GROWTH ANALYSIS ROE AND ROI IN ASSESSING THE FINANCIAL PERFORMANCE OF REGIONAL DRINKING WATER COMPANIES IN THE CITY OF MADIUN

Abstract

This research analyzes the growth of return on equity (ROE) and returns on investment (ROI) to assess the financial performance of the Madiun City Regional Drinking Water Company (PDAM). ROE is calculated as net profit divided by equity, while ROI is calculated as net profit divided by total investment. Secondary data was obtained from the annual financial report of PDAM in Madiun for the 2018-2020 period. The analysis method used is descriptive and trending to identify ROE and ROI growth patterns. The research results show fluctuations in ROE and ROI, with some years experiencing significant increases reflecting improved financial performance, while other years show declines due to challenges in maintaining financial stability. The increase in performance was mainly driven by operational efficiency and good resource management, while the decrease was caused by an increase in operational costs and a decrease in revenue due to external factors. This research highlights the importance of a stable and sustainable management strategy for PDAM in Madiun city as well as efficient resource management and investment optimization to ensure consistent financial growth. These findings provide insight for PDAM management in monitoring and evaluating financial performance using ROE and ROI, as well as helping policymakers formulate policies that support improving the company's financial performance