Abstract :
This study aims to find out how the application of internal failure cost and
external failure cost can improve the financial performance of the company (ROI). The
object of the research are the manufacture companies which is listed on Indonesian Stock
Exchange (BEI) with observation period of 2012 until 2016. The data on this study based
on annual financial statements obtained through the site www.idx.co.id. The Data
Technique Collection used the documentation technique, it was collecting secondary data
of manufacturing companies listed on the Indonesia Stock Exchange. The result show that
the application of internal failure costs and external failure costs can improve the
company?s financial performance (ROI).