72 CHAPTER 5 CONCLUSION AND RECOMMENDATION 5.1 Conclusion To answer the research question on how company health and company valuation PT Prakarsa Enviro Indonesia is several approached is used. Starting from Company and Industry Analysis using external and internal analysis, then analyze financial health of company using profitability, debt, and liquidity ratio. Finally calculate company valuation using net asset value and discounted free cash flow to firm. Below are the conclusions: 1. In the external analysis of PT Prakarsa Enviro Indonesia, various factors ranging from political to legal aspects play a pivotal role. Global alignment with Sustainable Development Goals, post-Covid-19 economic recovery prospects, heightened environmental awareness, and stringent legal frameworks shape the company's operational landscape. 2. In the external analysis, when assessed using the VRIO framework, PT Prakarsa Enviro Indonesia exhibits a mix of resources and capabilities. While aspects like product diversification, reliable networks, and brand reputation grant the company a sustained competitive advantage, other resources such as regional reach suggest the need for strategic realignment to leverage full potential. 3. On company financial health using financial report from 2016 until 2023 certain inconsistencies and potential areas of concern are highlighted. In liquidity metrics, the company shows mixed results. Despite some positive aspects, concerns arise from its notably low quick and cash ratios, indicating a potential need for increased capital to strengthen its short-term financial standing. 4. On Debt Ratio, the financial structure reveals a conservative approach with a low long-term debt ratio, but there's an increasing dependence on external debt, as highlighted by the rising debt-to-equity and overall debt ratios over recent years. 5. The profitability ratios display inconsistency, with marked fluctuations in gross profit margins, a concerning dip in the operating profit margin in 2021, and 73 narrow net profit margins. This pattern suggests challenges in managing costs and achieving operational efficiency. 6. PT Prakarsa Envirowater's valuation has been determined through two methods: The Discounted Free Cash Flow to Firm approach resulted in a valuation of Rp41,763,094,851. Using the average Net Asset Value (NAV) from 2017 to 2021, the valuation stands at Rp18,391,590,726 7. Based on the 2021 financial report, PT Prakarsa Enviro Indonesia has 6,250,000 total shares. Using the DFCFF method for valuation, the calculated share price is Rp4,052 per share. 5.2 Recommendation Based on the comprehensive analysis encompassing external and internal factors, financial health, and company valuation, the following recommendations are made for PT Prakarsa Enviro Indonesia: 1. Strengthen Financial Liquidity: Given the low quick and cash ratios which are under 0.5 in the last three years, the company should prioritize enhancing its liquidity position by improve the ratio above 0.5. This can be achieved if the company can generate more cash and account receivable by optimizing its working capital, negotiating payment terms with suppliers, or exploring additional short-term financing options. 2. Manage Debt Proactively: Lowering the Debt to Equity (DER) ratio to under 0.9, as the average DER for wastewater management industry is 0.9. This can be achieved by decrease the total liabilities growth for -50% and increase the equity growth for 50%. 3. Operational Efficiency: The fluctuations in profitability ratios, especially the dip in the operating profit margin in 2021, call for a thorough review of operations. The company should cut the expense at least 20% to have positive operating margin and net profit margin in the future. This can be achieved by do efficiency measures, cost-cutting initiatives, and lean management practices. 4. Harness External Opportunities: Considering the external analysis, the company should exploit the growing market size opportunity for around 30% for the next 5 74 years that will reflect to share price increment around 120% to Rp8.841. This can be achieved by collaborating on governmental projects, diversifying its service offerings, or expanding into newer regions. 5. Capitalize on Internal Strengths: The VRIO analysis reveals specific competitive advantages, especially in product synergy and brand reputation. Enhancing and promoting these strengths can solidify the company's position in the market and provide a differentiation point. By adopting these recommendations, PT Prakarsa Enviro Indonesia can effectively navigate the challenges, capitalize on the opportunities, and drive sustained growth in the long term..