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5.2 Recommendations
There are several recommendations that may be granted by the researcher for the company, investors, and also for other interested parties for consideration in making a decision or in further research based on this research analysis finding.
1. Garuda needs to conduct periodic evaluations of hedging contracts to adjust with the world oil market price so that the hedging strategy remains profitable.
2. For other industries whose component costs are affected by fluctuations in the world oil prices in order to carry out hedging strategies to maintain the company’s profitability.
3. For further research, can be done using longer periods of time and more companies’ sample to better illustrate the impact of fuel hedging on corporate profitability.
REFERENCES
Allayannis, George, & Weston, J. (2001). The use of foreign currency derivatives and firm market value. Review of Financial Studies 14, 243-276.
Bank Indonesia. (t.thn.). Bank Indonesia. Taken back from Inflasi:
http://www.bi.go.id/id/moneter/inflasi/pengenalan/Contents/Default.aspx
BBC. (2014, December 16). Taken back from Nilai tukar rupiah terus merosot:
http://www.bbc.com/indonesia/berita_indonesia/2014/12/141216_rupiah_dollar _turun
Board of Governors of the Federal Reserve System. (2017). Taken back from The Fed Interest Rate:
http://www.federalreserve.gov/releases/h15/data.htm
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Carter, DA., Rogers, DA. & Simkins, BJ. (2006). Does Hedging affect firm value?
Evidence from the US airline industry.
Carter, David, Rogers, D., & Betty Simkins. (2006). Hedging and value in the US airline industry. Journal of Applied Corporate Finance 18, 20-34.
Clubley, Sally. (1999). An Early Take Off. Commodity Risk Special Report in the issue.
Detik Finance. (2015, June 04). Taken back from Ini Alasan Dolar AS Melejit ke Posisi Setara Krismon 1998:
http://finance.detik.com/read/2015/06/04/152919/2933474/6/ini-alasan-dolar-as- melejit-ke-posisi-setara-krismon-1998
Froot, Kenneth, A., David S. Scharfstein, and Jeremy C. Stein. (1993). Risk Management:
Coordinating corporate investment and financing policies. Journal of Finance 48, 1629- 1658.
Garuda Indonesia. (2015, September). Taken back from GIAA In Flash:
https://www.garuda-indonesia.com/files/pdf/investor-relations/quarterly- reports/GIAA_In_Flash_-_9M15.pdf
Garuda Indonesia. (2016, July). Taken back from Hedging Disclosure:
https://www.garuda-indonesia.com/files/pdf/investor-relations/monthly- operating-data/Hedging_Disclosure_-_July_2016_r2.pdf
Grabianowski, E. (2017). Taken back from How Budget Airlines Work:
http://money.howstuffworks.com/personal-finance/budgeting/budget- airline1.htm
Hamilton, JD. (2008). Oil and the macroeconomy. The new Palgrave dictionary of economics. UK.
FUEL HEDGING AND INFLATION IMPACT ON THE PROFITABILITY OF A COMPANY: Page 46 of 51
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IATA. (2017). Taken back from Fact Sheet – Fuel:
https://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/fact-sheet- fuel.pdf
International Monetary Fund. (2017). Taken back from Allocated Reserves by Currency:
http://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4
Investing. (2017). Taken back from Crude Oil WTI Futures.:
https://www.investing.com/commodities/crude-oil-forecasts
Leland, H. (1998). Agency cost, risk management, and capital structure. Journal of Finance 53, 1213-1243.
Mankiw, N. G. (2007). Macroeconomic Theory. Jakarta: Erlangga.
Murni, A. (2006). Macroeconomics. Jakarta: Salemba Empat.
Persatuan Insinyur Indonesia. (2016). Taken back from Teori Terbentuknya Minyak dan Gas:
https://pii.or.id/teori-terbentuknya-minyak-dan-gas
Smith, Clifford W., Jr., & René M. Stulz. (1985). The determinants of firms’ hedging policies. Journal of Financial and Quantitative Analysis 20, 391-405.
Tempo. (2016). Taken back from Harga Minyak Mentah Terendah dalam 11 tahun Terakhir:
https://m.tempo.co/read/news/2016/01/08/090734168/harga-minyak-mentah- terendah-dalam-11-tahun-terakhir
Trading Economics. (2017). Taken back from Crude Oil:
http://id.tradingeconomics.com/commodity/crude-oil
Trading Economics. (2017). Taken back from Indonesia Rupiah:
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http://www.tradingeconomics.com/indonesia/currency
Trading Economics. (2017). Taken back from United States Dollar:
http://www.tradingeconomics.com/united-states/currency
Travel Weekly Asia. (2015). Taken back from Garuda moves to reduce impact of falling rupiah and high fuel costs:
http://www.travelweekly-asia.com/Travel-News/Airline-News/Garuda-moves- to-reduce-impact-of-falling-rupiah-and-high-fuel-costs
APPENDIXES
Appendix 1: Balance Sheet of PT. Garuda Indonesia: Year 2012 – 2016 (in USD)
Descriptions 31/12/2012 31/12/2013 31/12/2014 31/12/2015 31/12/2016
Current Assets
Cash and Equivalents 325,784,942 475,260,630 434,327,498 519,972,655 578,702,739 Accounts Receivable 129,471,098.00 139,981,363 120,623,827.00 121,527,641.00 191,295,565.00
Inventories 83,443,877 90,328,457 85,204,399 91,631,231 108,954,457
Prepaid Expenses 84,809,542 89,243,446 134,765,800 177,104,409 220,275,067
Other Receivables 7,877,613 8,745,081 8,349,932 17,581,553 21,172,730
Prepaid Taxes 5,179,146 15,574,946 27,243,487 80,030,516 44,732,744
Other Current Assets 0 0 0 0 0
Total Current Assets 636,566,218 819,133,923 810,514,943 1,007,848,005 1,165,133,302
Fixed Assets
Property Plant &
Equipment 1,881,431,548 2,953,784,952 3,100,815,978 3,310,010,986 3,737,569,390 Accumulated
Depreciation 0.00 0.00 0.00 0.00 0.00
Property Plant &
Equipment - Net 1,881,431,548 2,953,784,952 3,100,815,978 3,310,010,986 3,737,569,390
Total Assets 2,517,997,766 3,772,918,875 3,911,330,921 4,317,858,991 4,902,702,692
Current Liabilities
Accounts Payable 190139174 292458156 359786039 519257717 676015667
