COMPARATIVE STUDY OF FINANCIAL PERFORMANCE BEFORE AND AFTER ACQUISITION

ABSTRACT: This study aims to analyze the differences in the company’s financial performance between beforeand after being acquired based on financial ratios. This research was conducted at acquired companies listed onthe Indonesia Stock Exchange for the period 2013-2017. The population of this study was 559 companies. Thesampling method used was non-probability sampling method with a purposive sampling approach. The sampleobtained was 5 companies. The method of collecting data used was the non-participant observation method. Thedata analysis technique used paired sample t test (paired sample T-test) and Wilcoxon signed ranks test. Basedon the analysis, it is found that financial performance is measured by current ratio (CR), total debt to total assets(DAR), long term debt to equity (DER), return on total assets (ROA), return on equity (ROE), net profit margin(NPM), total assets turnover (TATO), and earnings per share (EPS) found no significant differences before andafter the acquisition. The economic motive of the company cannot be achieved, but the motives that are thoughtto underlie the acquisition are non-economic motives and diversification. This research is expected to contributeto investors and company management in taking action to expand the company.

Keywords: financial performance, acquisitions, and financial ratios