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Financial Performance Analysis Using Break Event Point as Profit Planning at PT. FKS Food Sejahtera Tbk 2018-2021

Introduction

In today's competitive business landscape, understanding the financial performance of a company is crucial for making informed decisions and achieving long-term success. One of the key indicators of a company's financial health is the break-even point (BEP), which represents the point at which the total income equals the total cost, resulting in neither profit nor loss. This article aims to analyze the financial performance of PT. FKS Food Sejahtera Tbk, a company engaged in the modern food processing industry, using the break-even point as a profit planning tool for the period 2018-2021.

Background of the Company

PT. FKS Food Sejahtera Tbk is a leading company in the modern food processing industry, with a primary focus on manufacturing and processing coconut fiber. The company's products are widely recognized for their quality and taste, making it a popular choice among consumers. However, like any other business, PT. FKS Food Sejahtera Tbk faces various challenges, including increasing operational costs, raw material price fluctuations, and intense market competition.

Methodology

This research employs a qualitative research approach, emphasizing the comparative inference process and analysis of the dynamics of phenomena observed using scientific logic. Data collection techniques involve documentation, while data analysis applies break-even points and security margins. The analysis aims to determine the level of sales required to maintain operational continuity and achieve profits during the 2018-2021 period.

Analysis of Break Even Point (BEP)

The break-even point is a critical concept in financial analysis, as it represents the point at which the total income equals the total cost, resulting in neither profit nor loss. Through BEP analysis, companies can plan profits and minimize loss risk. Based on the results of the analysis conducted, the following are the results of the break-even point of PT. FKS Food Sejahtera Tbk:

Break point 2019: Rp. 1,368,003,460,207,61
Break point 2020: Rp. 1,857,337,931,034.48
Break point 2021: Rp. 1,879,233,944,954.13

As shown in the results above, there was a significant increase in break-even during the 2019-2021 period. This increase could be indicated as a response to increased operational costs or expanding production capacity. In this context, companies must be able to maintain sales above the BEP level to ensure business continuity and achieve profits.

Financial Performance Dynamics

From the results of the analysis above, there was a significant increase in break-even during the 2019-2021 period. This increase could be indicated as a response to increased operational costs or expanding production capacity. In this context, companies must be able to maintain sales above the BEP level to ensure business continuity and achieve profits.

Increasing the break-even point also reflects the need for a more efficient strategy in cost management. With the increasing price of raw materials and other operational costs, it is essential for PT. FKS Food Sejahtera Tbk to review the cost structure and product pricing strategy. The company must also consider product innovation and marketing that is more aggressive to attract more consumers, so that sales can increase and exceed break-even.

Security Margin as a Performance Indicator

In addition to BEP, security margin is also an important indicator in financial performance analysis. Security margins show how far the actual sales can go down before the company reaches the break-even point. The greater the security margin, the safer the company's financial position. In dealing with market fluctuations and economic uncertainty, companies with high security margins have better survival opportunities.

Conclusion

Through financial performance analysis using Break Even Point, PT. FKS Food Sejahtera Tbk can understand the minimum sales needs needed to maintain operational continuity. Increasing the break-even point from year to year shows the challenges faced by the company, which requires improvement strategies in cost management and increased income. By understanding BEP and security margin analysis, companies are expected to be able to plan profits more effectively and face changes in market conditions with more prepared. This analysis is not only beneficial for managerial decision making, but also provides guidance for stakeholders in assessing company performance in this competitive sector.

Recommendations

Based on the analysis conducted, the following recommendations are made:

Review cost structure and product pricing strategy: PT. FKS Food Sejahtera Tbk must review its cost structure and product pricing strategy to ensure that it remains competitive in the market.
Implement cost management strategies: The company must implement cost management strategies to reduce operational costs and increase efficiency.
Invest in product innovation and marketing: PT. FKS Food Sejahtera Tbk must invest in product innovation and marketing to attract more consumers and increase sales.
Monitor market fluctuations and economic uncertainty: The company must monitor market fluctuations and economic uncertainty to ensure that it is prepared for any changes in the market.

By implementing these recommendations, PT. FKS Food Sejahtera Tbk can improve its financial performance and achieve long-term success in the competitive food processing industry.
Q&A: Financial Performance Analysis Using Break Event Point as Profit Planning at PT. FKS Food Sejahtera Tbk 2018-2021

Introduction

In our previous article, we analyzed the financial performance of PT. FKS Food Sejahtera Tbk, a company engaged in the modern food processing industry, using the break-even point (BEP) as a profit planning tool for the period 2018-2021. In this article, we will answer some of the frequently asked questions related to the analysis.

Q: What is the break-even point (BEP)?

A: The break-even point (BEP) is the point at which the total income equals the total cost, resulting in neither profit nor loss. It represents the minimum level of sales required to maintain operational continuity and achieve profits.

Q: How is the BEP calculated?

A: The BEP is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the difference between the selling price and the variable costs per unit.

Q: What is the significance of the BEP in financial analysis?

A: The BEP is a critical concept in financial analysis, as it represents the point at which the company can break even and start making profits. It helps companies to plan profits and minimize loss risk.

Q: What are the implications of increasing the BEP?

A: Increasing the BEP can indicate a response to increased operational costs or expanding production capacity. In this context, companies must be able to maintain sales above the BEP level to ensure business continuity and achieve profits.

Q: What is the role of security margin in financial performance analysis?

A: Security margin is an important indicator in financial performance analysis, showing how far the actual sales can go down before the company reaches the break-even point. The greater the security margin, the safer the company's financial position.

Q: How can companies improve their financial performance using BEP and security margin analysis?

A: Companies can improve their financial performance by:

Reviewing cost structure and product pricing strategy
Implementing cost management strategies
Investing in product innovation and marketing
Monitoring market fluctuations and economic uncertainty

Q: What are the benefits of using BEP and security margin analysis in financial performance analysis?

A: The benefits of using BEP and security margin analysis in financial performance analysis include:

Improved understanding of the minimum sales needs required to maintain operational continuity
Enhanced ability to plan profits and minimize loss risk
Better preparedness for changes in market conditions
Improved decision making for managerial and stakeholders

Q: Can BEP and security margin analysis be applied to other industries?

A: Yes, BEP and security margin analysis can be applied to other industries, as they are general concepts that can be applied to any business.

Conclusion

In conclusion, the break-even point (BEP) and security margin are critical concepts in financial analysis, providing insights into a company's financial performance and helping to plan profits and minimize loss risk. By understanding BEP and security margin analysis, companies can improve their financial performance and achieve long-term success in the competitive business landscape.