Efficiency and Effectiveness of Indonesian Listed Pharmaceutical Companies: A Financial Ratio and Management Perspective

Abstrak

Indonesia’s pharmaceutical industry faces structural challenges, including substantial dependence on imported raw materials and exposure to exchange rate fluctuations, requiring companies to strengthen both operational efficiency and financial effectiveness. This study aimed to analyze the financial performance of six pharmaceutical companies listed on the Indonesia Stock Exchange in fiscal year 2025 by integrating financial ratio analysis with an industrial pharmacy management perspective. A quantitative descriptive approach with a cross-sectional comparative design was employed using secondary data obtained from the companies’ audited 2025 annual reports. The analysis covered production cost efficiency, asset utilization effectiveness, productivity, research and development investment, human resource retention, solvency, and exchange rate exposure. The findings revealed substantial differences between production cost efficiency and asset utilization effectiveness. Darya-Varia Laboratoria (DVLA) and Phapros (PEHA) recorded the highest gross profit margins, at 54.34% and 52.35%, respectively. In contrast, Merck (MERK), Kalbe Farma (KLBF), and Tempo Scan Pacific (TSPC) demonstrated stronger asset utilization effectiveness, with return on assets of 19.17%, 12.20%, and 11.32%, respectively. Multidimensional ranking further revealed that DVLA and PEHA, despite their strong production cost efficiency, ranked fourth and sixth overall. PEHA represented the clearest divergence, achieving the second-highest gross profit margin but the weakest performance across other rankable categories, alongside a debt-to-equity ratio of 224.51%. Capital structure emerged as an important factor associated with overall performance, although the descriptive research design does not establish causality. The study also identified inconsistencies in non-financial disclosures, particularly regarding research and development expenditure, production capacity utilization, and exchange rate sensitivity, which limited cross-company comparability. These findings demonstrate that pharmaceutical financial performance cannot be adequately assessed using a single financial indicator. A multidimensional evaluation that distinguishes production cost efficiency from asset utilization effectiveness, while considering operational and financing conditions, provides a more comprehensive basis for managerial decision-making. However, the findings apply only to the six profitable companies examined and cannot be generalized to the entire sector.