Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Financial Performance Assessment of PT Astra Agro Lestari
Tbk Compared With Other Palm Oil Companies
Sovi Savira Miftah* and Sylviana Maya Damayanti **
Indonesia is the world’s largest palm oil producer followed by Malaysia in number two
and Thailand in number three. Moreover, palm oil gives a big contribution in Indonesia
for non oil and gas commodity’s export. But these years, the price of Crude Palm Oil
(CPO) is decreasing. As the largest producer, Indonesia’s palm oil company might
have been affected. One of palm oil companies in Indonesia is PT Astra Agro Lestari
Tbk. This study will assess the financial performance of PT Astra Agro Lestari Tbk, as
one of the leading companies that be the first winner in Fortune Indonesia Most
Admired Companies (FIMAC) 2013 and have the largest planted area among listed
palm oil companies in Indonesia, 2013, compared to other local and global palm oil
companies.
The assessment will use Moody’s Global Framework, Compound Annual Growth Rate
(CAGR) analysis, and DuPont System of Analysis. PT Astra Agro Lestari will be
compared to six listed palm oil companies in Indonesia which are PT Sawit
Sumbermas Sarana Tbk, PT BW Plantation Tbk, PT Sinar Mas Agro Resources and
Technology (SMART) Tbk, PT Gozco Tbk, PT Provident Agro Tbk, and PT Multi Agro
Plantation Tbk; two listed palm oil companies in Malaysia, IJM Plantations Berhad and
Kwantas Corporation Berhad; and one listed palm oil company in Thailand, Univanich
Palm Oil PCL.
The purpose of this study is to analyze the financial performance of PT Astra Agro
Lestari Tbk compared to other local and global listed palm oil companies. Besides that,
the other purpose is to know the trend of the companies’ financial performance. After
doing the assessment, this study is expected to give some recommendations to
improve the performance of PT Astra Agro Lestari Tbk.
Keyword: Financial Assessment, PT Astra Agro Lestari Tbk, Palm Oil Companies
1. Introduction
Indonesia has been stated as the world’s largest producer of palm oil according to The
Sustainable Palm Oil Platform. This rank is followed by Malaysia in number two and
Thailand in number three. Moreover, the large production of palm oil in Indonesia made
this commodity be the biggest contributor for export of non oil and gas industry
commodity. Based on the routine bulletin by Direktorat Jenderal Pengembangan Ekspor
Nasional in Indonesia, palm oil contributes US$ 17.602 billion from total US$ 153.055
billion or 12.91% of total export in industry commodity, 2012.
These years, the price of Crude Palm Oil (CPO) is decreasing. Actually it shows an up and
down number, but the average price per year still shows a declining. Based on data in
Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI), in 2013, the CPO price (CIF
Rotterdam) is US$ 841.71 per metric ton in average, 18% decreasing from 2012 which is
US$ 1,028.40 per metric ton.
*Sovi Savira Miftah, School of Business and Management, Institut Teknologi Bandung, Indonesia
Email: sovi.savira@sbm-itb.ac.id
**Sylviana Maya Damayanti, ST, MBA, School of Business and Management, Institut Teknologi Bandung,
Indonesia Email: sylviana@sbm-itb.ac.id
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
The declining world’s price also makes the CPO price in Indonesia decrease. It is because
of the prolonged economic crisis happened in EU countries which makes the purchasing
power weakened, the slowdown of economic growth in India as the main buyer of
Indonesia’s CPO, the slowdown in China’s economic growth too, and the accumulated
supply from stock and production in Indonesia.
One of the dominant palm oil companies in Indonesia is PT Astra Agro lestari Tbk, which
manages palm oil plantation in Sumatera and Kalimantan. This company has the largest
total planted area in Indonesia in 2013, which is 281.378 hectares compared to other
listed palm oil companies in Indonesia. Besides that, this company also receives a reward
as the first winner in Fortune Indonesia Most Admired Companies (FIMAC), 2013.
Regardless from the decreasing CPO price, logically, having the largest plantation area
can make a company have more income than other competitors. The company can
produce more and get bigger profit than other. From that condition, the author is interested
to analyze the financial performance of this company. Moreover, PT Astra Agro Lestari
Tbk also has a good predicate from Fortune Indonesia which makes people believe that
this company has a good financial performance. Author wants to compare it to other listed
palm oil companies in Indonesia, Malaysia, and Thailand as the three largest producer of
palm oil in the world. The companies are PT Sawit Sumbermas Sarana Tbk, PT BW
Plantation Tbk, PT Sinar Mas Agro Resources and Technology (SMART) Tbk, PT Gozco
Tbk, PT Provident Agro Tbk, and PT Multi Agro Plantation Tbk as listed palm oil
companies in Indonesia;, IJM Plantations Berhad and Kwantas Corporation Berhad as two
listed palm oil companies in Malaysia; and Univanich Palm Oil PCL as listed palm oil
company in Thailand. Is PT Astra Agro Lestari Tbk really has a good performance in all
aspect compared to other companies.
2. Literature Review
Being the first winner of Fortune Indonesia Most Admired Companies (FIMAC) in
agriculture sector, PT Astra Agro Lestari expected to be the best in all aspect of its
financial condition compared to other Indonesia palm oil companies. Financial
performance of a company can be compared to another by using the data of financial
statement which consists of Income Statement, Balance Sheet, Statement of Retained
Earnings, and Statement of Cash flow. From those data, the ratio will be calculated
because it is almost impossible to compare companies that have different size. To avoid
problems that might happen, financial ratio analysis can be invented. It compares the
relationship between different pieces gotten from financial information.
After calculating the ratios, some methods will be used to make the analysis. The methods
used in this paper are Trend Analysis, Compound Annual Growth Rate (CAGR), DuPont
System of Analysis, and Moody’s Global Protein and Agriculture Industry. Book tited
“Principles of Management Finance” by Gitman Lawrence J. and Zutter, Ched J. and
Moody’s Investor Methodology will be used as the basic literature review.
2.1 Trend Analysis
Trend analysis is an analysis tool used to predict the future movement based on historical
data. The historical data will help to know the company’s financial performance. Financial
performance of a company can be considered as good not only by looking at the
assessment compared to other company in one year, but also by looking at the growth
rate. A good performance will have better result among other companies and show a
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
positive growth rate which describes the company’s capability to maintain the company’s
performance.
2.1.1 Financial Ratio
There are five Common Financial Ratios based on “Principles of Managerial Finance”
book, which is:
2.1.1.1 Liquidity Ratios
This ratios measure the company’s ability to satisfy the short-term obligations
as they come due. The higher these ratios mean the greater degree of
liquidity.
2.1.1.1.1 Current Ratio
2.1.1.1.2 Quick (Acid-Test) Ratio
2.1.1.2 Activity Ratios
This ratios measure the company’s effectiveness to use the assets to
generate sales or cash (inflow or outflow).
2.1.1.2.1 Inventory Turnover
2.1.1.2.2 Average Collection Period
2.1.1.2.3 Average Payment Period
2.1.1.2.4 Total Asset Turnover
2.1.1.3 Debt Ratios
This ratios measure the company’s ability in long-run to meet the obligations
or financial leverage. It indicates the assets of the company which being
covered by the debt. The more debt the company has, the greater the risk if
being unable to meet its contractual debt payments.
2.1.1.3.1 Total Debt Ratio
2.1.1.3.2 Times Interest Earned Ratio
2.1.1.4 Profitability Ratios
This ratios measure the company’s effectiveness to manage the operations. It
is used to evaluate the company’s profits to a given level of sales, a certain
level of assets, or the owner’s investment.
2.1.1.4.1 Gross Profit Margin
2.1.1.4.2 Operating Profit Margin
2.1.1.4.3 Net Profit Margin
2.1.1.4.4 Earnings per Share (EPS)
2.1.1.4.5 Return on Total Assets (ROA)
2.1.1.4.6 Return on Common Equity (ROE)
2.1.1.5 Market Ratios
This ratios measure the company’s market value.
2.1.1.5.1 Price to Earnings Ratio
2.1.1.5.2 Market to Book Ratio
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
2.1.2 Compound Annual Growth Rate (CAGR)
Compound Annual Growth Rate (CAGR) can be defined as The year-over-year growth
rate of an investment over a specified period of time (Investopedia: 2014). It can be
calculated by dividing the ending value to the beginning value, then raised to the power of
1/(number of years) then the last substract it by 1.
2.2 DuPont System of Analysis
DuPont System of Analysis using three parts that tells different meaning which allow the
companies to break the ROE into some parts:
1. Profit margin measures the operating efficiency.
2. Total asset turnover measures the asset use efficiency.
3. Financial leverage multiplier measures the financial leverage.
DuPont System Analysis first use Net Profit Margin and Total Asset Turnover to formulate
ROA:
ROA = Earnings available for common stockholders x
sales
Sales
total asset
The second step is modified DuPont Formula which relates ROA to ROE. It can be
calculated by multiplying ROA with Financial Leverage Multiplier (FLM). FLM measures
the total assets to the common stock equity. By using the LFM, it reflects the impact of
financial leverage on the owner’s return. The formulation will be:
ROE = ROA x FLM
ROE = Profit margin x Total asset turnover x Financial leverage multiplier
Earnings available for common stockholders x
sales
x total asset
Sales
total asset common stock equity
2.3 Moody’s Global Protein Agriculture Industry
Moody’s Global Protein and Agriculture Industry measurement is a rating methodology
used for assessing credit risk in protein and agriculture industry globally. Plantation is a
sub sector of agriculture, so this method can be used to palm oil company performance
measurement. There are four main rating factors that this Moody's analysis focuses on
and be broken down into 11 sub-factors, which are:
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Proceedings of 7th Asia-Pacific Business Research Conference
25 - 26 August 2014, Bayview Hotel, Singapore ISBN: 978-1-922069-58-0
Table 2.1 Rating factors/sub-factors weighting
Rating factors
1) Scale and
Diversification
2) Business Position
3) Financial policy
4) Leverage and
coverage
Sub-factors
Weighting
a. Total Sales (billion US$)
b. Geographic Diversification
c. Segmental Diversification
a. Market share
b. Product Portfolio Profile
c. Earning Stability
a. Financial policy
a. CFO / Net Debt
10.0%
5.0%
5.0%
5.0%
10.0%
10.0%
15.0%
b. Net Debt / EBITDA
c. EBITA / Interest Expense
d. Debt / Book Capitalization
10.0%
10.0%
10.0%
10.0%
Cumulative
sub-factor
weighting
20.0%
25.0%
15.0%
40.0%
100.0%
3. The Methodology and Model
There are six steps done in order to assess the financial performance of PT Astra Agro
Lestari Tbk with other local and global palm oil companies. The first step is problem
identification which contains the topic and the purpose of this paper. Then, the author has
to search some literature reviews that will be used as references. The next step is
methodology which includes the steps needed for doing this paper. And then, the author
will do data collecting. In this step, historical financial statement of the companies will be
used. The required data are annual report of years 2009 to 2013 of PT Astra Agro Lestari
Tbk as the main company observed, six listed palm oil companies in Indonesia, two listed
palm oil companies in Malaysia, and one listed palm oil company in Thailand. After data
collection, there result will be analysed. The conclusion and some recommendation for the
company will be given in the end of the paper.
4. The findings
4.1 DuPont System of Analysis
In 2009, Univanich Palm Oil PCL from Thailand had the highest ROA followed by PT Astra
Agro Lestari Tbk. The last positions in this year are Kwantas Corporation Berhad from
Malaysia and PT Multi Agro Plantation Tbk. They both had a negative result of ROA due
to the loss occurred in both companies. But in 2010, Kwantas showed an improvement
with a positive result, 6.24%, while PT Multi Agro Plantation Tbk has more negative
number. Otherwise, for the first rank, Univanich Palm Oil PCL has been replaced by PT
Astra Agro Lestari Tbk with only 0.85% difference.
The opposite happened in 2011, PT Multi Agro began to gain a positive ROA while
Kwantas had to face a negative ROA again. The first and second positions still owned by
Univanich Palm Oil PCL and PT Astra Agro Lestari Tbk. But in this year, Univanich lead
with a huge difference which reaches 40.99% while PT Astra Agro Lestari Tbk that’s in the
second position is only 24.48%.
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Proceedings of 7th Asia-Pacific Business Research Conference
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Since 2012 to 2013, the condition change, PT Sawit Sumbermas Sarana Tbk shows a
very good improvement which made it beat the ROA of PT Astra Agro Lestari Tbk. It was
due to the increasing of its revenue although actually the number of PT Sawit Sumbermas
Sarana Tbk’s ROA decrease in 2013 due to the new policies after its Initial Public Offering
(IPO) in December 2013.
In 2012, out of 10 companies above, only PT Provident Agro Tbk has a negative result of
ROA, but in 2013 PT Gozco Plantation Tbk also has a negative ROA along with PT
Provident Agro Tbk. Both of the company has a negative score in net profit margin while
the asset turnover still showing a positive result. PT Provident Agro Tbk shows the worst
ROA because since 2012, this company had to face losses due to the increasing in the
cost of sales and the operating expenses. For the total asset turnover, there is no
difference in 2012 to 2013 which means that the decreasing in ROA is all depend on the
decreasing of the net profit margin.
PT Gozco Plantation Tbk has a negative result in 2013 because of the negative operating
cash flow due to loss caused by the condition of the plant. The plant that can gain a
positive cash flow is plant that already matured. Plant with age seven until 20 years will
provide optimum crop yield and palm oil extraction. And as at December 2013, the
number of mature field of PT Gozco Plantation Tbk is only 12,726 from total 40,727
hectares.
The rest companies show positive result of ROA in 2012 to 2013 but only Kwantas
Corporation Berhad from Malaysia that shows an increasing although it’s only a small
difference. The difference of ROA is from the increasing in the total asset turnover.
The highest ROA in the latest year, 2012 and 2013, is Univanich Palm Oil PCL from
Thailand, followed by PT Sawit Sumbermas Sarana Tbk in the second place, and PT
Astra Agro Lestari Tbk is only in the third place. It is quite surprising since PT Astra Agro
Lestari Tbk is expected to be the best from Indonesia. PT Provident Agro Lestari Tbk is in
the last place in both 2012 and 2013 because of the losses and for the second last, PT
Multi Agro Plantation Tbk in 2012 and PT Gozco Plantation Tbk in 2013.
The second step after calculating the ROA is ROE analysis. There are changes happen in
the first until third rank of ROE but the last rank is still the same. If in ROA Univanich from
Thailand is in the first place, in ROE analysis PT Sawit Sumbermas Sarana Tbk always
lead from 2009 to 2013 followed by Univanich in the second place and PT Astra Agro
Lestari in the third place. It is because of the high amount of PT Sawit Sumbermas Tbk’s
financial leverage multiplier. In 2013, the leverage multiplier of PT Sawit Sumbermas
Sarana Tbk is showing a huge declining. It is because of the IPO
PT Provident Agro Tbk still showing a negative result in 2012, and in 2013 PT Gozco
Plantation Tbk has a negative ROE too. They are all because of the negative value of net
profit. Actually, PT Provident Agro Tbk has high amount of financial leverage multiplier in
both 2012 and 2013. It can be either advantages or disadvantages. The more the financial
leverage multiplier can increase the ROE of the company but it also can indicate that the
company owned an excessive debt load. The decreasing in FLM can show that a
company is trying to lessen its dependency in financing the assets using debt.
From the DuPont Analysis above we can see that PT Astra Agro Lestari Tbk have a good
performance compared to other local and global palm oil companies, although the
company still has to do some improvement to be the best and reach the highest ROA and
ROE since it is always beaten by PT Sawit Sumbermas Sarana Tbk except for ROA in
2009 to 2011.
4.2 Compound Annual Growth Rate (CAGR)
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Proceedings of 7th Asia-Pacific Business Research Conference
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4.2.1 Liquidity Ratio
The result shows that five of ten companies, including PT Astra Agro Lestari Tbk, have a
negative growth in term of liquidity. The worst growth in liquidity ratio is PT Astra Agro
Lestari Tbk. It is driven by a decreasing in inventories, advances, and account receivables,
combined with increasing in cash and cash equivalent in 2013.
PT SMART Tbk also represent a negative growth. It is caused by the increases inventory
in that year. That higher amount of inventory can make the total asset increase but it will
lessen the number in quick ratio which measurement exclude inventories. Another
company that shows a negative growth is PT Multi Agro Plantation Tbk, PT BW Plantation
Tbk and PT Gozco Tbk.
PT Sawit Sumbermas Sarana Tbk showing the highest growth in liquidity followed by IJM
Plantations from Malaysia. It indicates that PT Sawit Sumbermas Sarana Tbk can manage
its current asset to pay its short term debt. PT Provident Agro Tbk, Kwantas Corporation
from Malaysia, IJM Plantations from Mayalsia, and Univanich from Thailand’s liquidity ratio
has a good performance too.
4.2.2 Activity Ratio
In inventory turnover, PT Gozco Tbk, PT Provident Agro Tbk, and PT Astra Agro Lestari
Tbk have a positive growth while the other companies show a downgrading measure. PT
Gozco Tbk has the highest growth. PT Astra Agro Lestari Tbk also has a positive growth
in the third rank after PT Gozco and PT Provident Agro lestari. The other remaining
companies have a negative growth in this ratio which indicates a poor performance.
In term of total asset turnover, all companies except PT Sawit Sumbermas Sarana Tbk,
have a negative result. It indicates that PT Sawit Sumbermas Sarana Tbk has been the
best company that can manage their assets effectively.
In average collection period and average payment period, the negative growth shows
better condition rather than positive growth. It is because of the shorter the period, the
stronger the companies’ ability to manage their receivables.
PT Astra Agro Lestari Tbk has the best performance in this ratio. The result is -40.14%
which implies a better condition. It is because to maintain and manage the receivable, this
company always evaluates it periodically to anticipate the collectability. And in term of
average payment period, PT Astra Agro Lestari Tbk shows a stable condition among all. It
is shown by the growth that only resulting 0.00 in two decimal behind.
4.2.3 Debt Ratios
PT Astra Agro Lestari Tbk has the highest growth in both debt ratio and debt to equity
ratio and it increase gradually from year to year for debt to equity ratio. It is not a good
condition which means the company still depends on debt when financing assets. If the
number of debt ratio keeps increasing, it will be at risk if someday the company has to pay
its debt.
On the other hand, PT Sawit Sumbermas Sarana Tbk has been gradually minimized its
debt each year which is shown by the CAGR of debt ratio of -0.17 and the CAGR of debt
to equity ratio of -0.49.
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Proceedings of 7th Asia-Pacific Business Research Conference
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4.2.4 Profitability Ratios
The performance of PT Astra Agro Lestari Tbk in profitability ratios is not the worst
compared to other although actually it has negative growth in operating profit margin, net
profit margin, return on total assets, and return on common equity. Overall, the growths of
profitability in almost all companies show a negative result. It is the effect of the declining
price of CPO these years. But in term of productivity, the volume of some companies
increase so that the number of its profit margin doesn’t extremely decrease.
4.2.5 Market Ratios
In term of Price per Earnings ratio, Univanich Palm Oil PCL from Thailand has the highest
among all. In Indonesia, PT BW Plantation Tbk is the highest, while PT Astra Agro Lestari
Tbk has a negative result. Moreover, PT Astra Agro Lestari Tbk still has a negative growth
in term of market per book ratio.
4.3 Moody’s Global Protein and Agriculture Industry
The result of Moody’s measurement shows that PT Astra Agro Lestari Tbk gets the first
rank among all, followed by IJM Plantations from Malaysia. Actually these two companies
have the same rating, Baa2, for the result. But PT Astra Agro Lestari Tbk leads with score
9.15, while IJM Plantations has a slight different score, 9.35. The table below will show the
rank of all companies:
Table 4.1 Moody’s Rating Measurement
Rank
1
2
3
4
5
6
7
8
9
10
Company
PT Astra Agro Lestari Tbk
IJM Plantations Berhad - Malaysia
Univanich Palm Oil PCL - Thailand
PT SMART Tbk
Kwantas Corporations Berhad - Malaysia
PT Sawit Sumbermas Sarana Tbk
PT Multi Agro Plantation Tbk
PT Gozco Tbk
PT BW Plantation Tbk
PT Provident Agro Tbk
Rating
Baa2
Baa2
Baa3
Ba2
Ba2
Ba3
B2
B2
B2
B3
Score
9.15
9.35
9.65
12.45
12.45
12.75
14.55
15.25
15.30
15.60
The result shows that PT Astra Agro Lestari Tbk’s performance is far above the other
Indonesia palm oil companies. It is not surprising since PT Astra Agro Lestari Tbk already
known as one of leading palm oil companies in Indonesia that also often gets award from
Fortune Indonesia.
PT Astra Agro Lestari Tbk doesn’t always show the best result in the sub factors but the
ending result shows that this company can be considered as a company that has a good
condition.
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4.3.1 Scale and Diversification
The highest score of total revenue crowned to PT SMART Tbk which get a B score from
USD 2.4 billion. This position followed by PT Astra Agro Lestari Tbk that also get a B
score but with total revenue of USD 1.3 billion. The third rank in term of revenue is given
to Kwantas Corporations from Malaysia which have total revenue of 0.6 billion USD in
2013. The other remaining companies only have Caa score in this sub factor with a
revenue range below 0.5 billion USD.
The segmental diversity of all companies here has Caa score. It is because of this paper
only analysing companies that have business in palm oil products only. For the geographic
diversification, PT Sawit Sumbermas Sarana Tbk and PT Multi Agro Plantation Tbk have
the lowest score. These companies only sell their product in Indonesia and only have
plantation in one province in Indonesia. Unlike those two companies, the other five
companies have B score which indicates that they have wide enough location range of
selling and source of raw materials. The three remaining companies have Caa rating since
they sell their product in only one country but get the raw material from more than one
province.
4.3.2 Business Position
PT Astra Agro Lestari Tbk and PT SMART Tbk are known as the leading palm oil
companies in Indonesia, so the score rating for both companies is Ba. Univanich Palm Oil
PCL from Thailand also known as the leading palm oil company in Thailand, so the score
rating is the same with the two previous companies, Ba. The other companies only have
small market share in their country so they have smaller rating score than the three
companies above.
PT SMART Tbk is the only one that has Ba rating in term of product portfolio, because it
also sell processed product like cooking oil, margarine, etc. unlike other companies that
only sell crude palm oil, palm kernel, and its derivatives.
The aspect used to measure the earning stability includes operating margins. PT BW
Plantation Tbk, PT Gozco Tbk, PT Astra Agro Lestari Tbk, and IJM Plantations Berhad
from Malaysia get a high score rate, Aa, which means that they have operating margins
more than 15 percent. IJM Plantations Berhad leads with the highest percentage, 33
percent. Univanich Palm Oil PCL from Thailand is in the next rank with score Baa followed
by PT Provident Agro Tbk with the same score.
4.3.3 Financial Policy
The financial policy of each company is based on the annual report. It considered financial
risk as one of the factor which can be read in the annual report of each company.
4.3.4 Leverage and Coverage
In overall leverage and coverage factor, IJM Plantations Berhad has the best condition. It
gets straight Aa for all sub factor. It means that this company can manage their debt
payment and coverage. PT Astra Agro Lestari Tbk is in the second position of this factor.
It gets Aa in two sub factors and gets A in other two sub factors.
5. Summary and Conclusions
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PT Astra Agro Lestari Tbk doens’t always has the best condition in all aspect of financial.
It can be seen in the result of some aspect in the Compound Annual Growth Rate of the
financial ratios analysis. PT Astra Agro Lestari has a declining growth in liquidity ratios
which is the worst among all. Besides that, the performance of its growth in debt ratios
also is the worst compared to other companies. The activity ratio of PT Astra Agro Lestari
Tbk especially in the average collection period is the best and it needs to be maintained to
keep the good performance in hand. For the profitability and market ratio, PT Astra Agro
Lestari Tbk is not considered neither as the best nor the worst.
The same result happen in DuPont System of Analysis which shows that PT Astra Agro
Lestari Tbk only be in the second rank compared to the companies in Indonesia, beaten
by PT Sawit Sumbermas Sarana Tbk since 2012, and also be beaten too by the
Thailand’s company, Univanich Palm Oil PCL.
But after all, the rating of Moody’s measurement shows that PT Astra Agro Lestari Tbk
has the highest rating, Baa3. Even this company still in the first rank compared to the
companies from Malaysia and Thailand. PT Astra Agro Lestari Tbk has a good condition
in all factors of this methodology although it doesn’t always be the best in each sub
factors.
PT Astra Agro Lestari Tbk should do some improvement to rises their performance. They
can decrease the current liabilities by paying off the debt to improve their liquidity ratio.
Besides that, paying the debt also can lower the debt ratios. It is also important to
generate more revenue to get higher profit so it can increase the number of its profitability
ratios.
References
Gitman, L. And Zutter, C. (2009) Principles of Managerial Finance, 12th edition, New York:
Pearson.
Ross, S., Westerfield, R. and Jaffe, J. (2010) Corporate Finance, 9th edition, New York:
McGraw-Hill/Irwin.
Moody’s Investors Service, (2014) Moody’s Corporate Finance-Global Agriculture
Cooperative Industry.
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