Profit Phenomenon in PT Semen Padang (An exploratory case study of PT Semen Padang's Performance in 2004 - 2006 using Economic Value Added Aproach).

Putri, Andina Dharma (2010) Profit Phenomenon in PT Semen Padang (An exploratory case study of PT Semen Padang's Performance in 2004 - 2006 using Economic Value Added Aproach). Other thesis, Fakultas Ekonomi.

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Abstract

PT. Semen padang as a cement producer amongst the Top Four Company in the cement industry in Indonesia has successfully weathered the critical years in the company's history and achieved improvement in production efliciency itrat is shown by almost l00 % profit growth per year from 2004 to 2006. This is shown in the company annual report in 2004 - 2006. This profit phenomenon becomes interesting to be researched because all achievements claimed is based on the accounting profit, while in many cases accounting profit does not really explain whether the company created value to the share holders or not. Therefore it is interesting to dig into this phenomenon though the economic profit point of view using Economic Value Added. As an exploratory study, this research focuses on collecting all the financial data related to the profit Phenomenon, aimd to describe the profit phenomenon using EVA approach. The results of this research are (l) the profit phenomenon happened mainly because of the outstanding performance of the PT Semen Padang's management that were able to generate higher earnings with lower invested capital by operating more efficiently year by year, proved by extreme increase in EVA year by year (142.05% in 2004 to 2005, and 495.33% in 2005 to 2006) (2) However, PT Semen Padang snowe6 negative EVA result in 2004 for a quite significant number (43,979,928), that means PT Semen padang destroyed value for the shareholders that year, which proved that the accounting profit does not mean a company has an economic profit, (3) PT Sernen Padang used more Equity as the source of fund, while the Cost of Equity is a lot more expensive than the Cost of Dobt. PT Semen Padang could have created more vaiue to the shaneholders if it had a more cost-efficient capital structure

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