1.
Primus Automation
2.
Primus Background
3.
Avanjet
4.
Permasalahan Finansial yang dihadapi Avanjet
5.
Analysis buy and borrow option
6.
Variant Analysis
7.
Conclusion
8.
Recommendation
Merupakan perusahaan global yang menghasilkan produk-produk inovative berupa automation system products and services yang beroperasi di negaranegara : United States, Europe, and Asia. Produk yang dihasilkan berupa : Programmable controllers Numerical controllers Industrial computers Manufacturing software Factory-automation systems Data communication networks
Sasaran perusahaan adalah : Memelihara kinerja perusahaan sebagai pemimpin pasar dengan meningkatkan sales 15%/tahun dengan pencapaian target pada net income dan working capital turnover Kondisi yang dihadapi adalah : 1. Pertumbuhan ekonomi yang melambat 2. Meningkatnya persaingan 3. Aliansi yang bersifat cross continental 4. Muncul produk baru 5. Bergesernya transaksi dari pola penjualan menjadi leasing
Pabrik pembuat corporate-jet aircraft. Untuk melakukan cost reduction dan mempercepat company’s production line. Avantjet membutuhkan automation system Beberapa catatan penting dalam meningkatkan kinerja : •
•
Mempunyai permasalahan perimbangan Asset dan Hutang yang high leveraged CEO mempunyai kebijakan untuk tidak mengeluarkan CAPEX yang akan berpengaruh negatif terhadap the income statement and balance sheet
Beberapa alternatif yang akan dilakukan Avantjet untuk pengadaan automation sysytem adalah : 1.
Melalui pinjaman
2.
Pengadaan melalui ‘conditional sale’ dimana kepemilikan
akan berpindah pada saat pembayaran final 3.
Sistem sewa peralatan : 1. Capital Lease 2. Operating Lease
Avantjet's Balance Sheet ($000) Assets Current assets: Cash and temporary investments Accounts receivable Inventories Prepaid expenses Total current assets Property, plant, and equipment: Land Buildings Machinery and equipment Furniture and fixtures Construction in progress Less accumulated depreciation Net property, plant, and equipment Other assets Total assets Liabilities and stockholders' equity Current liabili ties: Long-term debt Accounts payable Notes payable Accrued comp., int. & other liabilities Deposits and progress payments Total current liabilities Long-term notes payable to banks Deferred income taxes Common stockholders' equity: Common stock Capital in excess of par value Retained earnings Less common stock in treasury
2001
2000
$19,918 37,791 310,180 13,928 381,817
$27,263 37,307 323,101 13,362 401,033
2,245 30,654 26,932 1,683 1,668 63,182 12,634 50,548 640,369 $1,072,734
2,245 30,229 21,244 1,520 885 56,123 8,267 47,856 648,339 $1,097,228
$592 42,355 4,750 39,627 146,964 234,288
$563 38,760 5,764 43,855 160,946 249,888
646,633 42,661 689,294
671,225 41,498 712,723
3,385 74,081 72,017 (331)
3,027 69,770 62,156 (336)
Avantjet's Statement of Income ($000) Sales Other income Gross income Cost of goods sold Selling, general, & admin. Research & development Interest Total expenses Income before taxes Taxes Net income
2001
2000
1999
576,327 9,985 586,312 425,076 43,624 13,773 84,062 566,535 19,777 9,690 10,087
575,477 6,976 582,453 423,443 36,215 12,873 87,259 559,790 22,663 11,105 11,558
432,522 9,677 442,199 325,016 35,632 9,064 27,002 396,714 45,485 22,288 23,197
Financial Ratio Liquidity Current Ratio Acivity Ratio Inventory Turnover A ve rage Col le cti on Pe ri od (day) Total Asset Turnover Debt Ratio Debt Ratio Profitabilitas Gross Profit Margin Net profit Margin
2001
2000
1.63
1.60
1.37 23.61 0.54
1.31 23.34 0.52
86%
88%
27.50% 1.75%
27.30% 2.01%
Avantjet mempunyai ratio hutang yang besar, sedang net profit menurun Pembelian dengan hutang akan memperburuk kondisi keuangan
•
•
Te rm under hypothe tical leas ing & buy-borrow s trateg ie s
Loan ("Buy-and-Borrow") Equipment cost Cash down payment Loan amount Lease Annual payments 5-year Leasing option #1 Leasing option #2 Leasing option #3 Leasing option #4 Both Methods Guaranteed residual value: Investment tax credit Depreciation
$715,000 $0 $715,000 Payment/Year $155,040 $160,003 $162,350 $164,760
5-year MACRS Income Tax Depreciation Rate Schedule Year Percentage 1 20.00 2 32.00 3 19.20 4 11.52 5 11.52
11.2729% 0% 5-year MACRS
Proposal pengadaan dari kompetitor System Manufacturer
Purchase Price
Quoted Annual Lease Expenses
if Avanjet were to buy
and Resd'l Value for 5 year
Faulhaber Gmbh
$ 759,000.00
$ 170000, 15% residual value
Honshu Heavy Industries Primus Automation Division
$ 737,000.00 $ 715,000.00
$ 163000, 24% residual value -
Option 1 Net Purcha se Pri ce
0
Depreci a ti on Ta x Sa vings Lea se Payment Ta x on Lea se Pa yment
1
2
3
4
48,620
77,792
46,675
28,005
155,040
155,040
155,040
155,040
155,040
-52,714
-52,714
-52,714
-52,714
-52,714
Resi dua l Val ue -612,674
NPV
(23,002)
Option 2 Net Purcha se Pri ce Depreci a ti on Ta x Sa vings Lea se Payment Ta x on Lea se Pa yment
150,946
180,118
149,002
130,332
NPV IRR
Option 3 Net Purcha se Pri ce
0
1
2
3
4
Ta x on Lea se Pa yment
160,003
48,620 160,003
77,792 160,003
46,675 160,003
28,005 160,003
-54,401
-54,401
-54,401
-54,401
-54,401
-609,398
154,222
183,394
152,277
133,607
IRR
Option 4 Net Purcha se Pri ce
0
1
2
3
4
Ta x on Lea se Pa yment
48,620
77,792
46,675
28,005
162,350
162,350
162,350
162,350
162,350
-55,199
-55,199
-55,199
-55,199
-55,199 67,199
-607,849
155,771
184,943
153,826
135,156
81,803
(2,827) 6.07%
0
1
2
3
4
5
-715,000 48,620
77,792
46,675
28,005
164,760
164,760
164,760
164,760
164,760
-54,401
-54,401
-54,401
-54,401
-54,401
28,005
67,199
Ta x on Residua l Va l ue
-13,402 -604,641
158,979
188,151
157,034
138,364
Primus prop.
Option-1 Option-2 Option-3 Option-4
NPV
(23,002) (9,304) (2,827) 10,587
IRR
4.64% 5.61% 6.07% 7.02%
28,005
-13,402
Resi dua l Val ue Net Ca sh Fl ow
5
-715,000
Depreci a ti on Ta x Sa vings Lea se Payment
-13,402 81,803
(9,304) 5.61%
Ta x on Residua l Va l ue
NPV
28,005
67,199
Resi dua l Val ue Net Ca sh Fl ow
5
-715,000
Depreci a ti on Ta x Sa vings Lea se Payment
-13,402 81,803
4.64%
Resi dua l Val ue Ta x on Residua l Va l ue Net Ca sh Fl ow
28,005
67,199
Ta x on Residua l Va l ue Net Ca sh Fl ow IRR
5
-715,000
81,803
Agar NPV = 0 dan IRR = 6.27% maka Lease payment harus $163.375 Pada Tax rate =34% Cost of debt = 9.5%
Loan Amortization schedule Borrowing Interest
715,000 9.50%
Year Beginning balance Annual payment Interest before tax Principal reduction Ending balance Tax rate Interest after tax
186,212 9.5%
1 715,000 186,212 67,925 118,287 596,713
2 596,713 186,212 56,688 129,524 467,189
3 467,189 186,212 44,383 141,829 325,360
4 325,360 186,212 30,909 155,303 170,057
5 170,057 186,212 16,155 170,057 0
44,831
37,414
29,293
20,400
10,663
34%
Annual Payment = PMT(Pretax Annual Rate, Term, -715000)
Untuk Leasing option #1,#2,#3 & #4 Tax rate Pre tax interest
Year
34%
Eq cost
9.50%
Disc rate
715,000 6.27%
Intrst. Paymt
Principal
Deprc.
Deprc.
Deprc. Tax
Residual CF
Loan Cash
After Tax
Payment
rate
before Tax
Tax Saving
After Tax
Outflow
0
Sum NPV
Lease Cash Outflow 155,040
160,003
162,350
164,760
102,326
105,602
107,151
108,742
1
44,831
118,287
20.00%
143,000
(48,620)
114,498
102,326
105,602
107,151
108,742
2
37,414
129,524
32.00%
228,800
(77,792)
89,146
102,326
105,602
107,151
108,742
3
29,293
141,829
19.20%
137,280
(46,675)
124,447
102,326
105,602
107,151
108,742
4
20,400
155,303
11.52%
82,368
(28,005)
147,698
102,326
105,602
107,151
108,742
5
10,663
170,057
11.52%
82,368
(28,005)
(67,199)
85,515
142,600
715,000
673,816
(229,097)
(67,199)
561,303
511,632
528,010
535,755
543,708
469,273
454,717
469,273
476,156
483,225
Tax rate P re tax i nte re st L ea se p ay me nt Year
34%
Leasing Payment
155, 040 Tax Savings
Forgone Resid.
Initial Purch.
After Tax
Assc. with Deprc.
Value After Tax
Price Save
- Incr. Cash Flow
buy & Borrow
buy & Borrow
155,040
14,556.03
5.32%
160,003
0
6.27%
(102,326) (102,326)
( 48,620)
(150,946)
162,350
(6,883.48)
6.72%
2
(102,326)
( 77,792)
(180,118)
164,760
(13,951.77)
7.19%
3
(102,326)
( 46,675)
(149,002)
4
(102,326)
( 28,005)
(511,632)
IRR
612,674
IRR over
1
0
715,000
Lease Paym.
NPV over
0
Sum
(130,332)
(28,005)
(67,199)
(229,097)
(67,199)
(95,204) 715,000
(92,929)
5.32%
L ea se p ay me nt Year
160, 003 Lease Pay
Tax Savings
Forgone Resid.
Initial Purch.
After Tax
Assc. with Deprc.
Value After Tax
Price Save
(105,602)
1
(105,602)
( 48,620)
(154,222)
2
(105,602)
( 77,792)
(183,394)
3
(105,602)
( 46,675)
(152,277)
4
(105,602)
( 28,005)
Sum
0 (528,010)
IRR
715,000
Lease Paym. - Incr. Cash Flow
0
5
609,398
(133,607)
(28,005)
(67,199)
(229,097)
(67,199)
(95,204) 715,000
(109,307)
6.27%
L ea se p ay me nt Year
162, 350 Lease Pay
Tax Savings
Forgone Resid.
Initial Purch.
After Tax
Assc. with Deprc.
Value After Tax
Price Save
(107,151)
1
(107,151)
( 48,620)
(155,771)
2
(107,151)
( 77,792)
(184,943)
3
(107,151)
( 46,675)
(153,826)
4
(107,151)
( 28,005)
Sum
0 (535,755)
IRR
715,000
Lease Paym. - Incr. Cash Flow
0
5
607,849
(135,156)
(28,005)
(67,199)
(229,097)
(67,199)
(95,204) 715,000
(117,052)
6.72%
L ea se p ay me nt Year
164, 760 Lease Pay
Tax Savings
Forgone Resid.
Initial Purch.
After Tax
Assc. with Deprc.
Value After Tax
Price Save
(108,742)
1
(108,742)
( 48,620)
(157,362)
2
(108,742)
( 77,792)
(186,534)
3
(108,742)
( 46,675)
(155,417)
4
(108,742)
( 28,005)
0 (543,708) 7 19%
715,000
Lease Paym. - Incr. Cash Flow
0
5 IRR
715,000
Lease Pay
5
Sum
Equity cost
9. 50%
606,258
(136,747)
(28,005)
(67,199)
(229,097)
(67,199)
(95,204) 715,000
(125,005)
Pada lease payment $160.003 Leasing akan sama pengaruhnya dengan buy & borrow
Scenario Eff.tax rate Pretax cost of debt After-tax cost of NPV of l oan (“borrow-and-buy”) IRR of loan (“borrow-and-buy”)
Leasing option #1 NPV of lease IRR of lease Lease advantage ove r bor.&by Leasing option #2 NPV of lease IRR of lease Lease advantage ove r bor.&by Leasing option #3 NPV of lease IRR of lease Lease advantage ove r bor.&by Leasing option #4 NPV of lease IRR of lease Lease advantage ove r bor.&by
A
B
C
D
34.00% 9.50% 6.27%
34.00% 13.00% 8.58%
0.00% 9.50% 9.50%
0.00% 13.00% 13.00%
$469,273 6.27% $155,040 $454,717 5.32% $14,556
484,546 8.58% $155,040 436,915 5.32% 47,632
$663,800 9.50% $155,040 651,863 8.61% $11,937
$671,253 13.00% $155,040 616,202 8.61% $55,051
$469,273 6.27% $0
$450,901 6.27% 33,645
$672,730 10.17% -8,930
$635,927 10.17% $35,326
$476,156 6.72% -6,884
$457,515 6.72% 27,031
$682,598 10.91% -18,798
$645,255 10.91% $25,997
$483,225 7.19% -13,952
$464,306 7.19% 20,240
$692,730 11.68% -28,930
$654,834 11.68% $16,419
Pada tax rate = 0, akan memperbaiki posisi leasing Naiknya cost of debt memperbaiki posisi leasing
Scenario
A
B
C
D
Eff.tax rate
34.00%
34.00%
0.00%
0.00%
Pretax cost of debt After-tax cost of debt
9.50% 6.27%
13.00% 8.58%
9.50% 9.50%
13.00% 13.00%
$469,273 6.27%
484,546 8.58%
$663,800 9.50%
$671,253 13.00%
484,376 498,593 7.13% (14,218)
501,993 479,073 7.13% 22,920
686,679 714,762 11.42% (28,082)
697,207 675,660 11.42% 21,547
NPV of lease
438,036 478,063
458,436 459,346
624,641 685,330
$640,997 $647,839
IRR of lease Lease advantage over borrowing
7.13% (40,027)
8.64% (911)
13.48% -60,689
13.48% (6,842)
NPV of loan (“borrow-and-buy”) IRR of loan (“borrow-and-buy”)
Faul haber Gmbh NPV of loan (“borrow-and-buy”)
NPV of lease IRR of lease Lease advantage over borrowing Honshu NPV of loan (“borrow-and-buy”)
Option III vs Faulhaber Tax
retax Interest 9.50%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
40%
6,887
25,113
26,274
14,314
16,350
13,479
10,633
7,812
34%
7,334
5,940
2,804
(5,597)
(3,355)
(6,378)
(9,365)
(12,317)
25%
7,941
5,426
1,529
(8,140)
(6,104)
(9,842)
(13,529)
(17,166)
15%
8,536
4,599
(200)
(11,286)
(9,575)
(14,154)
(18,663)
(23,102)
9.50%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
40%
396
(343)
(3,004)
(10,566)
(8,237)
(10,811)
(13,356)
(15,874)
34%
265
(1,128)
(4,264)
(12,665)
(10,423)
(13,447)
(16,434)
(19,385)
25%
29
(2,487)
(6,384)
(16,052)
(14,017)
(17,755)
(21,442)
(25,079)
15%
(287)
(4,223)
(9,022)
(20,108)
(18,397)
(22,976)
(27,485)
(31,924)
Option IV vs Faulhaber Tax
retax Interest
Option III vs Honshu Tax
Pretax Interest 9.50%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
40%
31,115
49,095
50,014
37,586
39,622
36,524
33,456
30,417
34%
33,143
31,448
28,017
19,045
21,287
17,987
14,730
11,514
25%
35,893
32,987
28,710
18,307
20,343
16,251
12,218
8,244
15%
38,565
34,134
28,854
16,844
18,555
13,532
8,591
3,730
12.5%
13.0%
Option IV vs Honshu Tax
Pretax Interest 9.50%
10.0%
10.5%
11.0%
11.5%
12.0%
40%
24,624
23,639
20,737
12,706
15,035
12,235
9,467
6,731
34%
26,075
24,380
20,948
11,976
14,219
10,919
7,662
4,446
25%
27,980
25,075
20,797
10,394
12,430
8,338
4,306
331
15%
29,743
25,312
20,032
8,022
9,732
4,709
(231)
(5,092)
1.
2.
3.
4.
Dari keempat option yang akan diambil untuk tax rate 34 % dan cost of debt 9.5 % hanya pada option 4 untuk leasing payment 164,760 yang memberikan IRR diatas cost of capital (discount rate) terkecuali pada tax rate diatas 40 % option 3 bisa dijadikan pilihan. Untuk Avanjet pada tax rate 34 % dan pretax interest 9.5 % untuk lease payment dibawah 160,003 akan lebih menguntungkan dibandingkan dengan buy & borrow dengan selisih NPV = 0 dan IRR = after tax interest Bahwa tax rate 0 % atau naiknya pretax interest akan memperbaiki posisi option leasing dibandingkan dengan buy & borrow. Untuk option 1 dan 2 option leasing lebih baik daripada buy & borrow kecuali pada tax = 0 %, pada option leasing mulai menguntungkan pada tax rate diatas 40 % dengan pretax diatas 10%
Untuk option 3 leasing option lebih menguntungkan pada : - - Tax 34 % dengan pretax interest diatas 11 % - Tax 40 % dengan pretax interest diatas 10 % 6. Dibandingkan dengan Faulhaber untuk option 3 lebih menguntungkan pada : - Tax 34 % dengan pretax interest dibawah 10.5% - Tax 40 % dengan berapapun pretax interest Sedangkan untuk option 4 lebih menguntungkan dengan tax rate diatas 25 % dan pretax interest sama dengan atau dibawah 9.5 % 7. Jika dibandingkan dengan Honshu option 3 dan option 4 lebih menguntungkan dengan semua tax dan pretax interest kecuali dioption 4 dengan pretax diatas 12.5 % honshu lebih diuntungkan. 5.
Berdasarkan dari analisa perhitungan bahwa proposal yang harus diajukan pada Avanjet direkomendasikan pada Option 3 dengan syarat : -
Lease payment per tahun $ 162,350
-
Waktu leasing adalah 5 tahun
-
Tax ratenya diatas 40%
Tax rate 25% dan 34% dengan pretax interest ≤ 10.5%, sedangkan tax rate 15% , pretax interest yang digunakan ≤ 10%
TERIMA KASIH
