Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades.
IFP, Indonesia is one of foreign timber logging operate in Kalimantan (Borneo) island. With Kristin Daniel as the planner manager since 2001. IFP Ltd did business more than 25 countries in the world but Indonesia is the only one country it has business in South East Asia.
The company has original business in trading coal, metals and shipping industry.
SWOT ANALYSIS
Strength
The company use simplest…show more content… The shareholder and stockholder would think that company want to profit themselves.
IFP Indonesia has a low cash margin with several reasons. Indonesian government force every foreign company to create more local jobs with add extra processing system, and also to gain more value add for the timber output. Government also urge them to join into processing ventures. Indonesian government also banned temporarily several foreign logging industries to give opportunity for local logger to forestry projects.
QUESTION AND ANSWER
1. A
From the calculation above, IFP Ltd Indonesia actually have a big potential to generate profit, where we can see from Profit Margin on Sales IFP Ltd Indonesia able to generate 8 cents per each USD of sales. Here IFP Ltd Indonesia has problem that the turnover of the product quite low. It makes the company unable to maximise the profit generation.
IFP Ltd Indonesia has a secure financial, no serious long term debt in their loan, but the company do not have enough cash reserve where in some case when the company need immediate payment, the company unable to provide it.
Both scenario shows that actually IFP Ltd Indonesia do not brave enough to expand the business. IFP ltd Indonesia do not take extra loan, and expand the business more aggressive to gain more profit where actually they could do the business better.
Profit margin IFP Ltd Indonesia is quite high. The company able to generate USD 0.08 (8 cents) for
