Business Valuation

Ratio Analysis of PT Telekomunikasi

MEB2476 LEE JEABOK

361136 ADIF MUHAMMAD
 Ratio Analysis

Liquidity

Current ratio = Current assets / Current liabilities

Acid-test ratio = (Cash and cash equivalents + Marketable securities + Accounts receivable) / Current liabilities

Collection period = (Average accounts receivable) / (Sales/360)

Days to sell inventory = Average inventory / (Cost of sales/360)

Capital Structure and Solvency

Total debt to equity = Total liabilities / Shareholders equity

Times interest earned = Income before income taxes and interest expense / Interest expense

Return on Investment

Return on assets = (Net income + interest expense * (1 Tax rate) / Average total assets

Return on common equity = Net Income / Average shareholders equity

Operation Performance

Gross profit margin = (Sale Cost of sales) / Sales

Operating profit margin (pretax) = Income from operations / Sales

Net profit margin = Net income / Sales

Asset Utilization

Cash turnover = Sales / Average cash and equivalents

Accounts receivable turnover = Sales / Average accounts receivable

Inventory turnover = Cost of sales / Average accounts receivable

Working capital turnover = Sales / Average working capital

PPE turnover = Sales / Average PPE

Total asset turnover = Sales / Average total assets

 Ratio Analysis

2014
Ratios 2015 2013 2012 2011
(As restated)

Liquidity Ratios
Current ratio 1.35 1.06 1.16 1.16 0.96
Acid-test ratio 1.10 0.86 0.98 0.95 0.69
22.7
Collection period (in day) 25.95 28.06 30.18 32.67
2
7.2
Days to sell inventory (in day) 9.20 10.61 12.20 12.52
9

Capital Structure and Solvency

Ratio
Total debt to equity 0.78 0.65 0.65 0.66 0.69
Long-term debt to equity 0.32 0.18 0.19 0.20 0.21
13.6
Times interest earned 16.77 19.05 12.79 13.74
3

Return on Investment
Return on assets 19.65% 17.85% 16.44% 15.16% 12.72%
Return on common equity 31.12% 28.64% 26.51% 23.89% 20.12%

Operating Performance
Gross profit margin 72.56% 75.15% 76.70% 78.22% 77.02%
Operating profit margin (pretax) 31.64% 32.56% 33.56% 33.31% 30.82%
Net profit margin 23.37% 24.57% 24.59% 23.84% 21.73%

Asset Utilization
6.1
Cash turnover 5.39 4.98 4.63 4.28
6
15.8
Accounts receivable turnover 13.87 12.83 11.93 11.02
5
49.3
Inventory turnover 39.13 33.94 29.50 28.74
6
23.2
Working capital turnover 20.34 18.82 17.49 16.16
4
537.6
PPE turnover 470.60 435.29 404.74 373.84
2

Total asset turnover 0.79 0.69 0.64 0.59 0.55