Ratio vs. Eva : A Performance Analysis in Indonesian Publicly-Listed Banks

In this era of tight competition among companies in running their business, companies' performance required to be assessed, observed, and evaluated to gain information about what needs to be done in order to develop further. As one of the most crucial business segment in the economy, banks and their performances are considered to be taken into further study. This study attempts to classify how good the banks sampled performance according to Bank Indonesia's standard of bank's healthiness. Then, by measuring its performance through ratio analysis in the form of return on assets (ROA), net interest margin (NIM), capital adequacy ratio (CAR), non-performing loan (NPL), loan-to-deposit ratio (LDR), and a market measure in form of economic value added (EVA), this study expects to observe the influences of those measurements toward banks' performances in terms of total assets, total debts, and interest expense. This research uses historical data on financial reports of the banks issued by Bank Indonesia that compiled over a period of 8 years (2002-2010). The sampled banks are publicly-listed in Indonesia and represent the 10 largest banks in terms of assets size, as per the 2010 Indonesia Banking Directory. A statistical analysis of the data using PLS is conducted to test and establish a comprehensive interpretation as well as predictions on the research model. It is expected that EVA influences banks performance more than ratio analysis