POTENTIAL DEVELOPMENT IPO COMPANY BY USING FINANCIAL PERFORMANCE AND DCF ANALYSIS (CASE STUDY ON 5 COMPANIES NEGATIVE EARNINGS)

Abstract

Every company that wants to get a source of funds through the issuance of shares must make Initial Public Offering to the public. Companies that go public mean that the company offers ownership of the company to be owned by the wider community. IPO assessment is one of the most valuable factors in the market. Such signals can confirm or reject management's beliefs about future growth opportunities - with real implications for the real economy through the work and investment of the company. This study was conducted to answer the problems faced by investors when determining the company that conducts an IPO but its financial statements are losing money or in the development stage. The methodology used is financial ratio analysis with ten metrics and the results are validated with Moody's Financial Metricsâ„¢ data report September 25, 2017 and valuation of the five Companies that have negative earnings. The results of this study show that out of 5 companies only one company is categorized as moderate risk whereas from valuation there is a company whose valuation value is higher than the asset value of the company itself.