Group 4
ANALYSIS RATIO INTERPRETATION
Liquidity Ratio Analysis
1. Current Ratio (2022: 0.61 → 2023: 0.55 → 2024: 0.45)
The current ratio is getting lower each year. This means the company has fewer
current assets compared to its short-term liabilities. A lower current ratio can indicate
that the company might struggle to pay its short-term debts if this trend continues.
2. Quick Ratio (Acid Test Ratio) (2022: 0.40 → 2023: 0.34 → 2024: 0.23)
This ratio removes inventory from current assets and only considers the most liquid
assets. Since it is decreasing, it suggests that the company has fewer cash-like assets
to cover short-term obligations.
3. Cash Ratio (2022: 0.04 → 2023: 0.09 → 2024: 0.06)
The cash ratio tells us how much cash the company has compared to its short-term
debts. While it increased slightly in 2023, it dropped again in 2024. A very low cash
ratio means the company doesn’t have much cash on hand.
Market Ratio Analysis
1. Price-to-Earnings Ratio (PER) (2022: Rp33.76 → 2023: Rp28.02 → 2024:
Rp21.42)
A lower PER means investors are paying less for each unit of the company’s earnings.
This could suggest that the stock is becoming less attractive or that investors have
lower confidence in the company’s future growth.
2. Dividend Yield (2022: 0.0086 → 2023: 0.0218 → 2024: 0.0334)
This ratio is increasing, which means the company is paying higher dividends
compared to its stock price. A higher dividend yield can attract investors looking for
steady income. However, it could also mean the company is not reinvesting enough
profits for growth.
3. Dividend Payout Ratio (2022: 0.291 → 2023: 0.611 → 2024: 0.716)
The company is giving out more of its earnings as dividends each year. While this
benefits investors in the short term, it might leave less money for business expansion.
Activity Ratio
1. Receivables Turnover: Receivables Turnover remained stagnant at 0.001 in both
2022 and 2023 before dropping to 0.000 in 2024. This figure indicates an extremely
low turnover rate of receivables, meaning customer payments are either very rare or
difficult to collect. A low receivables turnover can suggest that the company has
overly lenient credit policies or is facing challenges in collecting payments, which
could negatively impact cash flow.
2. Average Age of Receivables: The Average Age of Receivables increased steadily
from 26.57 days in 2022 to 29.29 days in 2023 and further to 32.73 days in 2024. This
trend suggests that customers are taking longer to settle their dues with the company.
A higher number of days implies slower cash inflows, potentially straining the
company’s liquidity and its ability to meet short-term obligations.
3. Inventory Turnover: Inventory Turnover has shown a downward trend over the past
three years, declining from 8.439 in 2022 to 7.694 in 2023, and further dropping to
7.475 in 2024. This decline suggests that the company is experiencing slower
inventory sales. A lower turnover ratio means products remain in stock longer before
being sold, which could increase storage costs and the risk of inventory becoming
obsolete or unsellable.
4. Average Age of Inventory: The Average Age of Inventory increased from 45.80 days
in 2022 to 47.40 days in 2023 and continued rising to 48.86 days in 2024. This rise
indicates that, on average, it takes longer for inventory to be sold. A prolonged
inventory age may signal slower sales or excessive stock accumulation, which could
lead to higher storage costs and a risk of goods becoming outdated or less relevant in
the market.
5. Fixed Asset Turnover: Fixed Asset Turnover saw a drastic decline in 2023, dropping
to 0.415 from 4.422 in 2022. However, it rebounded to 3.770 in 2024. This ratio
measures how efficiently a company uses its fixed assets to generate revenue. The
sharp drop in 2023 may indicate underutilization of assets or increased investment in
assets that have yet to yield returns. Meanwhile, the increase in 2024 suggests an
improvement in asset efficiency.
6. Total Asset Turnover: Total Asset Turnover has been decreasing over the last three
years, from 2.428 in 2022 to 2.317 in 2023 and further down to 2.190 in 2024. This
ratio evaluates how effectively a company utilizes its total assets to generate sales.
The decline indicates decreasing efficiency in asset utilization, which could have a
negative impact on overall profitability.
Profitability Ratio
1. Net Profit Margin: The Net Profit Margin has fluctuated significantly over the past
three years. In 2022, it was 0.1302, then surged to 1.2433 in 2023 before declining
sharply to 0.0959 in 2024. The sharp increase in 2023 could be attributed to higher
revenue or improved cost efficiency, while the decline in 2024 may suggest rising
operational costs or declining revenue.
2. Gross Profit Margin: Gross Profit Margin rose from 0.4625 in 2022 to 4.9709 in
2023 but slightly decreased to 4.7582 in 2024. This ratio indicates how much gross
profit the company earns from sales after deducting the cost of goods sold (COGS).
The increase in 2023 suggests improved cost management, while the slight decline in
2024 could indicate higher raw material costs or increased operational expenses.
3. Return on Assets (ROA): Return on Assets has been on a downward trend, falling
from 0.3160 in 2022 to 0.2881 in 2023, and further declining to 0.2099 in 2024. ROA
measures how efficiently the company generates profit from its assets. The continuous
decline indicates decreasing operational efficiency or an increase in unproductive
assets, which could hinder profitability.
4. Return on Equity (ROE): Return on Equity has also been declining, from 70.3114 in
2022 to 62.9219 in 2023 and further down to 44.1506 in 2024. This ratio assesses the
company's profitability in relation to shareholders' equity. The consistent decline
suggests that the company is becoming less efficient in generating profits for
shareholders, which may raise concerns for investors regarding long-term profitability
prospects.
Solvency Ratio
1. Debt Asset Ratio (DAR): This ratio measures the proportion of total assets financed
by debt. A higher DAR means more reliance on debt. The increase from 0.7818
(2022) to 0.8661 (2024) suggests higher financial leverage, which could indicate
increased risk.
2. Debt Equity Ratio (DER): This ratio compares total debt to shareholders’ equity. A
rising DER from 3.5827 (2022) to 6.4659 (2024) shows that the company is using
significantly more debt compared to equity, which may increase financial risk and
interest obligations.
3. Times Interest Earned (TIE) Ratio: In 2022, the company had a very strong TIE
ratio of 105.75, indicating high financial stability and a strong ability to cover interest
expenses.In 2023, the ratio declined significantly to 59.52, suggesting a decrease in
earnings before interest and tax (EBIT) relative to interest obligations.In 2024, the
TIE ratio rebounded to 75.81, showing an improvement in the company's ability to
cover its interest expenses but still below the 2022 level.
4. Fixed Charge Coverage (FCC) Ratio: The FCC ratio followed a similar trend,
decreasing from 52.88 in 2022 to 29.76 in 2023. In 2024, the FCC ratio improved to
37.91, showing a positive financial recovery.
Conclusion
The company experienced a decline in its ability to cover interest and fixed charges in 2023,
indicating a potential reduction in profitability or increased financial obligations. The
improvement in 2024 suggests financial recovery, but the company has not yet reached its
2022 performance level. While the company remains financially stable, management should
continue efforts to strengthen earnings and control financial obligations to ensure long-term
sustainability.
