FIRM PERFORMANCE AND GROWTH RATE ANALYSIS

Mohammad Abdul Mukhyi¹

Tati Sunarti²

Yoga Wihartanto³

^1,2,3 Fakultas Ekonomi, Universitas Gunadarma

mukhyi@staff.gunadarma.ac.id

ABSTRACT

In the era of globalization and modernization, companies either large or small scales need to be competitive. Firms’ performance analysis is of importance to various parties such as investors, creditors, governments, and the management itself. Since the primary objective of a firm is to maximize the value of the firm, analyzing its financial performance is important. The purposes of this study are (1) to analyze the performance of 45 firms listed at the Indonesia Stock Exchange using EVA, MVA and Z-SCORE and (2) to determine the growth rate of values of these firms using FGV method. Using EVA methods, financial performance of 45 firms representing nine industrial sectors during the period of 2006 and 2007were found to be satisfied. However, based on MVA methods, financial performance of these firms were, to some extent, poor. In addition, it was found that the firms’ stock market values were fluctuated. There were 19 firms which have negative MVA in the two consecutive years and there are 12 firms that have negative MVA in just one year. Firms that have positive MVA in the two years period were 11. Using Z-Score method financial performance of the studied firms was poor. Firms which have negative Z-Score in the two consecutive years and tend to go bankrupt were 14. Meanwhile, only two firms which have Z-Score below the standard value but were able to increase its Z-Scores in the year 2007. The remaining firms have Z-Score above the standard value.  Using FGV method, it was found that there were 22 firms that have FGV lower than that of FGV corporate managements of each associated sectors. Eight of these were found to have negative FGV indicating that there were no corporate value growths. The remaining firms were having very good FGVs. It can concluded that based on the analysis using EVA, MVA, Z-Score and FGV, there were 10 firms that can be categorized as the best performance, where five of which have a very good performance and have firms’ value growth rate exceed each associated sector indices.

Keywords: EVA; MVA; Z-Score; FGV.