Analysis Of Local Government Capital Participation Policy Towardsperformance Of Public Company In The Lematang Enim Drinking Water Region Muara Enim Regency

Dini Harlini; Taqqiyah  Ulinnuha; Mukhtaruddin

doi:10.63922/ijevss.v5i04.6730

Dini Harlini Master of Accounting Science Program, Sriwijaya University, Indonesia
Taqqiyah Ulinnuha Master of Accounting Science Program, Sriwijaya University, Indonesia
Mukhtaruddin Department Of Accounting, Sriwijaya University, Indonesia

DOI: https://doi.org/10.63922/ijevss.v5i04.6730

Keywords: Equity Investment, Company Performance.

Abstract

This study aims to determine the amount of equity investment provided by the Muara Enim Regency Government to Perusahaan Umum Daerah Air Minum Lematang Enim and to investigate its impact on the company's performance. The object of this research is Perusahaan Umum Daerah Air Minum Lematang Enim in Muara Enim Regency, covering a 10-year study period from 2020 to 2025. Data collection techniques included observation, interviews, and documentation. The data analysis technique used a quantitative approach evaluating financial performance formulas, specifically Return on Equity (ROE), Operating Ratio, Cash Ratio, and collection effectiveness. The results of this study show that the amount of equity investment from the Muara Enim Regency Government to Perusahaan Umum Daerah Air Minum Lematang Enim varied over the years, and the company did not receive any equity investment in certain years. The impact of the equity investment on company performance is reflected in the Return on Equity, Operating Ratio, Cash Ratio, and Collection Effectiveness, which have not yet shown a positive influence on the company.

References

Alfian, T., Apriliawati, Y., & Accounting, J. (2024). Analysis of local government capital participation in improving financial performance (Case study on public companies in the Tirtawening Region, Bandung City). Indonesian Accounting Research Journal, 4(2), 201–212.
Citra Sarasmitha, R. G. P. (2023). Financial performance of Batu City BUMD: Financial ratio approach and analysis of budget effectiveness and efficiency. Journal of Accounting, 19(01), 174–190.
Dharmayanti, G. A. P. C., Dewi, A. A. D. P., & Laksmana, I. B. G. L. (2024). Performance improvement strategy of the Denpasar City Regional Drinking Water Company (PDAM). Journal of Civil Engineering Construction, 1(1), 47–54. https://doi.org/10.24002/JKTS.V1I1.9613
Egbunike, C. F., & Okerekeoti, C. U. (2018). Macroeconomic factors, firm characteristics and financial performance: A study of selected quoted manufacturing firms in Nigeria. Asian Journal of Accounting Research, 3(2), 142–168. https://doi.org/10.1108/AJAR-09-2018-0029
Kayana, I. M. G. K. S., Dharmanu, I. P., & Lukman, J. P. (2024). Performance of the Tirta Amertha Jati Regional Drinking Water Company (PDAM) in Jembrana Regency. Socio-Political Communication and Policy Review, 1(4), 123–135. https://doi.org/10.61292/shkr.147
Nova, G. D. A., Feblin, A., Kenamon, M., & Putri, Y. I. (2024). Analyzing the relationship between corporate governance and financial performance in BUMDs in Indonesia. Equity: Journal of Economics, 11(2), 33–41. https://doi.org/10.33019/equity.v11i2.199
Nur, M. (2020). Analysis of local government capital participation policy on the performance of Regional Drinking Water Companies (PDAM) Parepare City. Economos: Journal of Economics and Business, 3(2), 51–56. https://doi.org/10.31850/ECONOMOS.V3I2.671
Purba, S., Panggabean, M. A., Purba, T. B., Manalu, E., & Sitanggang, C. A. (2024). Analysis of financial statements to assess the financial performance of the Regional Government of North Tapanuli Regency. Scientific Journal of Raflesia Accounting, 10(2), 390–404. https://doi.org/10.53494/jira.v10i2.408
Rachim, R., Widya, U., & Mahakam, G. (2022). Financial performance analysis. Journal of Accounting, 4(1), 96–106.
Wibowo, M. A., Halim, A., & Hamid, M. (2017). Analysis of the effect of local government capital participation on asset growth, efficiency, and financial performance of BUMD in Wonosobo Regency. STIE Widya Wiwaha. http://stieww.ac.id
Wineh, S. (2021). Analysis of regional government capital participation policy on the performance of regional general companies in Telago Shower Drinking Water Bungo Regency. Journal Economics, 21(1), 19–25.