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E-ISSN: 2808-5051

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CAPITAL STRUCTURE ANALYSIS IN HEALTHCARE ISSUERS IN

THE DES CATEGORY FOR 2017-2019

Taufik Riyandi

, Setyo Riyanto

INTRODUCTION

One of the government programs focuses on improving the quality of the nation's health,

there is a demand gap between the direction of business and household (Consumption)

tendencies.

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Predictions of the economic outlook can be made using various analytical instruments,

including the Business Tendency Index (Indeks Tendensi Bisnis, ITB) and the Consumer

Tendency Index (Indeks Tendensi Konsumen, ITK). ITB provides an overview of economic

conditions in the current quarter and one quarter ahead according to the perception of

entrepreneurs (Diarga, 2020). Meanwhile, ITK provides an overview of economic conditions

the potential for the high demand for household consumption in ITK always leads to a trend

above the estimated direction of the ITB business, the great potential at this level of demand

makes a business opportunity to fulfill it. In addition, there is an increase in the trend of healthy

lifestyle sustainable, guarantees for health, increasing population growth, and strong industrial

potential amid a pandemic will have an impact on the increasing need for health services.

To seize this opportunity, healthcare companies need to increase production capacity and

in the end, the company needs capital for its operations with the support of appropriate

localization management so it is necessary to analyze the optimal capital structure to reduce

risks so that the company can maximize company value (Amdalena, 2021). According to

Achmad (2018), "The capital structure that can maximize the share price is a structure that can

company management goals (Suranto & Walandouw, 2017). Assessing companies, one of

which can be obtained using the stock valuation method which uses the concept of the time

value of money using Free Cash Flow (FCF) and discounting using the weighted average cost

of capital (WACC) to get optimal value in carrying out investments (Islami, 2020). The

objectives of the company's management can be achieved if the company's decision in

establishing its capital structure is optimal (Pantow et al., 2015). The establishment of an

optimal capital structure will bring good corporate value.

Studies that discuss the analysis of the optimal capital structure using WACC calculations

and company value have been carried out. Rahma et al. (2014) researched the analysis of

determining the optimal capital structure to increase the value of the company (study on PT.

company at PT. Astra Graphia Tbk for the 2013-2015 period and other research was also

1272 Interdisciplinary Social Studies, 1(10), Jul 2022

conducted by Yuliana & Wijayanti (2017) who analyzed the optimum capital structure of

cement industry companies listed on the IDX for the 2013-2015 period.

Based on the five studies, there is any inconsistency between the results of the previous

study which shows that capital structure, especially the cost of capital, does not always play an

important role in the size of the company's value. This condition encourages researchers to find

category listed on the IDX for the 2017-2019 period.

METHOD

The type of this research is descriptive research with a quantitative approach, where the

researcher will describe the determination of the optimal capital structure to increase company

value through the analysis of financial statements as a tool for the validity of the information.

There were a total of 11 companies in the pharmaceutical sub-sector that were the

population in this study. The sample from this study based on the purposive sampling method

to 8 companies, namely PT. Darya-Varia Laboratoria Tbk. (DVLA), PT. Indofarma Tbk.

(INAF), PT. Kimia Farma Tbk. (KAEF), PT. Kalbe Farma Tbk. (KLBF), PT. Merck Indonesia

calculation is done using Microsoft Excel 2016 software. The steps for data analysis in this

study are as follows:

1) Collecting data, namely financial statements and annual reports of pharmaceutical sub-

sector issuers listed on the DES of the Indonesia Stock Exchange for the 2017-2019

research period;

2) Calculating the relative valuation of the issuer's financial structure including DR, DER,

and LDER;

3) Calculates the cost of capital (COC) on the composition of the capital structure of the

enterprise. For the cost of debt, the cost of equity then calculates the weighted average

cost of capital (WACC);

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RESULTS AND DISCUSSION

Cost of Capital

Capital costs are costs that have been incurred because the company uses sources of funds

incorporated in the capital structure (Atiqoh & Asyik, 2016). The capital structure relates to

the company's permanent spending structure consisting of long-term debt, ordinary shares, and

as follows:

Table 1. Pharmaceutical Industry Debt Costs for the 2017-2019 Period

Debt Cost (𝑹

𝒅

DVLA

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The result of the calculation of the cost of debt after tax (RdT) is not found on the DVLA.

therefore, the implementation of the DVLA liquidity risk management policy from 2017-2019

is to maintain adequate liquid financial assets. DVLA's liquid financial assets (cash and cash

equivalents) exceed financial liabilities and DVLA does not have any loans subject to interest.

Therefore, DVLA does not have substantial exposure to liquidity risks that may arise from

increase in the company's operating debt caused by an increase in bank loans for the

establishment of a Large Volume Parenteral (LVP) factory in Eastern Indonesia as a follow-up

to the signing of the Joint Venture Business cooperation. Meanwhile, the increase in Rd in

2019 was due to the company getting approval for restructuring short-term to long-term loans

from PT Bank Mandiri (Persero) Tbk and PT Bank Negara Indonesia (Persero) Tbk for the

credit facilities provided by the two banks to the company. As a result of the change in loan

restructuring, it has led to a significant increase in long-term liabilities.

The results of the calculation of KAEF's cost of debt after tax (RdT) for the 2017-2019

period are relatively decreasing every year. RdT in 2017 was 4.25%, decreased in 2018 by

3.38%, and in 2019 increased by 3.80%. This is due to the cost of debt before tax (Rd) in 2017,

The results of the calculation of the cost of debt after tax (RdT) KLBF for the period 2017-

2019 are increasing every year. RdT in 2017 was 3.17%, increased in 2018 by 6.99%, and in

2019 increased by 12.82%. This is due to the cost of debt before tax (Rd) in 2017, 2018, and

2019 of 3.97%, 8.74%, and 16.02%, respectively. The Rd increase event in 2018 was due to

the company having long-term bank debt, namely investment loans denominated in Rupiah to

PT Bank Central Asia Tbk, MUFG Bank, and Citibank. To be given to a subsidiary, namely

PT. Saka, PT. Toedjoe Star, and PT. WE. The increase in Rd in 2019 was due to the same

activities carried out in 2018. The increase in the cost of debt (Rd) in 2017-2019 affected the

value of the cost of debt after tax or (RdT). The Rd value here is derived from the borrowing

costs contained in the company's financial statements consisting of interest costs and

and the shares are owned by at least 300 parties. Each Party may only own less than 5% of the

1275 Interdisciplinary Social Studies, 1(10), Jul 2022

total paid-up shares. These provisions must be fulfilled by Domestic Corporate Taxpayers in

the form of a Public Company within a minimum of 6 (six) months within 1 tax year.

The result of the calculation of the cost of debt after tax (RdT) is not found on the MERK.

Due to the implementation of the company's policy in managing MERK liquidity risk from

2017-2019, it is to maintain adequate liquid financial assets by conducting continuous

term bank debt for land acquisition of the Company's office, namely for the construction of the

Company's new office in Pagedangan, Tangerang Regency. The increase in Rd in 2019 was

due to the company's financial operations supported by Bank OCBC NISP which provided a

Demand Loan of Rp. 27,610,000,000,-. The company also received a Current Account loan

from Bank BCA in the amount of Rp. 4,900,000,000,-. Meanwhile, Bank OCBC NISP also

provided a loan of Rp. 8,415,000,000 in the form of a Term Loan which was used by the

company to buy a plot of land covering an area of 3,400 m

2

in Jakarta.

The result of the calculation of the cost of debt after tax (RdT) is not found in SIDO. Due

to the implementation of liquidity risk management policies from 2017-2019 where SIDO

mitigates liquidity risks by analyzing the availability of cash flows and funding structures so

that the performance produced can meet the funding of the company's operating activities for

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The results of the calculation of the cost of equity (Re) DVLA for the 2017-2019 period

have decreased relatively. In 2017 it was 7.89% an increase in 2018 by 8.01% and decreased

in 2019 by 1.90%.

The results of the calculation of INAF's cost of equity (Re) for the 2017-2019 period

increased. In 2017 it was 8.34% an increase in 2018 by 8.48% and an increase in 2019 by

by 3.86%.

The results of the calculation of the cost of equity (Re) of MERK for the 2017-2019 period

have decreased relatively. In 2017 it was 7.73% an increase in 2018 by 8.00% and a decrease

in 2019 by 1.29%.

The results of the calculation of PYFA's cost of equity (Re) for the period 2017-2019 are

relatively increased. In 2017 it was 7.73% an increase in 2018 by 8.05% and an increase in

2019 by 14.93%.

The results of the calculation of SIDO's cost of equity (Re) for the 2017-2019 period have

increased relatively. In 2017 it was 7.73% an increase in 2018 by 7.98% and an increase in

2019 by 16.66%.

The calculation can be seen in the following table:

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The calculation results of the WACC DVLA for the 2017-2019 period have decreased

relatively. In 2017 it was 7.89% an increase in 2018 by 8.01% and decreased in 2019 by -

1.90%. Such fluctuations in the value of WACC are due to the composition and costs of its

capital structure. In 2017-2019 the company did not have debt costs caused by the company's

policy of not having any loans that were charged interest so the company did not have a large

35.10%. Such fluctuations in the value of WACC are due to the composition and costs of its

capital structure. In 2017 the proportion of debt was higher than the proportion of equity at

65.59% and 34.41%. As for debt costs of 1.28% and equity costs of 8.34%. In 2018, the

proportion of debt was higher than the proportion of equity at 65.57% and 34.43%. As for debt

costs at 1.81% and equity costs at 8.48%. In 2019, the proportion of debt was higher than the

proportion of equity, namely 63.51% and 36.49%. As for debt costs of 6.74% and equity costs

of 84.47%.

The calculation results of the WACC KAEF for the 2017-2019 period have decreased

relatively. In 2017 it was 5.89% decreased in 2018 by 5.05% and decreased in 2019 by 3.83%.

Such fluctuations in the value of WACC are due to the composition and costs of its capital

relatively. In 2017 it was 6.96% an increase in 2018 by 7.90% and a decrease in 2019 by 5.27%.

Such fluctuations in the value of WACC are due to the composition and costs of its capital

structure. In 2017 the proportion of debt was lower than the proportion of equity at 16.38% and

83.62%. As for debt costs of 3.17% and equity costs of 7.70%. In 2018, the proportion of debt

was lower than the proportion of equity, namely 15.71% and 84.29%. As for the cost of debt

at 6.99% and the cost of equity at 8.07%. In 2019, the proportion of debt was lower than the

proportion of equity, namely 17.56% and 82.44%. As for debt costs of 12.82% and equity costs

of 3.66%.

The calculation results of the WACC MERK for the 2017-2019 period have decreased

relatively. In 2017 it was 7.73% an increase in 2018 by 8.00% and a decrease in 2019 by 1.29%.

was 7.73%. In 2018 the cost of equity was 8.00%. In 2019 the cost of equity was 1.29%.

1285 Interdisciplinary Social Studies, 1(10), Jul 2022

category listed on the IDX for the 2017-2019 period in millions of rupiah, amounting to Rp.

374,302,-. KLBF, SIDO, and TSPC have a company value of Rp. 2,815,032,-, Rp. 811,089, -

and Rp. 857,268, respectively, where the value of the issuers is above the average value of

pharmaceutical industry companies. Meanwhile, DVLA, INAF, KAEF, MERK, and PYFA

have a lower company value of Rp. 358,477,,-, (Rp. 64,441,-), (Rp. 1,970,499,-), Rp. 116,831,

respectively. Meanwhile, DVLA, MERK, and PYFA are not optimal because the company's

value is below the industry average even though WACC is low. INAF is not optimal because

it has a WACC above the industry average value and the company value is below the industry

average. SIDO and TSPC are not optimal because the company's WACC is above the industry

average even though the company's value is above the industry average. KAEF is also not

optimal even though WACC is below the industry average but the company's value is below

the industry average and is recorded as negative.

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