THE ANALYSIS OF DIFFERENCES BETWEEN HEDGING AND NON HEDGING TO ACCOUNT RECEIVABLE (A CASE STUDY OF PT. INDAH PONTJAN)

Abstract

PT Indah Pontjan is an agriculture company which has been producing CPO and exports the products to Malaysia and Singapore. Because of the export transaction, the company needs to do the foreign exchange to fulfill the operational expense. Nowadays, the condition of currency is always fluctuated and cannot be predicted. In order to prevent the loss of currency fluctuation, PT Indah Pontjan needs to do hedging. The research objective is to identify and evaluate the differences of hedging and non - hedging to account receivable of PT Indah Pontjan which uses the currency of US Dollar (USD) and Indonesia Rupiah (IDR). In this research, the data being used is secondary which comes from the illustration of export data in PT Indah Pontjan from the year of 2005 to 2010, the deposit rate for USD and IDR, the credit rate which comes from Bank Indonesia. The research will be using quantitative analysis which uses paired sample t –test as the research technique. The research instrument is calculated by SPSS 17 and Microsoft Excel. The hedging technique being evaluated in this research is Forward Contract Hedging, Money Market Hedging and Option Contract Hedging. Each of the technique will be compared to Non Hedging technique by using the data analysis statistically. The result will also be compared toward some economical conditions like crisis in the year of 2007 and 2008. It is to examine whether there is difference between hedging and non hedging technique during the crisis of 2007 and 2008 and without the crisis of 2007 and 2008. The result of the research is during the crisis in the year of 2007 and 2008, it is suggested for the company not to do hedging; however in other condition of without crisis in 2007 and 2008, it is suggested for the company to use forward contract hedging.