Corresponding Author: Muhamad Reynaldi Adhyaksa
E-mail: [email protected]
INTRODUCTION
For the developer business, the raw material of the
house is the key for building the product, they also seek for the cheapest and
nearest supplier of raw material that is available. Sometimes buying the raw
material causes problems to the developer, especially in the distribution many
things could happen such as the fluctuation of the transportation cost,
transportation costs can be an obstacle when shipping prices increase, this can
be a variable that is very concerned by developers when they want to buy raw
materials (Fitriyah &
Haryati, 2013). Adhyaksa PreCast wants to remove that obstacle by making the production
site located in the field where the developers' projects are located, thereby
eliminating delivery costs. Availability of the raw material is also the main
concern of ordering the materials, sometimes some producers of the housing
materials didn�t have sufficient stock to meet the demand of the developer, also
there are risk for damage in the process of delivery.
CV. Satria Yaksa Mandiri as a contractor construction
company has The idea of making �Adhyaksa Precast� as a business unit to
stabilize their profitability, the idea is to make developer just in time
materials and cutting the distribution cost, Adhyaksa Precast designed to
support the company in producing the construction material to build houses, roads,
and water channels (three main aspects of a housing area). The production of
the precast in the project location area increases the likelihood of surpassing
cost and time targets and resulting in contractual disputes (Valverde-Gascue�a et
al., 2010). For Adhyaksa Precast potential market, the company that has been targeted
clients are:
1.
PT. ABC
PT. ABC is a company that operates in the property
sector as a developer started in 2017.The Company prefers to build housing
areas for small to medium-income people. The house's specification in the
housing area is all regulated by the regulation, including the selling price.
So, each housing developer should implement a wise business strategy to build
the housing area as cheaply as possible but still get the margin from the
regulated selling price. PT ABC is currently building a housing area. The total
area will be built is 5.6 hectares and includes around 530 houses and 37 shops.
Until November 2021, the developer has built and sold 220 homes and five shops.
Due to the high demand for cheap/subsidized houses, the company regularly
builds more or less six houses each month. Bank BTN also supports PT ABC as the
official partnered bank to give the buyers funding to buy a house. Based on the
survey by Top Brand Award in 2018, Bank BTN got the first position for its
KPR/housing funding product (Yanto & Prabowo,
2020). However, sometimes the buyers also prefer to use different banks such as
BNI and BSI. Whatever the bank, as long as they have the house subsidized quota
from the government, the house buying process can be completed.
2.
PT. DEF
PT. DEF is also a property business company in the
developer sector started in August 2018, the housing is targeting medium-low
income people. The company also applying the subsidized housing, but not all
the land that has been prepared is all for the subsidized, in total they have
prepared 4.5 hectares� land with 2.5 hectares targeted for the subsidize
housing and the rest is for medium to low housing started price at
Rp.283.000.000 type 52/60 and shops. For the subsidized house, they also follow
the regulation that has been regulated, such as type of the house, pricing
(depending on the location).The strategy for PT. DEF in selling their houses,
they first building and selling the subsidize house in the back of the housing
planning, then after the subsidize housing is reaching the selling target, PT.
DEF started to build and sell their medium-low housing. Because of the high
demand for subsidized housing in their area, per month they build 4-6
subsidized houses for stock. With the land size, they have planned to build 450
houses and 23 shops.
3.
PT. GHI
PT.GHI is a property business company taking place as
a developer that has started since December 2018, the business creates a
medium-low housing project, the project itself mixing subsidize housing and
also medium-low housing, the project started in early 2019, and have a positive
market reaction, as a huge demand in medium-low housing in the area. The main
focus of the company is selling out the subsidized housing and starting the
medium-low housing. The location of the project is in the highlands and quite
far from city central.PT. GHI project stands on 3.3 hectares� land that has
been planned for 370 houses and 19 shops building in front of the housing area.
As an answer to the market's high demand, PT.GHI built and stock more or less 5
houses per month. But as the pandemic strikes in the first 2020, their sales
going down only could sell 2-3 houses per month, but in Q2 2021 they could
bring up their house sales to 5-7 houses. As per Q4 2021 they have sold 102
Subsidize housing and prepare to build the medium-low housing.
The concern of the developer business owners over the
distribution and also the quality possessed by the suppliers is something that
always happens. It could be that someday in the future the cost of material
transportation becomes a variable that blocks when the housing developer
business owners want to make a decision, not to mention the risk of
availability of goods when needing materials on a large scale when the market
demand for housing is high, or housing developers lose money when the demand
for housing is high. Damage to the material during delivery. Adhyaksa Precast
could be the answer to that concern, but right now before starting a business,
of course, analysis is needed that can make the initiator of Adhyaksa Precast
confident in his decision to create this line of business. Especially analysis
in the financial sector, before running, the initiator must know whether this
business has good prospects and can also be profitable in the long term.
Consideration of investment alternatives is also
questioned by the initiator in developing his business, especially in doing
this it will cost money which is certainly not cheap, the initiator has to
think deeply about the decision to be taken regarding what aspects will have a
positive impact on his business.
METHOD
The author uses
descriptive analysis research method to visualize which financing strategy will
be the most profitable for the company. The author uses descriptive analysis
method since the author has the complete data for conducting the research
including house sales data and material needed.�
The logic sequences of the research are:
1. Company Current Business Analysis
The author uses
almost all available business environments analysis such as Porter's Five Forces,
Business Model Canvas, SWOT analysis, and PEST Analysis. All of those analyses
will be useful in determining the surrounding business environment.
2. Generate future demand projections
The author uses the
company's past historical data to determine future demand projections. The
demand projections are essential to ensure that the supply and demand of the
company market will be balanced in the future.
3. Find the Investment Sources
The author also
does a financial feasibility analysis to find the best possible funding option
to execute the business strategy. The risk and opportunity analysis of each
possible funding method also becomes the author's consideration to decide.
4. Give the Company Recommendation
The final output of
this research will be a bunch of recommendations for the company to be followed
based on any financial calculations provided in this research.
Figure 1. Conceptual Framework
Investing is not a
game of chance (Abdullaevich, 2020). However, an investment may end up failing to make a
profit if the investors lack sufficient knowledge of investment fundamentals
and the investment's field. Investment failures are frequent in the current
market. Significant losses appear to be the outcome of unjustified and
unproductive investments in the majority of cases. For Investing in the
business or starting a business needed approaches that will foreseen that the
business will be profitable or not in the future, these are several approaches
that would be use in this research:
1. Payback Period
The Payback Period
(PBP) refers to the time frame in which the initial fee is refunded. In
comparison to other options, the sooner the return, the more appealing the
alternative. The Payback Period approach has the advantages of being simple to
use and calculate, as well as being beneficial for selecting. Which investment
has the quickest recovery time? Capital recovery can be used to forecast future
uncertainty risk, and the quickest recovery period has a lower risk than the
relatively longer recovery period (Purnatiyo, 2014). Generally speaking, the shorter the payback period, the
more appealing the investment.
2. Incremental Cost
In economics and
cost accounting, the term "incremental cost" refers to the additional
expenses paid in comparison to a baseline in order to produce a new product or
an equivalent result in a different way. The total cost of the project in this
case would be equal to the baseline cost plus the incremental cost. Additional
expenses associated with a chosen investment alternative that are proportional
to the change in production volume are also considered incremental costs.
Calculating the incremental cost is critical information for business
management when determining the quantity of production capacity to purchase
(addition and reduction).
3. US� Index
Dr. Ir. Uke Marius
Siahaan, MBA established the US' Index theory. He is a lecturer in the MBA
program at the Institute of Technology Bandung's School of Business and
Management. Company should take the right decision on its capital structure,
whether financed by debt or equity, in order to maximize its Operating Profit.
Those financing should be able to generate profit greater than its operating
cost and financial cost, that's why it is called as leverage. According to the
US' Index theory, signs of US' Index values and the formula of the US' Index is
available below (Siahaan, 2021).
𝑈𝑆′ 𝐼𝑛𝑑𝑒𝑥 = 𝐵𝑎𝑠𝑖𝑐 𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦 (𝐵𝐵𝑃) / 𝐿𝑜𝑎𝑛 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑅𝑎𝑡𝑒 (𝐼)
4. Profitability Index
The profitability
index (PI) is a ratio calculated by dividing discounted benefits by discounted
costs. It is an assessment of an investment's profitability that can be
compared to the profitability of other comparable assets. Additionally, it is
known as the benefit-cost ratio, the cost-benefit ratio, or even capital
rationing. It is one of several methods for quantifying and determining the
efficiency of a proposed investment (Gurau, 2012).
5. Internal Rate of Return (IRR)
Managers and
practitioners frequently utilize the internal rate of return (IRR) to make
investment decisions (Altshuler & Magni,
2012). The IRR is the discount (interest) rate which equates
the sum of the present values of a cash flow to zero. If the NPV of a project
is zero at a selected discount rate, that rate is, by definition, the IRR. The
IRR is then an algebraic equivalence (Patrick & French,
2016).
6. Net Present Value (NPV)
The term "Net
Present Value" refers to a technique for determining the difference
between benefits or revenues and costs or expenses. The Net Present Value (NPV)
method is frequently used in capital planning to determine the profitability of
a project or investment projection. The NPV approach is probably the most
widespread and advanced economic valuation technique. It entails discounting
all future cash flows (both inflow and outflow) associated with the innovation
project at a specified discount rate and then aggregating them. The merit of
innovation is determined by its contribution to the generation of economic
value relative to the required investment (�i�lavsk�, 2014).
RESULTS AND DISCUSSION
� Figure 2. House Sold Projection PT. ABC
In processing data using the Minitab software above, the
data selected is the data with the lowest error that can be obtained, the projection
for PT ABC's house sales is calculated for the next 3 years. For error data
from PT ABC shows MAPE data 14.2273, MAD 0.8064, MSP 0.8571. Future prospective
buyer companies, namely PT ABC, have projected sales (Using Minitab) in 2022 to
reach 82, in 2023 90 and 2024 to reach 97 housing units to be built and sold.
Figure 3. House Sold Projection PT. DEF
In processing data with the aforementioned Minitab
software, the data picked is the data with the lowest possible error, and a
three-year forecast for PT DEF's house sales is calculated. For error data from
PT DEF, the MAPE is 10.4732, the MAD is 0.5765, and the MSP is 0.5292. Future
prospective buyer firms, such as PT DEF, have forecast sales (using Minitab) to
reach 50 units in 2022, 35 units in 2023, and 19 units in 2024. There is a
decrease in the number of sales, it could cause by the land has turned into
commercial housing and there is no plan for expansion from the company.
Figure 4. House Sold Projection PT. GHI
Using the aforementioned Minitab software, the data with
the lowest feasible error rate is selected and a three-year prediction for PT
GHI's home sales is computed. The MAPE for PT GHI error data is 17,4360, the
MAD is 0.8774, and the MSP is 1,137. Future prospective buyer companies,
including PT GHI, have predicted (using Minitab) that sales will reach 65 units
in 2022, 69 units in 2023, and 72 units in 2024.
Table
1. Total Gross Profit If Not Cooperated
Tabel 2.
Total Gross Profit If Cooperated
Table
3. Total Needed Investment
|
Item Needed
|
Qty
|
Item Price
|
Total Price
|
|
Paving
Block Press Machine
|
3
|
Rp 82.000.000
|
Rp 246.000.000
|
|
Water Jet
Jump
|
1
|
Rp 25.000.000
|
Rp 25.000.000
|
|
Herbel
Mixer
|
3
|
Rp 40.000.000
|
Rp 120.000.000
|
|
Generator
Form
|
1
|
Rp 15.000.000
|
Rp 15.000.000
|
|
U-Ditch
Molding
|
4
|
Rp 20.000.000
|
Rp 80.000.000
|
|
Drying Fans
|
1
|
Rp 12.500.000
|
Rp 12.500.000
|
|
Transport
Truck (Hino Dutro)
|
1
|
Rp 400.000.000
|
Rp 400.000.000
|
|
Production
Plant
|
1
|
Rp 75.000.000
|
Rp 75.000.000
|
|
Warehouse
|
1
|
Rp 28.000.000
|
Rp 28.000.000
|
|
Genset
|
2
|
Rp 21.500.000
|
Rp 43.000.000
|
|
Paperwork
|
1
|
Rp 1.500.000
|
Rp 1.500.000
|
|
Total Needed Investment
|
|
|
Rp 1.046.000.000
|
Table
4. Financial Statement If Not Cooperated with Adhyaksa Precast
|
CV. Satria Yaksa Mandiri (Adhyaksa Precast)
|
|
|
2022
|
2023
|
2024
|
|
Sales
|
Rp 2.227.577.500
|
Rp 2.193.655.000
|
Rp 2.125.810.000
|
|
Cogs
|
Rp 1.175.696.000
|
Rp 1.157.792.000
|
Rp 1.121.984.000
|
|
Gross Profit
|
Rp 1.051.881.500
|
Rp 1.035.863.000
|
Rp 1.003.826.000
|
|
Over Head
|
Rp 280.000.000
|
Rp 280.000.000
|
Rp 280.000.000
|
|
Depreciation
|
Rp 220.000.000
|
Rp 220.000.000
|
Rp 220.000.000
|
|
Ebit
|
Rp 551.881.500
|
Rp 535.863.000
|
Rp 503.826.000
|
|
Interest Exp
|
Rp 180.000.000
|
Rp 120.000.000
|
Rp 60.000.000
|
|
Ebt
|
Rp 371.881.500
|
Rp 415.863.000
|
Rp 443.826.000
|
|
Tax 25%
|
Rp 92.970.375
|
Rp 103.965.750
|
Rp 110.956.500
|
|
Nat
|
Rp 278.911.125
|
Rp 311.897.250
|
Rp 332.869.500
|
|
R/G 20%
|
Rp 55.782.225
|
Rp 124.758.900
|
Rp 133.147.800
|
|
End Profit/ Year
|
Rp 223.128.900
|
Rp 187.138.350
|
Rp 199.721.700
|
Table
5. Financial Statement If Cooperated with Adhyaksa Precast
|
CV. Satria Yaksa Mandiri (Adhyaksa Precast)
|
|
|
2022
|
2023
|
2024
|
|
Sales
|
Rp 2.153.162.500
|
Rp 2.084.980.000
|
Rp 2.008.682.500
|
|
Cogs
|
Rp 1.175.696.000
|
Rp 1.157.792.000
|
Rp 1.121.984.000
|
|
Gross Profit
|
Rp 977.466.500
|
Rp 927.188.000
|
Rp 886.698,500
|
|
Over Head
|
Rp 180.000.000
|
Rp 180.000.000
|
Rp 180.000.000
|
|
Depreciation
|
Rp 220.000.000
|
Rp 220.000.000
|
Rp 220.000.000
|
|
Ebit
|
Rp 577.466.500
|
Rp 527.188.000
|
Rp 486.698.500
|
|
Interest Exp
|
Rp 180.000.000
|
Rp 120.000.000
|
Rp 60.000.000
|
|
Ebt
|
Rp 397.466.500
|
Rp 407.188.000
|
Rp 426.698.500
|
|
Tax 25%
|
Rp �99.366.625
|
Rp 101.797.000
|
Rp 106.674.625
|
|
Nat
|
Rp 298.099.875
|
Rp 305.391.000
|
Rp 320.032.875
|
|
R/G 20%
|
Rp 59.619.975
|
Rp 122.156.400
|
Rp 128.009.550
|
|
End Profit/ Year
|
Rp 238.479.900
|
Rp 183.234.600
|
Rp 192.014.325
|
CONCLUSION
Based on the discussion in the preceding
chapter (business discovery, business solution, and financial analysis), the
following are the research conclusions for CV Satria Yaksa Mandiri's business
development finance plan. Due to the company's financial condition. So far, the
mix combination method between Bank Loan and Own Equity still performs as the
best possible funding option. There is a huge potential revenue and profit
projection if both companies (CV Satria Yaksa Mandiri and its Clients) could
reach the business agreement as soon as possible. Based
on the financial feasibility study the company was sure that the combination of
Bank Loan and own Equity could fulfill all of the needed investment
(Rp.1.046.000.000). Especially for Bank Loan, all of the feasibility
value calculations shows a positive number (IRR, NPV, PI, ROI, PP, US Index,
and PP). Although the differences in financial calculation for
cooperated operation seems to be lower, due to the given discounted price. The
company still prefers to choose the cooperative partnership instead of
non-cooperative, because the company will have more free cash flow (the rent
fee is free).
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|
 � 2021 by
the authors. Submitted for possible open access publication under the terms
and conditions of the Creative Commons Attribution (CC BY SA) license
(https://creativecommons.org/licenses/by-sa/4.0/).
|
Received:
22-05-2022�������������������� ��������������� Accepted: 29-05-2022���������������������� ��������������� Published: 15-06-2022������ 