MULTIVARIATE FUNCTIONS OHLSON METHOD IN BANKCRUPTY ANALYSIS

1.      Financial Statement Analysis

Process of reviewing and evaluating a company financial statements (such as the balance sheet or profit  and loss statement), thereby gaining an understanding of the financial health of the company and enabling more effective decision making.

2.      Scope of Financial Statement Analysis

1)      Liquidity Analysis

2)      Solvency Analysis

3)      Profitability Analysis

4)      Cash Flow Analysis

5)      Bankcrupty Analysis

6)      Risk Analysis

7)      Investment Analysis

3.      Ohlson Method

Ohlson method is a analysis that the develop by James A. Ohlson. This method was developed from the results of research conducted by Ohlson.

From research it, Ohlson found nine (9) ratio is best used to measure the level of company bankcrupty, that is :

1)      GNP TO TOTAL ASSET (SIZE)

2)      TOTAL LIABILITIES TO TOTAL ASSETS = TLTA

3)      CURRENT ASSETS-CURRENT LIABILITIES TO TOTAL ASSETS  = WCTA

4)      CURRENT LIABILITIES TO CURRENT ASSETS = CLCA

5)      NET INCOME TO TOTAL ASSETS = NITA

6)      FUNDS FROM OPERATIONS TO TOTAL LIABILITIES = FUTL

7)      ONE IF NET INCOME WAS NEGATIVE FOR THE LAST TWO YEARS AND ZERO OTHERWISE = INTWO

8)      ONE IF TOTAL LIABILITIES EXCEED TOTAL ASSET AND ZERO OTHERWISE = OENEG

9)   CHIN

GNP TO TOTAL ASSET (SIZE)

Year	GNP Deflator	Total Assets	SIZE
2011	29,556,683.81	10,204,495	2,90
2012	32,371,459.18	10,836,554	2,99

SIZE =

Amount of GNP Deflator we can see in column Per Capital Gross National Product, 2007-2012 (Rupiahs) .

Amount of Total Assets we can see in Balance Sheet.

So, after we input the amount in formula we can get result of SIZE 2011 is 2,90 and SIZE 2012 is 2,99

TOTAL LIABILITIES TO TOTAL ASSETS = TLTA

Year	Total liabilities	Total assets	TLTA
2011	1,778,337	10,204,495	0,174
2012	2,094,469	10,836,554	0,193

TLTA =

Amount of Total Liabilities and Total Assets we can see in Balance Sheet.

So, after we input the amount in formula we can get result of TLTA 2011 is 0,174 and TLTA 2012 is 0,193

CURRENT ASSETS-CURRENT LIABILITIES TO TOTAL ASSETS  = WCTA

Year	Total current assets	Current Liabilities	Total assets	WCTA
2011	1,886,387	1,440,351	10,204,495	0,044
2012	1,880,127	1,644,178	10,836,554	0,022

WCTA = Total current assets – Current Liabilities / Total Assets

Amount of Total current assets, Current Liabilities, and Total Assets we can see in Balance Sheet.

So, after we input the amount in formula we can get result of WCTA 2011 is 0,044 and WCTA 2012 is 0,022

CURRENT LIABILITIES TO CURRENT ASSETS = CLCA

Year	CURRENT liabilities	Total  Current assets	CLCA
2011	1,440,351	1,886,387	0,764
2012	1,644,178	1,880,127	0,874

CLCA =

Amount of Current Liabilities and Total Current Asset  we can see in Balance Sheet.

So, after we input the amount in formula we can get result of CLCA 2011 is 0,764 and CLCA 2012 is 0,874

NET INCOME TO TOTAL ASSETS = NITA

Year	Net Income	Total Assets	NITA
2011	682,230	10,204,495	0,067
2012	390,583	10,836,554	0,036

NITA =

Amount of Net Income and Total Assets we can see in column Balance Sheet

So, after we input the amount in formula we can get result of NITA 2011 is 0,067 and NITA 2012 is 0,036

FUNDS FROM OPERATIONS TO TOTAL LIABILITIES = FUTL

Year	Funds from operations	Total liabilities	FUTL
2011	1,104,109	1,778,337	0,620
2012	233,475	2,094,469	0,111

FULT =

Amount of Founs from operations and Total Liabilities we can see in column Balance Sheet

So, after we input the amount in formula we can get result of FULT 2011 is 0,620 and FULT 2012 is 0,111

ONE IF NET INCOME WAS NEGATIVE FOR THE LAST TWO YEARS AND ZERO OTHERWISE = INTWO

Based on the Income Statement by PT Astra Agro Lestari Tbk showed that during the year 2011 and 2012, the company net profit, so that the value of the variable is 0 INTWO.

ONE IF TOTAL LIABILITIES EXCEED TOTAL ASSET AND ZERO OTHERWISE = OENEG

Basshowed that during the year 2011 and 2012, total liabilities from total assets smaller, so the value of the variable OENEG is 0ed on the balance of PT Astra Agro Lestari Tbk

CHIN

CHIN =

Year	Net profit this year- Net profit last year	Net profit this year+Net profit last year	CHIN
2012	390,583	390,583	-
2011	682,230	682,230	-
TOTAL	-291,647	1,072,813	-0,271

This amount we can see in Balance Sheet

So, after we input the amount in formula we can get result of CHIN 2011 is 390,583 and CHIN 2012 is 682,230

4.      Based on the results of a calculation of financial ratios each predictor variable as shown in the above it can be calculated multivariate function of PT Astra Agro Lestari Tbk

Calculation of Multivariate Functions Ohlson Model Year 2012

(PT Astra Agro Lestari Tbk)

Variabel	Koefisien Variabel Predictor	Variabel Predictor Value	Multivariat  (y)
Konstanta	-1,32		-1,32
SIZE	-0,407	2,99	-1,217
TLTA	6,03	0,193	1.164
WCTA	-1,43	0,022	-0,0315
CLCA	0,0757	1,114	0,843
NITA	-2,37	0,036	-0,085
FUTL	-1,83	0,111	-0,203
INTWO	0,285	0	0
OENEG	-1,72	0	0
CHIN	-0,521	-0,271	0.141
Total			-0,875

5.      Assesment criteria

•         Cutt off point = 3.8%. If P > 3.8% means the company likely to bankrupt

•         If P < or equal to 3.8% means the chances of a small bankrupt

6.      Furthermore, based on multivariate function (y) can be calculated the probability of bankruptcy PT Astra Agro Lestari Tbk as shown as follows:

 

Description:

P is the chance of bankruptcy

E is the logarithm value 2.718282

Y is a multivariate function

 

Based on the results of these calculations it can be concluded that PT Astra Agro Lestari Tbk in 2012 is not likely to go bankrupt because the probability is less than 3.8% which is only 0.3169%.