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Ifp Indonesia and the Business Model

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NTRODUCTION Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades. IFP, Indonesia is one of foreign timber logging operate in Kalimantan (Borneo) island. With Kristin Daniel as the planner manager since 2001. IFP Ltd did business more than 25 countries in the world but Indonesia is the only one country it has business in South East Asia. The company has original business in trading coal, metals and shipping industry. SWOT ANALYSIS Strength The company use simplest …show more content…

The condition could be happen from the difficulty of transporting and shipping timber from the forest to the nearest port. When the logging activity keep continue, it caused IFP product stocked much more than the rotation of selling activity. DEBT MANAGEMENT RATIO DEBT RATIO = Total Liabilities / total assets = 2,980.00 / 10,080.00 = 30% Average Company = 40% IFP, Indonesia shows that the debt ratio are only 30%, where it means creditors only supplies one third of the company's total financing. This is consider low, where average company usually have 40% debt ratio. This condition always preferred by creditor in order to lend money. The lower the ratio, the higher the cushion against the creditors' losses in event of liquidation. And the creditor would have willing to lend more money to a company which has low debt ratio than the high one. In other hand, this condition might not attract stockholders. Stockholders always want higher leverage which magnifies expected earnings. PROFITABILITY RATIO PROFIT MARGIN ON SALES = Net income available to stockholders / sales = 860.00 / 11,420.00 = 8% Average companies = 5% IFP, Indonesia profit margin ratio is above the industry average. This could be resulted from the company able to press the operational cost as low as they could. Labour cost in Indonesia is as low as USD 4 per day. However a company with high profit margin, might also caused the

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