FINANCIAL DISTRESS ANALYSIS - PowerPoint Presentation

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FINANCIAL DISTRESS ANALYSIS - PPT Presentation

ROA AND ITS RELATIONSHIP TOWARDS TAX AVOIDANCES OF AU TOMOTI VE COMPANIES LISTED AT INDONESIAN STOCK EXCHANGE Francis M Hutabarat amp Ronny B Sihotang Introduction Automotive ID: 796278

score 862 results distress 862 score distress results financial 2015 2011 analysis table solvent 2013 standard shows 2014 companies

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Slide1

FINANCIAL DISTRESS ANALYSIS

, ROA AND ITS RELATIONSHIP TOWARDS TAX AVOIDANCES OF AUTOMOTIVE COMPANIES LISTED AT INDONESIAN STOCK EXCHANGE

Francis M. Hutabarat&Ronny B. Sihotang

Slide2

Introduction

Slide3

Automotive

and Parts Sub Sector in Indonesia

Slide4

Slide5

Sub Se

tor Otomotive Companies

Slide6

Research Method

The study used descriptive method where the data used collected, analyzed and presented in a descriptive manner. The data used were secondary data derived from the financial report of Manufacturing Companies of

Automotive Sub Sector Companies of year 2011-2015. The sample used in the study was 6 out of 13 companies that are listed as companies listed at Indonesia Stock Exchange from Automotive Sub Sector.

Slide7

S-Score

Analysis was done using Springate method of S-Score with four financial ratios: working capital to total asset, earnings before interest and taxes to total assets, profit before tax to total current liabilities, and sales to total assets. The following is Springate method formula: S-Score

= 1.03X1 + 3.07X2 + 0.66X3 + 0.4X4The assessment of Springate formula: S < 0862 Prediction is that company potentially experiencing financial difficulties and potentially going bankrupt.S > 0862 Prediction is that the company is solvent

thus has sound financial performance The analysis on the differences of Food and Beverage companies S-Score is done using paired sample t-test.

Slide8

ROA

Return On Assets is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets. In other words, the return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits during a period.

ROA =

Slide9

Tax Avoidance

Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law.

Tax Avoidance =

Slide10

PT. ASTRA INTERNATIONAL Tbk (ASII

)Table 2 shows the results of S-Score of ASII in year 2011-2015. The results shows that in 2015 AISA can’t cope with the financial crisis and have the result of analysis of Financial Distress and potentially Bankrupt. However, in year 2011-2014 the result of S-Score is 0,837 above the standard 0.862 that means that the company is financially sound and healthy.

Table 2. Analysis of S-Score and Earnings Management of ASII

Year

S-Score

Standard

Analysis

2011

0,109

0,167

0,524

1,053

1,393

0,862

Solvent

2012

0,119

0,153

0,515

1,032

1,345

0,862

Solvent

2013

0,080

0,129

0,387

0,906

1,095

0,862

Solvent

2014

0,097

0,116

0,368

0,855

1,041

0,862

Solvent

2015

0,118

0,080

0,257

0,750

0,837

0,862

Distress

Slide11

PT. ASTRA OTOPARTS Tbk (AUTO

)Table 3 shows the results of S-Score of AUTO in 2011-2015. The results showed that in 2012,2014,2015 AUTO can not cope with the financial crisis and have the results of the analysis of Financial Distress and potentially bankrupt. However, in 2011 and 2013 results of S-Score is 1.583 and 0.871 over 0,862 standard which means that the company is financially sound and healthy.

Table 3. Analysis of S-Score and Earnings Management of AUTO

Year

S-Score

Standard

Analysis

2011

0,096

0,180

0,663

1,057

1,513

0,862

Solvent

2012

0,051

-0,004

0,459

0,932

0,715

0,862

Distress

2013

0,188

0,008

0,477

0,848

0,871

0,862

Solvent

2014

0,089

0,013

0,287

0,852

0,661

0,862

Distress

2015

0,082

0,030

0,120

0,818

0,583

0,862

Distress

Slide12

PT. INDO KORDSA Tbk (BRAM

)Table 4 shows the results of S-Score of BRAM in year 2011-2015. The results showed that in 2013 and 2014 BRAM can not cope with the financial crisis and have the results of the analysis of Financial Distress and potentially bankrupt. However, in 2011, 2012 and 2015 results of S-Score is 0,986, 1,270 and 0,896 over 0,862 standard which means that the company is financially sound and healthy.

Table 4. S-Score BRAM

Year

S-Score

Standard

Analysis

2011

0,286

0,040

0,231

1,037

0,986

0,862

Solvent

2012

0,199

0,114

0,624

0,757

1,270

0,862

Solvent

2013

0,139

0,040

0,144

0,837

0,696

0,862

Distress

2014

0,104

0,078

0,282

0,674

0,801

0,862

Distress

2015

0,156

0,077

0,324

0,712

0,896

0,862

Solvent

Slide13

PT. GOODYEAR INDONESIA Tbk (GDYR)

Table 5 shows the results of S-Score of GDYR in year 2011-2015. The results showed that in 2011, 2014 and 2015 GDYR can not cope with the financial crisis and have the results of the analysis of Financial Distress and potentially bankrupt. However, in 2012, and 2013 results of S-Score is

0,908 and 0,900 over 0,862 standard which means that the company is financially sound and healthy.Table 5. S-Score GDYR

Year

S-Score

Standard

Analysis

2011

(0,086)

0,024

0,041

1,585

0,646

0,862

Distress

2012

(0,059)

0,073

0,131

1,641

0,908

0,862

Solvent

2013

(0,029)

0,060

0,125

1,660

0,900

0,862

Solvent

2014

(0,030)

0,037

0,071

1,281

0,644

0,862

Distress

2015

(0,033)

0,013

0,024

1,294

0,538

0,862

Distress

Slide14

PT. GAJAH TUNGGAL Tbk (GJTL)

Table 6 shows the results of S-Score of GJTL in 2011-2015. The results showed that in 2013,2014,2015 GJTL can not cope with the financial crisis and have the results of the analysis of Financial Distress and potentially bankrupt. However, in 2011 and 2012 results of S-Score is 1,026 and 1.231 over 0,862 standard which means that the company is financially sound and healthy.

Table 6. Analysis of S-Score and Earnings Management of GJTL

Year

S-Score

Standard

Analysis

2011

0,188

0,074

0,295

1,025

1,026

0,862

Solvent

2012

0,169

0,113

0,483

0,977

1,231

0,862

Solvent

2013

0,253

0,011

0,056

0,805

0,653

0,862

Distress

2014

0,197

0,025

0,126

0,815

0,688

0,862

Distress

2015

0,165

(0,019)

(0,089)

0,741

0,349

0,862

Distress

Slide15

PT. INDOMOBIL SUKSES INTERNATIONAL Tbk (IMAS

)Table 7 shows the results of S-Score of IMAS in 2011-2015. The results showed that in 2012- 2015 IMAS can not cope with the financial crisis and have the results of the analysis of Financial Distress and potentially bankrupt. However, in 2011 results of S-Score is 1,026 and 1,036 over 0,862 standard which means that the company is financially sound and healthy.

Table 7. Analysis of S-Score and Earnings Management of IMAS

Year

S-Score

Standard

Analysis

2011

0,154197

0,079422

0,219484

1,22167

1,036177

0,862

Solvent

2012

0,105229

0,059692

0,134749

1,125339

0,83071

0,862

Distress

2013

0,041111

0,042617

0,055565

0,900503

0,570053

0,862

Distress

2014

0,015854

0,043021

0,001646

0,829016

0,481097

0,862

Distress

2015

-0,03392

0,041723

0,015576

0,728048

0,394651

0,862

Distress

Slide16

Analysis of Data Differences

Classic Assumption TestTable above shows that there is no autocorrelation between independent variables with Durbin Watson 1.633. Thus, the test was accepted.

Slide17

Coefficients

Table above shows that there is no multicollinearity since VIF 3.452 < 10. Thus, the test was accepted.

Slide18

One-Sample Kolmogorov-Smirnov Test

The study shows that the test distribution is normal.

Slide19

COEFFIENT CORRELATION

Based on the table above, the results indicated that there is a positive relationship between s-score and return on assets towards tax avoidance of Automotive and Spare Parts companies listed at Indonesian Stock Exchange. The effect is 23.4% as indicated from R-square value.

Slide20

Table above shows that there is a significant correlation between ROA and Tax Avoidance with p-value 0.027 at α = 0.05.

Correlation between ROA & Tax Avoidance

Slide21

Table above shows that there is no significant correlation partially between independent variables and dependent variables of the study with t-count S-Score (0.212) and ROA (-1.722) < t-table, and p-value 0.833 (S-Score) and 0.096 (ROA) at α = 0.05.

Slide22

CONCLUSION

The study concluded that based on the results of the study the Automotive and Spare Parts Sub Sector has generally the results indicated that there is a positive relationship between s-score and return on assets towards tax avoidance of Automotive and Spare Parts companies listed at Indonesian Stock Exchange. There are three companies that have S-Score below the standard 0.862, they are: AISA (0.515), INDF (0.727), STTP (0.586) which means they have potential to be bankrupt

.The study recommends the ratios such as financial ratios of Springate to be used as predictor for company bankruptcy potential predictors and that they need to evaluate their performance as most of the companies studied were having bad performances.

Slide23

GOD BLESS US

Slide24

REFERENCES

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Fahmi, I. (2014). Analisis Kinerja Keuangan. Bandung: Penerbit Alfabeta.Hanifah, O. (2013). Pengaruh Struktur Corporate Governance dan Financial Indicators Terhadap Kondisi Financial Distress. Jurnal Maksi Undip, 25-53.Harahap, S.S. (2015). Analisa Kritis atas Laporan Keuangan. Jakarta: PT RajaGrafindo Persada.Hery. (2015) Analisis Laporan Keuangan. Jakarta: CAPS (Center for Academic Publishing Service).Ida, & Santono, S. (2011). Analisis kebangkrutan dengan menggunakan metode springate. Media Bisnis, Maret 2011, Volume 3, No.1.

Slide25

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