Open AccessFINANCIAL PERFORMANCE ANALYSIS SURROUNDING INDONESIAN INITIAL PUBLIC OFFERINGS
Publication year - 2020
Publication title -
international journal of research science and management
Language(s) - English
Resource type - Journals
ISSN - 2349-5197
DOI - 10.29121/ijrsm.v7.i11.2020.3
Subject(s) - initial public offering , asset turnover , financial ratio , business , return on equity , equity ratio , debt to equity ratio , stock exchange , debt ratio , finance , market liquidity , current ratio , debt , equity (law) , profit margin , financial statement , financial analysis , return on assets , financial system , accounting , population , demography , audit , sociology , political science , law , nonprobability sampling
One of the ways to find out the performance of company making Initial Public Offering (IPO) is through the financial performance analysis. The analysis would help investors prior to deciding to buy the stocks of the company. Financial ratios are a common tool used in making financial statement analysis. This study aims to analyze whether the companies’ financial performance improves after the IPO. This research is quantitative research using secondary data. The sample consists of 59 companies’ making IPOs on the Indonesia Stock Exchange from 2010 to 2014. Results indicate that only Current Ratio increases significantly over three years after the IPO. The other ratios, i.e., Debt to Asset Ratio, Debt to Equity Ratio, Total Asset Turnover, Net Profit Margin and Return on Equity decrease. Overall, the financial performance of the companies tends to worsen, except for liquidity ratio.