Comparative Analysis of Financial Ratios and Economic Value Added Methods in Assessing Company Financial Performance

DOI

10.2991/aebmr.k.200309.031How to use a DOI?

Keywords

financial ratios, economic value added, financial performance

Abstract

This study aims to compare between financial ratios and methods of economic value added (EVA) as a measure of a company’s performance. The data used in this study are quantitative data with data collection techniques through documentation and this research is comparative in nature. The object of this research is PT. Garuda Indonesia, Tbk, which was listed on the Indonesia Stock Exchange for the period 2013-2017. The results of the study explained that the results of the financial performance of PT. Garuda Indonesia Tbk during the 2013-2017 period measured by the overall financial ratio can be said to be quite good, although there are still some fluctuating ratios. Whereas financial performance is assessed using the Economic Value Added (EVA) method which results in a negative result (EVA <0), which means that the company is unable to produce added value for shareholders. The results of the comparison of the two methods explain that there are differences caused by capital costs that are not taken into account in the analysis of financial ratios.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Nelli Novyarni
AU  - Lavita Nur Ayu Ningsih
PY  - 2020
DA  - 2020/03/12
TI  - Comparative Analysis of Financial Ratios and Economic Value Added Methods in Assessing Company Financial Performance
BT  - Proceedings of the Annual International Conference on Accounting Research (AICAR 2019)
PB  - Atlantis Press
SP  - 137
EP  - 142
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200309.031
DO  - 10.2991/aebmr.k.200309.031
ID  - Novyarni2020
ER  -