Proceedings of the 1st International Conference on Finance Economics and Business, ICOFEB 2018, 12-13 November 2018, Lhokseumawe, Aceh, Indonesia

Research Article

Financial Performance Assessment of LQ45 Companies using DuPont Analysis during the Period of 2013-2017

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  • @INPROCEEDINGS{10.4108/eai.12-11-2018.2288764,
        author={Muhammad  Fuad and Rini  Mastuti and Rita  Meutia and Cici  Syaila},
        title={Financial Performance Assessment of LQ45 Companies using DuPont Analysis during the Period of 2013-2017},
        proceedings={Proceedings of the 1st International Conference on Finance Economics and Business, ICOFEB 2018, 12-13 November 2018, Lhokseumawe, Aceh, Indonesia},
        publisher={EAI},
        proceedings_a={ICOFEB},
        year={2019},
        month={10},
        keywords={lq45 dupont analysis roe npm tato em},
        doi={10.4108/eai.12-11-2018.2288764}
    }
    
  • Muhammad Fuad
    Rini Mastuti
    Rita Meutia
    Cici Syaila
    Year: 2019
    Financial Performance Assessment of LQ45 Companies using DuPont Analysis during the Period of 2013-2017
    ICOFEB
    EAI
    DOI: 10.4108/eai.12-11-2018.2288764
Muhammad Fuad1,*, Rini Mastuti2, Rita Meutia1, Cici Syaila1
  • 1: Department of Management, Faculty of Economics, Universitas Samudra Kampus Meurandeh, Kota Langsa, Indonesia
  • 2: Department of Agribusiness, Faculty of Agriculture, Universitas Samudra Kampus Meurandeh, Kota Langsa, Indonesia
*Contact email: muhammadfuad@unsam.ac.id

Abstract

The financial performance of a listed company will affect the market sentiment on the company. Therefore, financial performance needs to be assessed periodically and in detail. The study aims to assess the financial performance of LQ45 listed companies using DuPont analysis, which provides an in-depth review by decomposing Return of Equity (ROE). 34 companies are selected purposively as samples, and secondary data is sourced from the financial statements for the period of 2013-2017. Results showed the majority of LQ45 companies had relatively poor performance based on ROE, which was attributed to the value of profit margin, total assets turnover, and equity multiplier that fluctuates. It is recommended the company should increase its asset productivity in generating business profit through increased sales. Government interventions to create a conducive business environment are also needed.