AN ANALYSIS OF FINANCIAL RATIOS AS A TOOL TO EVALUATE THE FINANCIAL PERFORMANCE OF PT ARITA PRIMA INDONESIA TBK

Abstract

This study aims to evaluate the financial performance of PT Arita Prima Indonesia Tbk over the period 2015–2024 using a financial ratio analysis approach. Operating in the industrial machinery and components sector, the company faces challenges arising from fluctuating market demand, increasing production costs, and intense competition within domestic and global markets. The research adopts a quantitative descriptive method utilizing secondary data derived from the company’s audited annual financial reports. The analysis focuses on key financial indicators, including liquidity ratios (Current Ratio, Quick Ratio, Cash Ratio), profitability ratios (Return on Investment, Return on Equity, Gross Profit Margin, Net Profit Margin), solvency ratios (Debt to Asset Ratio, Debt to Equity Ratio), and activity ratios (Total Asset Turnover, Inventory Turnover). The findings reveal that the company maintains a relatively strong liquidity position, with an average Current Ratio of 165.05%, Quick Ratio of 58.63%, and Cash Ratio of 16.68%, reflecting its ability to meet short-term obligations. Profitability performance remains moderate, as indicated by an average ROI of 4.17%, ROE of 6.74%, GPM of 58.63%, and NPM of 8.86%, showing fluctuations during the observed period. Meanwhile, solvency ratios (DAR 0.37x, DER 0.61x) suggest a healthy capital structure with low financial risk, while activity ratios (TATO 0.47x, IT 0.54x) indicate the need for improved asset utilization. Overall, the results conclude that PT Arita Prima Indonesia Tbk demonstrates stable financial performance with sound liquidity and capital structure, though profitability and asset efficiency require enhancement to strengthen long-term competitiveness