INTERPRETING

FINANCIAL STATEMENTS

Accounting For Managers C

Management Study Program, Faculty of Business and Economics,

Universitas Atma Jaya, Yogyakarta
Laporan
Tahunan
ANNUAL
Who is required to prepare an annual report?
All public companies are required to prepare an annual
report. The annual report must be reproduced and available
REPORT in both print and electronic form. (Article 2 & 3 POJK No.
29/2016)
The Annual Report contains at least:
1. Financial overview.
2. Information about shares (if any)
3. Report of the directors.
4. Board of commissioners report.
5. Company profile
6. Management analysis and discussion.
7. Corporate governance.
8. Social and environmental responsibility.
9. Audited financial statements,
10. Statement of the board of directors and board of commissioners.
 1. Must understand the business context.
2. Annual reports and website information are indeed information for
Annual Report Context the public, but additional information is needed to understand and
interpret them.
3. Additional information: news in newspapers, statistical data from
BPS, annual review from a consulting firm, credit rating from a credit
rating agency, personal experience.

Financial Ratio Analysis

1. An essential tool for analyzing financial reports.
2. Usually the comparison of two numbers, in the form of a
Understanding percentage.
Financial 3. To see trends from year to year, you can also compare with
Statements competitors, or compare with company targets.
4. To see the trend of at least 5 years.
5. Financial reports are usually in the form of consolidated reports
6. Types of financial ratios: Profitability ratios, Liquidity ratios,
Solvency/leverage/gearing ratios, Activity ratios, Investment ratios
 Financial Statement
• Income Statement
• Balance Sheet / Statement of Financial Position
• Statement of Owner’s Equity
• Statement of Cashflow

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-4
 Liquidity Ratio
Consist Current Ratio (CR)
By

Acid Test Ratio (Quick Ratio) - QR

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-5
 Comparison with Peer Group – Liquidity Ratio

Ratio Harley Davidson Peers Good / Bad

Current Ratio (CR) 2,09 1,50 Good

Quick Ratio (QR) 1,87 1,06 Good

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-6
 Activity Ratio
Consist Average Collection Period (ACP)
By
Account Receivable Turnover (ART)
Inventory Turnover (ITO)

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-7
 Comparison with Peer Group – Activity Ratio

Ratio Harley Davidson Peers Good/Bad

Average Collection Period 83,9 days 75 days Bad

(ACP)
Account Receivable 4,35 4,87 Bad
Turnover (ART)
Inventory Turnover (ITO) 12,25 5,78 Good

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-8
 Solvability Ratio
Consist
By Debt Ratio (DR)

Time Interest Earned (TIE)

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-9
 Comparison with Peer Group – Solvability Ratio

Ratio Harley Davidson Peers Baik / Buruk

Debt Ratio (DR) 42% 58% Good

Time Interest Earned (TIE) 50,2 x 3,93 x Good

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-10
 Profitability Ratio
Consist Operating Return on Asset (OIROA)
By Operating Profit Margin (OPM)
Total Asset Turnover (TATO)
Fixed Asset Turnover (FATO)
Return on Asset (ROA)
Return on Equity (ROE)

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-11
 Comparison with Peer Group – Profitability
Ratio
Ratio Harley Davidson Peers Baik / Buruk

Operating Return on 23% 9,8% BAIK

Asset (OIROA)
Operating Profit Margin 21% 8,3% BAIK
(OPM)
Total Asset Turnover 1,09 1,18 BURUK
(TATO)
Fixed Asset Turnover 4,06 4,26 BURUK
(FATO)
Return on Asset (ROA) 15% 10% BAIK

Return on Equity (ROE) 26% 12% BAIK

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-12
 Investment
Ratio
Mengukur seberapa
efektif perusahaan
memanfaatkan segala
sumber daya yang
We must to know:
dimiliki.
1. Number of shares
outstanding
2. Share price
 ASSIGNMENT
1. Choose a company that is already listed on the Indonesian stock
exchange (access :
https://www.idx.co.id/perusahaan-tercatat/laporan-keuangan-dan-tahunan
/
)

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-14
 ASSIGNMENT
1. Choose a company that is already listed on the Indonesian stock
exchange (access :
https://www.idx.co.id/perusahaan-tercatat/laporan-keuangan-dan-ta
hunan/
)
2. Download company financial reports for 2021 and 2022
3. Analyze the financial statements based on the ratios we have
studied
4. Compare financial performance in 2021 and 2022 based on the
results of your calculations

Business Statistics, A First Course (4e) © 2006 Prentice-Hall, Inc. Chap 4-15
- Format : Ms Word
- Work together in group that consist by 4-5 student
- All groups have to select and analyze different companies
- Due date : see on LMS
SEE YOU NEXT WEEK!!