INDONESIA, TBK.
By
Sefika Fildzabiani 13112051
BACHELOR’S DEGREE in
BUSINESS ADMINISTRATION
BUSINESS ADMINISTRATION & HUMANITIES
SWISS GERMAN UNIVERSITY EduTown BSD City
Tangerang 15339 Indonesia
August 2016
Revision after the Thesis Defense on July 25th 2016
Sefika Fildzabiani STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Sefika Fildzabiani
____________________________________________
Student Date
Approved by:
Wardatul Adawiyah, SE, MBA.
____________________________________________
Thesis Advisor Date
Eric Jos Nasution, MBA, MA, Ph.D
____________________________________________
Dean Date
Sefika Fildzabiani ABSTRACT
THE IMPACT OF OIL PRICE FLUCTUATION ON VALUE OF TRANSPORTATION INDUSTRY: A CASE STUDY OF PT. GARUDA
INDONESIA, TBK.
By
Sefika Fildzabiani
Wardatul Adawiyah, SE, MBA., Advisor
SWISS GERMAN UNIVERSITY
This research aims to analyze the impact of oil price fluctuation on value of transportation industry. PT. Garuda Indonesia, Tbk. was selected as the sample for this research, since the company use oil product to operates its business. Independent variable in this research is oil price, while the dependent variables are firm value and shareholder value. Business Simulation is being used in this research to show the result on three different scenarios, there will be: normal scenario, pessimist scenario, and optimist scenario. Free Cash Flow to the Firm and Shareholder Value Added methods are being used in this research in calculating the independent variables.
Based on the calculation that the researcher has done, the result shows that oil price fluctuation directly impact on COS of the company. Thus, oil price fluctuation significantly influenced the firm value and shareholder value of the company. From the result , it was recommended that the company can allocate its profit to sinking fund when the oil price is low and push to reduce expenses when the oil price is high.
Keywords: Oil Price, Firm Value, Shareholder Value Added, Free Cash Flow to the Firm.
Sefika Fildzabiani
© Copyright 2016 by Sefika Fildzabiani
All rights reserved
Sefika Fildzabiani DEDICATION
I dedicate this thesis to my family, lecturers, and friends.
Sefika Fildzabiani ACKNOWLEDGEMENTS
First of all, I would like to thank Allah SWT for the blessing, for helping me during my time in Swiss German University, and also for made everything possible to complete this thesis.
Secondly, special thanks to my beloved parents for their prayer, love, and support during the period of thesis writing. Also, to my beloved brother for always being my stress reliever.
I would like to express my sincere gratitude to my thesis advisor, Ms. Wardatul Adawiyah for spending her time and being so patience during the completion of this thesis. Also, thank you for her guidance, ideas and advice for this thesis.
Special thanks to my lovely FinanceBelle; Angel, Angie, Audrey, Chantigy, Lucyana, and Myra for all the gossip time, the craziness, and the wonderful time we had together. Moreover, I would like to thanks my thesis mate Naomi, Aditya, and Willi.
Last but not least, many thanks to all Banking & Finance students batch 2012 for the happiness, laughter and all the fun we had together for 4 years in SGU.
Sefika Fildzabiani TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR ... 2
ABSTRACT ... 3
DEDICATION ... 5
ACKNOWLEDGEMENTS ... 6
TABLE OF CONTENTS ... 7
LIST OF FIGURE ... 10
LIST OF TABLES ... 11
CHAPTER 1 INTRODUCTION ... 13
1.1 Background ... 13
1.2 Research Problem ... 16
1.3 Research Question ... 16
1.4 Research Objectives ... 16
1.5 Scope and Limitations ... 16
1.6 Significance Study ... 17
1.7 Thesis Structure ... 17
CHAPTER 2 LITERATURE REVIEW ... 18
2.1 Framework of Thinking ... 18
2.1.1 Oil Price Fluctuation ... 19
2.1.2 Financial Statement ... 20
2.1.2.1 Income Statement ... 20
2.1.2.2 Balance Sheet ... 21
2.1.2.3 Statement of Cash Flow ... 21
2.1.3 Financial Statement Projection ... 22
2.1.4 Firm Valuation ... 24
2.1.4.1 Discounted Cash Flow (DCF) ... 25
Sefika Fildzabiani
2.1.4.2 Free Cash Flow to the Firm (FCFF) ... 26
2.1.5 Shareholder Value Added (SVA) ... 29
2.2 Previous Study ... 30
2.3 Study Differences ... 33
2.4 Research Model ... 34
2.5 Hypothesis ... 35
CHAPTER 3 – RESEARCH METHODS ... 36
3.1 Research Process ... 36
3.2 Type of Study ... 38
3.3 Time Limitation ... 39
3.4 Unit of Analysis ... 39
3.5 Population & Sample Planning ... 39
3.6 Type of Data & Collection Method ... 39
3.7 Variable Operationalization ... 40
3.8 Data Analysis Technique ... 41
CHAPTER 4 – RESULTS AND DISCUSSIONS ... 42
4.1 Company Background ... 42
4.2 Vertical Analysis of PT. Garuda Indonesia, Tbk. Income Statement (2011 – 2015) ... 44
4.3 Firm Valuation ... 45
4.3.1 Normal Scenario ... 45
4.3.2 Optimist Scenario ... 54
4.3.3 Pessimist Scenario ... 63
4.4 Projection of Net Income and Balance Sheet in Different COS Scenarios ... 72
4.5 Hypothesis Testing Result ... 74
CHAPTER 5 – CONCLUSIONS AND RECCOMENDATIONS ... 79
5.1 Conclusions ... 79
Sefika Fildzabiani
5.2 Recommendations ... 80
GLOSSARY ... 81
REFERENCES ... 83
APPENDICES ... 86
CURRICULUM VITAE ... 89
