Managerial Finance

Lecture : Subiakto Soekarno MBA, CFP

Hp : 0811203116

Reference : CorFin and Principle of Managerial Finance

Why do We learn Finance ?

Finance is the busines language -> to measure and manage performance. As the art and science of
managing money.

Profit Vs Cash ?

Cash is more realistic -> profit it doesn’t meant a cash. Principle : Accrual basis Vs Cash Basis

Accrual -> we are matching the revenue and the cost regardless of the cash transaction.

Cash more important -> to fulfill your responsibilities like for expenses, paid dividend, bills, etc. (more
liquidity processes) – Blood of Business

Four Important Decisions in Corporate Finance :

1. What to Invest – Investing Decisions (Fixed Asset – Balance Sheet) . Real case : make CapEx
(Capital Expenditure for investing decision)
2. Financing Decision – using your own money ? Payable ? or combination ?
3. Dividend Decision – What will you do after got a profit ? – trowing back to the company or
there are split that to dividen paid for share holders.
Asking finance ? – is it growth for asset or not ? – free cash to dividend. In reality : decide – Pay
Low or High Dividend. Looking for the company size – if it is still small group -> need more
money to support their growth -> become mature. (Unilever : 100% profit to dividend,
Telkom:70%)
4. Short-Term Asset and Short-Term Liability Decision (cash, A/R, Inventory Vs Acc. Payable).
Remember that : increasing inventory will be affected to risk of lossing money. Please don’t
spend your money to build a big house of inventory. CA-CL = Working Capital
“A/R – A/P analysis : partly finance by supplier -> received vs spend the money”

Arti WC lebih kecil : modal zero – keputusan penting diambil dari supplier dalam memenuhi kebutuhan
customer. Spt carrefour : mendapatkan cash secara langsung, namun untuk pembayaran masih memiliki
waktu selama beberapa hari kemudian.

What is The Goal of The Firm ?

- Maximize Profit ? – is it good to increase your employee salaries ? -> think about moral and long
term company
- Minimize Cost ? – don’t pay your employee salaries ? -> “paid vs performance”
cutting the cost will be affected to reduce the moral -> finding the root cause of the problem
- In context : maximize shareholder wealth ? – measurement : stock price & company value

“make sure what ever you do –creating value”

Stock Price : nowadays price that prospect for the future value of money

Gojek – making exponential story -> based on growing of active users

Legal Forms of Business Organization :

1. Sole proprietorship – one person, own profit, own asset, and limited resources. Tax : 0.5 % only
2. Partnership – two or more people and operated for profit
3. Corporation – entity created by law

AGENCY PROBLEM AND ASSYMETRIC INFORMATION

Principal vs Agent ? . Principal = owner & Agent = manager approached by owner

Small Company Big Company

Owner = Principal = Agent Principal ≠ Agent
Objective nya sama Principal : max shareholder wealth. Agent (BOD) :
max his own facilities. Sehingga perlu
diselaraskan menjadi tujuan bersama. Solusinya :
diberikan saham perusahaan / Profit sharing to
motivate the employee more compentent to
work. (ESOP), incentives or bonuses

DEBT OR EQUITY ?

ROE = Profit/Equity (modal)

Konsep leverage -> meningkatkan pendapatan dengan peminjaman lain, apabila ada potensi kenaikan
harga asset dimasa yang akan datang.

Real life though : perlu diperhatikan sebelum mengambil keputusan, karena harus berfikir untuk melihat
setiap resiko yang akan dihadapi dan yang harus ditanggulangi

Debt can be very beneficial If we know How to use it and Will gie a greater ROE (Leverage)

BLBI (Bantual Likuiditas Bank Indonesia)

Terkadang -> employee berusaha meng-set standar untuk bisa achieve seolah2 diatas yang ditetapkan.
Padahal memang dari awal dia berusaha menetapkan standar rendah yg semestinya dia mampu
mengejerjakan lebih agar terlihat bagus.
Financial Statement

1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Equity Changing
5. Supplementary Notes – perubahan kebijakan dalam kegiatan transaksi

Apabila dia rugi secara operating income , namun saat net income – sesudah pajak itu malah positif (krn
perbedaan) ? -> artinya dia bukanlah perusahaan bijak. Melainkan spt money changer.

Balance sheet ? -> artinya : kita melihat apa yang di sebelah kiri (asset) didapatkan dari mana ? (liat
sebelah kanan), dimana sumber2 aset bisa berasal dari own equity atau malah lebih banyak dari
liabilities (leverage)

Price to book value : artinya harga saham sebanding berapa dari book value (semakin besar, maka akan
semakin baik)

Case : Financial Detective -> Krakatau Steel (A) & (B) & Ch. 3 FSA