good. But
yerly in 2020 to 2021 is in good shape and healthy. This shows there is an
increase of condition.
5. REFERENCE
Books:
Kasmir. (2016). Financial Statement Analysis. Jakarta: Rajawali Pers.
Annual repots:
Annual Report 2018, ADRO
Annual Report 2019, ADRO
Annual Report 2020, ADRO
Annual Report 2021, ADRO
Websites:
https://www.idxchannel.com/stocks?index=ADRO&indexdetail=stockexc
hang3
https://www.wsj.com/market-
data/quotes/ID/XIDX/ADRO/financials/annual/balance-sheet