Impact of diversification of CPO to biodiesel on financial performance and stock price of palm oil plantation company

Abstract

Biodiesel is a renewable energy source that has the potential to be developed in Indonesia. The purpose of this study was to analyse whether there were differences in financial performance and stock prices of oil palm plantation companies before and after the policy mandatory of CPO diversification into biodiesel. The financial ratios analysed consist of: Current Ratio, Debt to Asset Ratio, Debt Equity Ratio, Net Profit Margin, Return On Equity, and Return On Asset. To answer these objectives, the were conducted Paired Sample t-Test and the Wilcoxon Signed Rank Test. This research resulted that Current Ratio negative shows significant differences at PT Bakrie Sumatera Plantations Tbk. and positively significant at PT London Sumatra Indonesia Tbk. Debt to Asset Ratio and Debt to Equity Ratio show significant negative differences in PT London Sumatra Indonesia Tbk. and positively significant at PT Tunas Baru Lampung Tbk. Net Profit Margin shows a significant positive difference at PT Tunas Baru Lampung Tbk. Return on Equity Ratio and Return on Asset Ratio show significant negative differences in PT Bakrie Sumatera Plantations Tbk. The policy mandatory of CPO diversification into Biodiesel doesn't show a significant difference to the share price for the period 2004-2013.