INTAN SISTADYANI

117111466 / MANAGEMENT IC

1. ANALYSIS OF RATIO BANK BCA

a. Capital Adequacy Ratio (CAR)
The bank capital ratio from the capital adequacy ratio (CAR) which focuses on the
ability to manage credit, market risk, and operational risk. In 2017, BCA's CAR was
23.1%, or far above the Bank Indonesia regulatory requirements of at least 8%. The
achievement of CAR in 2017 is higher than in 2016 which was 21.9%. This reflects the
ability of BCA to expand its business and be able to protect against the risk of loss.
Rasio modal perbankan diukur dari rasio kecukupan permodalan (CAR) yang
mencerminkan kemampuan untuk mengelola risiko kredit, risiko pasar, dan risiko
operasional. Pada tahun 2017, CAR BCA sebesar 23,1%, atau jauh diatas ketentuan
regulator Bank Indonesia yang minimal sebesar 8%. Pencapaian CAR di tahun 2017
tersebut lebih tinggi dibanding tahun 2016 sebesar 21,9%. Hal ini
mencerminkan kemampuan BCA untuk melakukan ekspansi bisnisnya dan mampu
melindungi dari risiko kerugian.
b. Return on Assets (ROA)
In 2017, BCA's ROA was 3.9%, down compared to 2016 by 4.0%. This figure has more
than doubled to meet Bank Indonesia standards, which is a minimum of 1.5%. This
shows the ability of Bank BCA in bank management and making a very good profit.
Pada tahun 2017, ROA BCA sebesar 3,9%, turun dibanding tahun 2016 sebesar 4,0%.
Angka tersebut sudah lebih dari 2 kali lipat memenuhi standar Bank Indonesia yaitu
sebesar minimum 1,5%. Hal ini menunjukan kemampuan Bank BCA dalam
manajemen bank dan memperoleh keuntungan sudah sangat baik.
c. Return on Equity (ROE)
BCA posted a Return on Equity (ROE) of 19.2% in 2017, a decline compared to 2016
of 20.5%. This figure has met Bank Indonesia's standards above the minimum ROE of
12%, this shows that Bank BCA is already good in generating a return on its equity.
BCA membukukan Return on Equity (ROE) sebesar 19,2% pada tahun 2017, menurun
dibanding tahun 2016 sebesar 20,5%. Angka tersebut sudah memenuhi standar Bank
Indonesia diatas batas minimum ROE yaitu 12%, hal ini menunjukan bahwa Bank BCA
sudah baik dalam dalam menghasilkan laba atas ekuitas yang dimilikinya.
d. Beban Operasional Terhadap Pendapatan Operasional (BOPO)
 The 2017 BOPO ratio was 58.6%, down slightly from 2016 which was 60.4%. BCA's
BOPO ratio is still below the banking industry average, which is at a maximum limit
of 92%. Based on the discussion of the aforementioned ratios, BCA has sufficient
ability to pay liabilities because profitability continues to increase and the level of
efficiency is maintained.
Rasio BOPO tahun 2017 sebesar 58,6%, turun sedikit dari tahun 2016 sebesar 60,4%.
Rasio BOPO BCA masih dibawah rata-rata industri perbankan yaitu di batas
maksimum 92%. Berdasarkan pembahasan rasio-rasio tersebut di atas, BCA memiliki
kemampuan yang memadai untuk membayar kewajiban karena profitabiltas yang terus
meningkat dan tingkat efisiensi yang terjaga.

2. FIVE C OF CREDIT ANALYSIS

The five Cs of credit is a system used by lenders to gauge the creditworthiness of potential
borrowers, consisting of a quintet of characteristics.
Character

 This is the part where the general impression of the protective borrower is analysed.
The lender forms a very subjective opinion about the trust – worthiness of the entity to
repay the loan. Discrete enquires, background, experience level, market opinion, and
various other sources can be a way to collect qualitative information and then an
opinion can be formed, whereby he can take a decision about the character of the entity.

Capacity

 Capacity refers to the ability of the borrower to service the loan from the profits
generated by his investments. This is perhaps the most important of the five factors.
The lender will calculate exactly how the repayment is supposed to take place, cash
flow from the business, timing of repayment, probability of successful repayment of
the loan, payment history and such factors, are considered to arrive at the probable
capacity of the entity to repay the loan.

Capital

 Capital is the borrower’s own skin in the business. This is seen as a proof of the
borrower’s commitment to the business. This is an indicator of how much the borrower
 is at risk if the business fails. Lenders expect a decent contribution from the borrower’s
own assets and personal financial guarantee to establish that they have committed their
own funds before asking for any funding. Good capital goes on to strengthen the trust
between the lender and borrower.

Collateral (or Guarantees)

 Collateral are form of security that the borrower provides to the lender, to appropriate
the loan in case it is not repaid from the returns as established at the time of availing
the facility. Guarantees on the other hand are documents promising the repayment of
the loan from someone else (generally family member or friends), if the borrower fails
to repay the loan. Getting adequate collateral or guarantees as may deem fit to cover
partly or wholly the loan amount bears huge significance. This is a way to mitigate the
default risk. Many times, Collateral security is also used to offset any distasteful factors
that may have come to the fore-front during the assessment process.

Conditions

 Conditions describe the purpose of the loan as well as the terms under which the facility
is sanctioned. Purposes can be Working capital, purchase of additional equipment,
inventory, or for long term investment. The lender considers various factors, such
as macroeconomic conditions, currency positions, and industry health before putting
forth the conditions for the facility.

Credit is an integral part of the modern economy and the global financial system. The
expansion of credit has been a major contributing factor to global economic development and
is often described as the lifeblood of the economy. Access to credit has facilitated GDP
expansion through an increase in consumption and the allocation of resources to productive
purposes. It has also helped to improve the efficiency and profitability of business by enabling
access to funding for things like expansion, capital expenditures, research and development,
and staffing. In this environment, investors are inevitably faced with tremendous amounts of
potential bond offerings from companies seeking funds to perform various activities. Before
purchasing corporate bonds, savvy investors typically undertake credit analysis to determine
whether the company has the financial ability to meet its obligations. Failure to perform
adequate credit analysis can potentially expose investors to significant losses.

It is critical to carefully analyze each company and the particulars of its debt offering before
deciding whether to purchase. Effective credit analysis is essential for investors seeking to
determine whether a company has the financial ability to meet its financial obligations.
Understanding and applying the five Cs of credit analysis provides investors with a practical
and effective framework for assessing the creditworthiness of a corporate issuer. This
framework includes an analysis of capacity, collateral, covenants, character, and credit rating.
While by no means a guarantee against default, credit analysis involving the five Cs can help
to manage default risk.

3. What Is the Direct Method?

The direct method is one of two accounting treatments used to generate a cash flow statement.
The statement of cash flows direct method uses actual cash inflows and outflows from the
company's operations, instead of modifying the operating section from accrual accounting to a
cash basis. Accrual accounting recognizes revenue when it is earned versus when the payment
is received from a customer.

Conversely, the cash flow direct method measures only the cash that's been received, which is
typically from customers and the cash payments or outflows, such as to suppliers. The inflows
and outflows are netted to arrive at the cash flow. The direct method is also known as the
income statement method.

Under the direct method, the only section of the statement of cash flows that will differ in the
presentation is the cash flow from the operations section. The direct method lists the cash
receipts and cash payments made during the accounting period. The cash outflows are
subtracted from the cash inflows to calculate the net cash flow from operating activities, before
the net cash from investing and financing activities are included to get the net cash increase or
decrease in the company for that period of time.
What Is the Indirect Method?
The indirect method is one of two accounting treatments used to generate a cash flow statement.
The indirect method uses increases and decreases in balance sheet line items to modify the
operating section of the cash flow statement from the accrual method to cash method of
accounting.

The cash flow statement primarily centers on the sources and uses of cash by a company, and
it is closely monitored by investors, creditors, and other stakeholders. It offers information on
cash generated from various activities and depicts the effects of changes
in asset and liability accounts on a company's cash position.

The indirect method presents the statement of cash flows beginning with net income or loss,
with subsequent additions to or deductions from that amount for non-cash revenue and expense
items, resulting in cash flow from operating activities.

I prefer to use the direct method method to disclose the reconciliation of net income to the cash
flow from operating activities that would have been reported if the indirect method had been
used to prepare the statement. The reconciliation report is used to check the accuracy of the
operating activities, and it is similar to the indirect report. The reconciliation report begins by
listing the net income and adjusting it for non-cash transactions and changes in the balance
sheet accounts. This added task makes the direct method unpopular among companies.

4. A break-even analysis helps illustrate the relationship between profits, revenues and
costs

A break-even analysis helps determining the number of product units that need to be sold for a
business to be profitable knowing the price and the cost of the product.If the fixed costs are
greater than zero, then it is important to have a positive contribution margin per unit (i.e.
price>variable costs) to reach a break-even point at all.
Because of the positive contribution margin, the slope of the revenue line is steeper than the
slope of the total costs line. Therefore, revenue per unit is higher than cost per unit. If there
were no fixed costs, then obviously the business would be profitable from the beginning. In the
example shown above, the costs involved when zero units are sold are the fixed costs only.
To cover these fixed costs, the business needs to sell a certain number of units to reach
this break-even point or cover the fixed costs.