MM 5007

FINANCIAL MANAGEMENT

KRAKATAU STEEL CASE B

SYNDICATE 3
KRISTIANTO WICAKSANA (29114305)
JONATHAN SOMBA (29114307)
FLORENTINA ANDRE (29114312)
RATNA SARI RADITHA NING TYAS (29114357)

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
2015

EXECUTIVE SUMMARY
Short brief of project

I. Objective
Bambang Supriyatno wants to invest in Krakatau Steel group. Before he
put his money on Krakatau Steel group, he needs to check the financial
ratios and also the Moodys scoring. These assessments are needed to
determine whether PT Krakatau Steel is a good place to invest.
II. Analysis
Bambang Supriyatno use several ratios to compare Krakatau Steel financial
performance to other similar industry. Using The Moody Scoring, Bambang need
several indicators to use as shown below

To analyze using Moodys there are seven rating categories. Those categories vary from
Caa to Aaa. Caa is the worst rating that a company can achieve while the Aaa rating is
the highest one. Score attached for each rating is also vary, from zero to six. Below are
the indicated rating categories in Moodys.
Aaa

Aa

Baa

Ba

Caa

The scoring result of Krakatau Steel is shown below:

The table above show the ratio analysis needed to calculate the Moodys
Rating Score. From the table we can see that the total score and rating for
Krakatau Steel is slightly better than the other local and international
company. This can be seen from the broad rating factor categories:
operating performance and volatility which get higher score than other
categories.

III.

Conclusion and Recommendation

3.1 Conclusion
From those Krakatau Steel conditions above, we can see that the Krakatau
Steel is a good place to invest. Based on calculation above The Krakatau
Steels Moodys rating score is quite good, compared to other company.
Moreover, we can see that The Krakatau Steels Moodys rating score is
Baa3, which is indicated as a healthy company.
3.2 Recommendation :

If this analysis is used as decision base wheter to invest or not, Bambang

Supriyatno should invest in Krakatau Steel as their Moodys rating score is
better than the other Industries. As we can see, from average year 2008 to
2010, Krakatau Steels Moodys rating score is Baa3.