Business Investment Analysis Integration of Y Only Glass Processor and Applications

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American International Journal of Business Management (AIJBM)

ISSN- 2379-106X, www.aijbm.com Volume 5, Issue 03 (March-2022), PP 96-100

Business Investment Analysis Integration of Y only Glass


Processor and Applications
Olivia Yoestin1, Tantri Yanuar Rahmat Syah2, Semerdanta Pusaka3, Ketut
Sunaryanto4
1
Faculty of Economics and Business, EsaUnggul University – Jakarta.
2
Faculty of Economics and Business, EsaUnggul University – Jakarta.
3
Faculty of Economics and Business, EsaUnggul University – Jakarta.
4
Faculty of Economics and Business, EsaUnggul University – Jakarta.
*Corresponding Author: Olivia Yoestin1

ABSTRACT: In 2021, the Industry sector is increasing rapidly with the value of construction rising
high and the growth of apartments and occupancy to increase the need for glass processors and
applications so that this increase makes an opportunity for Yonly Glass business. This makes business
increasingly attractive, so companies need to create and plan financial strategies, especially investment
strategies. To capture this investment strategy, the company must have added value to financial
investment planning. PT Yonly Glass, as a company engaged in Glass Processors and Applications,
needs to have a sound financial strategy to compete with competitors. To compete and survive requires
concentration on product development and analysis of investment strategies and economic efficiency.
The study uses inductive qualitative methods where all sample data and measurement IRR, NPV, PP,
and ROI show positive value. The business is viable to run and be further developed. The value of the
investment by calculating the IRR, NPV, and payback period of the business plan provides an idea that
the glass processor and application business is still excellent in times of pandemics and crises, so this
financial strategy is very appropriate and appropriate like Yonly Glass.

Keywords: InvestmentAnalysis, NPV, IRR, ROI, Payback Period.

I. INTRODUCTION
In 2021 the Industrial Sector is expected to increase rapidly, with the value of construction reaching Rp
16.76 trillion or up 48.13%. The sentiment of construction actors on the condition of the Indonesian construction
market 2021 is based on a surveyconducted by BCIEconomicson 350 respondents consisting ofdevelopers,
architects and consultants, contractors, and sub-contractors in Indonesia.The phenomenonand changes
inlifestylethatincreaseandall-aroundinstantmake apartment development in Indonesiacontinue togrow.In the
inner and outer areas of Jakarta, the apartment market is still quite tempting. Until now, there are a total of
166,200-unit apartments located in the Jakarta area. This figure is included with flats that are ready to live or
still in the process of development. Projections for 2019 to 2023 are likely to increase to 50,000 units.
Meanwhile, in the area outside Jakarta or around Bodetabek, the total supply of 97,200 units in the Bodetabek
area is dominated by units still under construction. This figure is predicted to grow to 129,000 units from 2019
to 2022—twice as many as the Jakarta area.
Based onthe value of building construction in 2016 was 153.08 trillion, decreased in 2017 which was
150.36 trillion, fell again in 2018, which was 140.51 trillion. After experiencing a decrease for three consecutive
years from 2016-2018, the value of building construction increased by 4.9%, 147.77 trillion, and in 2020, again
experienced an increase of 2.1%, which is 150.7 trillion.Thenthe projection in 2021 can increase by 6.7%, which
is 160.8 trillion. Large-scale social restrictions (PSBB) that have been in place for quite some time have made
the potential demand for property products in almost all sectors into a large market that immediately enters the
market. Other assumptions that make 2021 more optimistic are Indonesia's economic growth of around +5%, the
COVID-19 vaccine program that will begin in mid-2021, and the implementation of omnibus law.These three
things are the main drivers to strengthen purchasing power, increase market confidence and confidence,public
safety, and encourage better investment opportunities in the property sector. This applies to all property sectors,
whether residential, office, shopping center, industry, etc. The combined capacity of sheet glass production from
each manufacturer found an increasing trend from year to year (2016-2020). This is due to the increasing need
for sheet glass from both local and export requirements.
PT. Yonly Glass is a company engaged in the glass industry with activities to process sheet glass
according to the design of the main contractorand the installation (applicator) of Glass in its building projects.
PT. Yonly Glass is present to provide convenience in serving the needs of Glass in the massive demand for high

*Corresponding Author: Olivia Yoestin1 www.aijbm.com 96 | Page


Business Investment Analysis Integration of Y only Glass Processor and Applications

rise building construction, in this case, the structure of Apartments, Housing, Hospitals, and office buildings
throughout Indonesia.In addition,itcanalsogiveconsumers a choiceindetermining the needsandservicesandtariffs
that are following their needsandaffordablePT. Yonly Glass also has experts who are professionals in glass
processors and glass installation on buildings.To increase the business required analysis of business feasibility
assessed using DCF (discounted cash flow) with NPV parameters. This model will ultimately show the
considerable net value of the investment to investors.
Other calculations are IRR, ROI, and discounted payback period, which provides information that can
support business feasibility analysis. (Harmono 2016). With this feasibility analysis, researchers tried to create a
study entitled "BusinessInvestment Analysis integration of Yonly Glass Processors and Applications."The
purpose of this research is to provide an overview of the investment analysis conducted by Yonly Glass,
including the parameters used and the justification for conducting a feasibility analysis using Net Present Value
(NPV), Internal Rate of Return (IRR), Return on Investment (ROI), and Payback Period (PP)(Marsiwi et al.,
2019). In addition, the purpose of this research is also to increase innovations related to products, processes,
organizations, and business models for companies to always be ready for future market changes(Prasetyo et al.,
2019)

II. LIBRARY REVIEW


Net Present Value (NPV)
Net Present Value (NPV) is a net financial assessment that exists in the company after deducting other
costs so that the value of the company's existing added or lack of money can be used as a reference to assess the
viability or not of the company's finances. In other words, the assessment made for Net Present Value (NPV) is a
net financial cash flow. Understanding Net Present Value (NPV) in the form of Net Present Value (NPV)
calculation activities in a company needs to be done by the company's competent financial personnel. This is
because the miscalculation of existing values can affect the company's level of small profit income.Net Present
Value (NPV) can be associated with company funds that experience addition when existing funds are no longer
mixed with investment funds. This can be attributed to the total net capital obtained by the company with added
net income. For this reason, According toNet Present Value (NPV) is interpreted as a financial analysis used to
determine whether or not the business made by the company is seen through the present value of the net cash
flow to be received by the company concerned compared to the present value of investment capital issued by the
companyThis is the financial analysis of the company reviewed according to investment expenditures made by
the company

Internal Rate of Return (IRR)


IRR or Internal Rate of Return is an evaluation instrument used to decide whether a capital owner
wants to invest or not, where the IRR > the level of profit hinted, the project is accepted, but if the IRR < the
required level of profit, the project is deemed unacceptable. An IRR is more an indicator of the efficiency of an
investment, as opposed to npv, which indicates the value or amount of money. IRR is an effective compounded
annual return rate generated from an investment or the yield of an investment. A project/investment can be made
if the rate of return is greater than the return received if we invest elsewhere (banks, bonds, etc.) (Kusumaet
al.,2021). So It is necessary to compare the IRR. to other investment alternatives. IRR has disadvantages where
IRR is commonly used for decision-making for single projects instead of mutually exclusive projects (projects
that eliminate each other). For mutually exclusive projects, the NPV criteria are more dominantly used where
projects with larger NPVs will be selected even if they have a smaller IRR. From the graph, a project will
probably have several discount rates that make the value OF NPV = 0 (there is negative net income between
positive net income years), so the IRR value can be more than one, or we are faced with several choices of IRR
values. In terms of reinvestment, IRR also has weaknesses, so that MIRR (Modified Rate of Return) is
used.Although academically, NPV is more dominantly chosen, surveys indicate that executives prefer IRR over
NPV.This is because managers or capital owners are easier compare investments/projects of different
magnitudes in the form of % rate of return (IRR) compared to the amount of money (NPV). (Harmono 2016).

Payback Period
The payback period is the method most often used by business people to measure the length of
investment funds reinvested as before. Therefore, the calculation results are expressed in units of time,i.e., years
or months. The Payback Period method is used to look at the payback period of capital that has been issued. The
paybackperiod is a period needed to recoup investment expenses (initial cash investment) using cash flow. In
other words,the Payback Period is the ratio between initial cash investmentwithcash flow which results in a unit
oftime.This method has a disadvantage that ignores the time value of money(time value of money). The faster
the return-on-investment period, the smaller the investment risk, and the investment project are worth running.

*Corresponding Author: Olivia Yoestin1 www.aijbm.com 97 | Page


Business Investment Analysis Integration of Y only Glass Processor and Applications

Conversely, the longer the return, the greater the investment risk, and the investment project is less
feasible / not worth running. (Harmono 2016).To address one of the method's shortcomings, specifically that it
ignores the time value of money, it is tried to improve the method by changing cash inflow into the present value
of the investment plan and then calculatingthe payback period.Thus, the cash flow used is cash flow that has
been discounted based on interest rate / required rate of returnoropportunity cost

Return on Investment (ROI)


Return on Investment (ROI) is a ratio measuring a company's success in generating shareholders' profit and
loss. Therefore, ROI is considered a representation of a shareholder's wealth or the value of a company. Let's
look at the existing ROI trends. It can be seen that the company, in generating profits for shareholders,
experienced an increase that appeared in the rising value of the ROI ratio. (Harmono 2016).Return on
Investment (ROI)on Y only Glass is a ratio measuring Arena Corner's successin generating profit and loss in5
years. Thus, the ROI of Y only Glass is a formofrepresentation of the wealth of Y only Glass and the value of
the Y only Glass company. Let's look at the existing ROI trends. It can be seen that the company, in generating
profits for shareholders, experienced an increase that appeared in the rising value of the ROI ratio. (Harmono
2016)

III. METHOD
This study uses qualitative research methods where the data obtained by the author through
observation, analysis of documents, and records or analysis of reports are used as a basis in the calculation of his
research (Susanti et al., 2020). Furthermore, the authorof nature analyzed the feasibility of PTY only Glass's
business investment using severalmethods of calculating feasibility. This is because the miscalculation of current
value can affect the company's significant level of small profit income. As a result, Net Present Value (NPV) is
used in financial analysis to determine whether or not the business being conducted by the company is
profitable. This is determined by comparing the company's present value of the net cash flow to be received to
the current value of the investment capital issued by the company over the next one to five years. Return on
Investment (ROI)on Y only Glass is a ratio measuring Arena Corner's successin generating profit and loss in 1-5
years. The Payback Period method on Y only Glass issued to measure the length of investment funds that have
been used to beabletoreturnfor1-5years.At the same time, the Internal Rate of Return methodmeasures the level
of efficiencyand the statusofthe cashvaluein thefuture so that the valueused asabenchmarkisabovethe capital.

IV. RESULT AND DISCUSSION


Investment Feasibility Analysis
Investment feasibility analysis can be understood as an action taken to determine the prospects of an
investment project that underlies the decision-making accepted or rejected investment. Before making an
investment decision, it is essential to conduct a feasibility analysis to avoid investing in unprofitable projects or
activities. To determine the viability of an investment, there are at least four methods carried out by PT Yonly
Glass, namely ROI, NPV, PP,and IRR.Based on the measurements and calculations conducted by PT Yonly
Glass, the following research results were obtained.

Net Present Value (NPV)


Calculation of Net Present value
PT. Yonly Glass conducts an investment feasibility assessment with an NPV approach calculated from
the difference in the present value of the investment with the expected net cash flow of the project or investment
in the future or a specific period. If: NPV value > 0, means the acquisition to be executed, projected to bring
benefits to the company, then the Project is recommended to run. If: NPV value = 0, it means that the
investment to be carried out is anticipated to bring no profit or loss for the company, then it is necessary to
discuss further other benefits obtained if the investment continues. If: Npv value < 0 means the acquisition to be
executed projected to bring losses for the company, then it is not an investment, so the project is recommended
to be canceled.

*Corresponding Author: Olivia Yoestin1 www.aijbm.com 98 | Page


Business Investment Analysis Integration of Y only Glass Processor and Applications

Table 1. Net Present Value


Year Ct r (1 + r) t NPV

1 43,875,000,000 0,035 1,035 42,391,304,348


2 51,942,515,625 0,035 2,070 25,093,002,717
3 47,858,162,000 0,035 3,105 15,413,256,683
4 65,948,363,800 0,035 4,140 15,929,556,473
5 76,171,246,956 0,035 5,175 14,719,081,537
Total 113,546,201,759
C0 50,000,000,000
NPV 63,546,201,759
IRR 3,85%

From the results of calculations, the company's NPV for five years then theNPVvalue is Rp
63,546,201,759 so that the results of NPV> 0 means that the investment made provides benefits for the company
then The project is feasible..

Internal Rate of Return (IRR)


The calculation of the IRR can be the basis of whether an investment is worth it or not. If the analysis
of the IRR is greater than the interest rate, then the investment plan can be continued.From the results of the
calculation of IRR Yonly Glass, the value of IRR is higher than the interest rate set, then the investment that
will be made will be assessed will return capital. IRR = r1-(NPV1x (r2-r1)/(NPV1-NPV2). The results of the
IRR calculation conducted by PT Yonly Glass resulted in an ROI value of 3.85% means that the VALUE of the
IRR is greater than the set interest rate, so that This investment may be investing strategy may be maintained.
Increased.

Payback Period (PP)


The payback Period measures the speed of return on investment—units of measure produced in the
form of time. If the PBP value is faster or shorter than required, it means that the investment has eligibility.
Conversely, if the PBP value is slower or longer, it indicates that it does not look like an investment. Y only
Glass established Payback Period within four years. Based on calculations carried out by Y only Glass,
payback period or investment period of 1 Year 1 Month 18 days.

Return on Investment (ROI)


ROI is used in companies as a measure of management efficiency. This ratio is quantified by percentage. If the
ROI is negative, the investor can reconsider his investment because the investment is worth a loss. Jill ROI is
positive, which means it provides benefits.

Table 2. Return on Investment


Years Return on Investment Remarks
1 778% Positive
2 939% Positive
3 1071% Positive
4 1252% Positive
5 1462% Positive

On the Return of Investment (ROI) table, it appears that the firstyearhas a positive percentage of 778 percent
during the investment year. This explains that the business is quite attractive for investors to make investments
with traditional accounting calculations. Furthermore, inthe secondyear witha positivepercentagevalue
of939percent during the second year ofacquisition.In thethird year, return of investment with apositive
percentage valueof1071percent.And the fourth-year return of investment valuesa positivepercentage of
ROIof1252percent, andthefifth-year return of investmentpositivepercentagevalueof1462percent. This explains
that this business is calculated withMeticulouslyworthrunning.
The ROI calculation of PT Yonly Glass from year 1 to year 5 shows a positive number so that this
business can provide profits and can becontinuedandrun.

*Corresponding Author: Olivia Yoestin1 www.aijbm.com 99 | Page


Business Investment Analysis Integration of Y only Glass Processor and Applications

V. CONCLUSION
From the results of net present value, payback period, Internal Rate Return and Return on Investment in
years 1-5, then the conclusion of this study explains that the processor business and Y only glass application
Glass is a plan and investment analysis using Net Present Value (NPV) in the positive category and worth
runningbecause many companiesarenot able toutilizegoodinvestmentopportunitiesinprojectswith net present
value.The analysis of the Internal Rate Return (IRR) method also shows a positive value. In addition, Return on
Investment (ROI) also indicates a positive value with an average above 20%. At the same time, this business's
Payback Period (PP) also shows a positive value with the payback of 1year, one month18 Days. Overall, this
analysis provides good information to investors to provide their investments to Y only Glass. In addition, for
further research, it is necessary to examine other fundamental factors such ascost factors and asset
structureordepreciationthatcanimpact investor interest in investing in Y only Glass.

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*Corresponding Author: Olivia Yoestin1


1
Faculty of Economics and Business, EsaUnggul University – Jakarta.

*Corresponding Author: Olivia Yoestin1 www.aijbm.com 100 | Page

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