The Effect Analysis of Financial Performance on Cumulative Returns of Companies Listed in Indonesia Stock Exchange Before and After the Merger and Acquisition for the 2014-2018 Period using the Event Study Method
Azeria Ra Bionda (a*), Imo Gandakusuma (b), Zuliani Dalimunthe (b)
a) Master of Management, Faculty of Economics and Business, Universitas Indonesia
Kampus UI Salemba, Jakarta, Indonesia
*azeriarabionda[at]gmail.com
b) Faculty of Economics and Business, Universitas Indonesia
Kampus UI Salemba, Jakarta, Indonesia
Abstract
This study aimed to describe the analysis effect of financial performance to cumulative returns of companies listed in Indonesia Stock Exchange before and after merger and acquisitions for the period of 2014-2018. The purpose of this study is providing the result of merger and acquisitions which is synergy and value added for the cumulative returns of the companies based on the calculation of financial ratio and cumulative returns of the companies before and after merger and acquisitions using event study approach. To calculate the financial performance of the companies, this study using the parameters of financial ratios such as; Return on Assets (ROA), Return on Equity (ROE), Current Ratio, Debt Ratio, Total Assets Turnover (TATO), and Tobin-s Q Ratio. Beside those financial ratios, this study also calculates the Cumulative Return of the companies with the period 30 days before and after merger and acquisitions.
Keywords: Merger; Acquisitions; Return on Asset (ROA); Return on Equity (ROE); Current Ratio; Debt Ratio; Total Asset Turnover (TATO); Tobin-s Q Ratio; Cumulative Returns; Event Study
Topic: Management