Journal of Taxation.
Accounting.
Management and Economics.
Vol 2 Issue 1.
January 2024
e-ISSN: 2988-7097
p-ISSN: 2988-7089
FINANCIAL PERFORMANCE ANALYSIS OF INDONESIAN
TELECOMMUNICATION COMPANY
Eko Agus Setiawan Department Master of Management.
Universitas Sarjanawiyata Tamansiswa.
Indonesia, mm@gmail.
Corresponding author: ekoagussetiawan.
mm@gmail.
Abstract: This study thoroughly examines the financial performance of four leading telecommunications companies in Indonesia.
Telkom Indonesia (TLKM).
XL Axiata (EXCL).
Smartfren (FREN), and Indosat (ISAT) over the period 2021Ae2022.
analyzing financial performance using financial ratios such as leverage ratio (DAR.
DER) and profitability (NPM.
ROA.
ROE), it can be seen that Telkom Indonesia experienced a decrease in debt ratio and a decrease in profitabi lity.
XL Axiata saw an improvement in its debt ratio but also experienced a considerable decline in profit.
Smartfren showed a decrease in its debt ratio and a significant increase in profitability.
Indosat had a combination of changes in profitability and a decrease in debt ratio.
These findings emphasize the importance of organizations prioritizing efficient debt management and strategic initiatives to improve profitability in the changing telecommunications sector.
Keywords: Financial Performance.
Leverage Ratio.
Profitability Ratio.
Ratio Analysis.
INTRODUCTION
Telecommunication companies in Indonesia play an important role in providing communication and inf ormation technology services (Setiawan et al.
, 2.
Telecommunications is a vital sector in the technological and economic development of a country.
This study aims to analyze the f inancial perf ormance of Indonesian telecommunication companies, f ocusing on the debt ratio and prof itability ratio.
Telecommunication companies operate in a dynamic and complex environment, particularly due to rapid technological advancements.
These f actors create signif icant f inancial challenges f or companies, which require a thorough evaluation of their f inancial perf ormance.
In this case, the use of leverage ratio and prof itability ratio becomes relevant in measuring the f inancial ef f iciency and competitiveness of Indonesia companies, ranging f rom government-owned companies like PT Telkom Indonesia (Perser.
Tbk, which is also a state-owned enterprise (BUMN), to government-owned but not majority-owned companies like PT Indosat Tbk, and privately-owned companies like PT Smartf ren Telecom Tbk.
PT XL Axiata Tbk .
PT First Media Tbk.
PT Link Net Tbk, and others (Putri & Hermuningsih, 2.
The main objective of this study is to analyze f inancial perf ormance using the leverage ratio and prof itability ratio in telecommunication companies listed on the Indonesia Stock Exchange during the 2021-2022 period.
The research subjects are companies that provide mobile communication networks, namely PT Telkom Indonesia (Perser.
Tbk (TLKM).
PT XL Axiata (EXCL).
PT Indosat Tbk, and PT Smartf ren.
This research will use a quantitative descriptive data analysis approach with f inancial perf ormance data obtained f rom the annual f inancial statements of telecommunications companies listed on the Indonesia Stock Exchange.
The data will be analyzed The ratios that will be examined in this study are leverage ratios, namely debt to equity ratio (DER) and debt to assets ratio (DAR), as well as prof itability ratios, namely return on equity (ROE), net prof it margin (NPM), and return on assets (ROA).
These ratios will be calculated and compared to evaluate f inancial perf ormance.
Journal of Taxation.
Accounting.
Management and Economics.
Vol 2 Issue 1.
January 2024 Several previous similar studies (Khalif ah & Siswanti, 2.
The research f ocuses on doing a comparative analysis titled "Comparative Analysis of Financial Perf ormance between PT.
XL Axiata Tbk and PT.
Indosat Tbk using Current Ratio.
Return on Equity, and Debt to Equity Ratio f or the period 2017-2021.
" Furthermore, another study also conducts a comparative analysis or perf ormance comparison (Deprianti et al.
, 2.
Furthermore, several other studies with dif f erent research subjects (Azizah et al.
Deprianti et al.
, 2023.
Melenia et al.
, 2023.
Novia et al.
, 2.
This comparative analysis of f inancial perf ormance aims to provide valuable insights f or stakeholders, such as company management, investors, and capital market regulators.
These insights will help them make inf ormed decisions regarding inv estment and risk management in the telecommunications sector.
LITERATURE REVIEW
Financial Performance Financial statements provide a means to assess the f inancial perf ormance of a The f inancial ratios used in this study include liquidity ratios, activity ratios, prof itability ratios, and solvency ratios(Firdaus & Dara, 2.
Financial perf ormance evaluation is the process of assessing the ef f ectiveness of operations, organisation, and employees based on predetermined objectives, standards, and criteria on a periodic basis according to Srimindarti .
in (Mangkona et al.
, 2.
Financial Ratio Analysis According to Harahap .
in the study conducted by Mangkona et al.
Financial Ratio Analysis is a f igure obtained f rom comparing one item in the f inancial statement with another item that has relevant and signif icant .
eaningf u.
Financial ratio analysis is one method used to evaluate the perf ormance of a company in both the past and present.
The results of f inancial ratio analysis can be utilised to assess the f inancial position and business growth of a company (Setyawan et , 2.
In the study Setyawan et al.
, .
, f inancial ratios are a method of calculation using f inancial statements as a tool to assess the f inancial condition and perf ormance of a company.
These ratios are obtained by comparing one f inancial statement with another, where there is a relevant and signif icant relationship between 1 Various Types of Ratios Financial Ratios According to Rita et al.
in Setyawan et al.
, there are f our types of f inancial ratios (Setyawan et al.
, 2.
The Liquidity Ratio is a ratio that indicates a company's ability to meet short-term The activity ratio is a f inancial ratio that measures how well a company manages its Solvency ratio .
is a ratio used to measure the extent to which a company's assets are f inanced by debt, both in the short term and long term.
Prof itability ratio.
Prof itability ref ers to a company's ability to generate prof it f rom the capital used to produce earnings.
RESEARCH METHOD
The type of research used by the researcher in this study is descriptive quantitative research with comparative analysis.
Comparative research involves the examination and comparison of two or more objects or entities (Priyono, 2.
in (Setiawan et al.
Within this study, the researcher will compare the f inancial perf ormance of telecommunications companies listed on the Indonesian Stock Exchange throughout the period of 2021Ae2022.
Researchers can download the available secondary data f rom the Indonesia Stock Exchange website in the f orm of annual reports.
The research f ocuses on telecommunications companies and companies that provide cellular telecommunications networks, such as PT.
Telkom.
PT.
XL Axiata.
PT.
Indosat, and SmartFreen.
The analysis of ratios used includes leverage ratios, including the debt-toequity ratio and the debt-to-asset ratio.
Furthermore, the analysis includes the use of Journal of Taxation.
Accounting.
Management and Economics.
Vol 2 Issue 1.
January 2024 prof itability ratios such as net prof it margin, return on equity, and return on assets.
RESULTS AND DISCUSSION
Financial Ratio Results The results of the research conducted, obtained the results of the leverage ratio and prof itability ratio of Telkom.
XL.
Indosat and Smartf reen companies in the f ollowing Tabel 1.
Financial Ratio Result
KODE COMPANY
CODE
THE
YEAR
LEVERAGE RATIO
DAR
DER
PROFITABILITY RATIO
NPM
ROA
ROE
TLKM
TLKM
EXCL
EXCL
FREN
FREN
ISAT
ISAT
Source: Processed Data During the period 2021 to 2022.
Telkom Indonesia (TLKM) experienced a decrease in the debt ratio with the Debt to Asset Ratio (DAR) decreasing f rom 47 to 45 and the Debt to Equity Ratio (DER) decreasing f rom 90 to 84.
However, the company's prof itability also decreased with Net Prof it Margin (NPM) f alling f rom 23 to 18.
Return on Assets (ROA) increasing f rom 10 to 12, and Return on Equity (ROE) f alling f rom 23 XL Axiata (EXCL) showed improvement in its debt ratios, with DAR f alling f rom 72 to 70 and DER dropping f rom 262 to 239.
However, the company's prof itability declined, particularly NPM which dropped f rom 5 to 4.
ROA f rom 1.
79 to 1.
34, and ROE f rom 49 to 4.
Smartf ren (FREN) saw a decline in its debt ratios, with DAR f alling f rom 71 to 67 and DER f alling f rom 243 to 195.
FREN's prof itability improved signif icantly, especially NPM which rose f rom -4 to 10.
ROA f rom -0.
94 to 2.
34, and ROE f rom -3.
24 to 6.
Indosat (ISAT) showed a decrease in debt ratios, with DAR f alling f rom 84 to 72 and DER f alling f rom 515 to 260.
ISAT's prof itability showed mixed changes, with NPM f alling f rom 22 to 11.
ROA increasing f rom 10.
92 to 4.
72, and ROE f alling f rom 67.
CONCLUSIONS
The comprehensive evaluation of the f inancial perf ormance of f our Indonesian telecommunication companies, specif ically Telkom Indonesia (TLKM).
XL Axiata (EXCL).
Smartf ren (FREN), and Indosat (ISAT), f rom 2021 to 2022, reveals a range of patterns and dynamics.
Telkom Indonesia's debt ratio decreased, while its prof itability exhibited a downward trend.
Conversely.
XL Axiata saw an enhancement in its debt ratio but encountered a substantial decrease in prof itability levels.
Smartf ren's prof itability had a notable surge, even if its debt ratios were lower.
Indosat demonstrates f luctuating prof itability perf ormance, despite a decrease in some debt ratios.
Ultimately, these organisations must prioritise debt management and prof itability initiatives in order to enhance their f inancial perf ormance in the f ace of the evolving dynamics of the telecoms market.
Journal of Taxation.
Accounting.
Management and Economics.
Vol 2 Issue 1.
January 2024
REFERENCE