Air Asia Financial Analysis

This report is a financial analysis of Qantas Airways Australian covering the last two complete financial years 2015 to 2016. The analysis will be conducted using a series of financial ratios drawn from the main categories of liquidity, profitability, and capital structure and market performance. The report will highlight what the ratios indicate in the context of the company’s operations. The report will endeavour to provide an overall assessment of the company’s performance for the most recent period and discussion about which aspect of the company’s financials has demonstrated the most improvement. The report recommendations will be supported by comparisons

Financial Management is an important aspect of how a business operates efficiently. The way that the finances are controlled can determine how successful the company is. The finances of a business allows for the growth of the company. The five practices of financial management: capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment are critical when assessing a company. The performance of a company plays a key role on how successful the company is on meeting goals. There are different strategies and tools that a company can implement and if they are used to effectively the company can meet their goals. If a company has good finances, a good

The analysis of financial statements is based on the use of ratios or relative values. Financial statements are used to evaluate the condition of a firm and its financial performance. The measurement and evaluation of information presented in the financial statement is known as analysis and interpretation of financial statement, of which is the relationship between financial statements and decision making process.

The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future

This data set is divided into three categories, this paper compares only three ratios for each category; Solvency Ratios: Quick Ratio, Current Ratio, and Current Liabilities to Inventory Ratio; Efficiency Ratios: Collection Period Ratio, Assets to Sales Ratio, and Accounts Payable to Sales Ratio; Profitability Ratios: Return on Sales Ratio, Return on Assets, and Return on Net Worth.

According to Gitman, the goal of the firm, and therefore of all managers and employees, is to maximize the wealth of the owners for whom it is being operated (2009). The financial manager is responsible for acquiring sources of financing and allocate amongst competitive investment alternatives. The ultimate goal is to invest in projects yielding higher returns than amount of financing used to invest, so profits can be used satisfy claims and increase shareholder wealth. The issues facing financial managers are therefore to 1) increase sources of financing from investors and 2) increase shareholder wealth while maintaining a

The Inventory Turnover Period has improved for ASOS, in 2014 it only took the company 120 days to sell inventory where in 2013 it was taking them 141 days. This proves that the amount of time inventory is held for before it is sold has decreased. However, the Trade Receivables Settlement Period has increased by 1 day. Meaning, it may be taking longer for receivables to be settling their debt with ASOS. Until the debt is settled it is seen as a loss for the company. The Trade Payables Settlement Period has reduced by 3 days to 20 days and this ratio measures just how long the company will take to pay its debts (to its suppliers). Therefore, this means that the Working Capital Cycle has also been reduced by 17, which is an improvement as the

These ratios are used to measure companies’ operating cycle.() Firstly in 2012, the receivables turnover for Oroton and Country Road are 54.86 times per year and 93.02 times per year. This indicates that Country road can collect cash from their customer faster than Oroton. Secondly, the payables turnover for Oroton and Country Road are 12.15 and 8.44 times per years. And it would be easier to analyze day payables which Oroton’s is 30 days and Country road’s is 43 days. This ratio shows that Country road has longer credit term to pay their suppliers than Oroton. Finally, the inventories turnover for Oroton and Country Road are 54.86 and 93.02 times per year. It is obvious that Oroton takes longer time to sell all of their inventories than country road. All of these ratios indicate that Country road has shorter operating cycle than Oroton. Therefore, they tend to have higher performance in terms of liquidity because they can generate cash faster.

The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance

When analyzing current ratio and quick ratio we can say that the company’s liquidity is efficient enough to pay off its currents debts, since the trend for the period stayed fluctuating around the same percentages. Meanwhile, accounts receivable followed a negative trend, meaning that the company’s days of accounts receivable increased showing that they are having a hard time collecting receivables in a timely manner. In addition, inventory and accounts payable turnover increased over the first three years, showing in one hand the inefficiency of the company at selling inventory and on the other hand that they are making payments faster to the supplier which is a sign of their improving financial conditions. The last item under liquidity ratio is cash conversion cycle, showing a deteriorating trend, which confirms the effectiveness of a company’s management converting cash on hand into inventory to sales and sales back into

Importance: this gives us a picture of a firm that how perfectly they are using the money from shareholders to bring profits and grow the company.

American Airlines has went through bankruptcy and a merger, and they are still flying. Many people would identify American Airlines (AAL) as once being “great.” Today, it is not seen as highly as it once was, but the CEO, Doug Parker, believes the company will, in fact, be great again. He is quoted in multiple articles stating the company is working hard to make AAL “the greatest airline in the world.”

Stakeholders include but are not limited to employees, investors, and lenders. Therefore, to have a well-informed and well-rounded opinion, it helps to have accurate and up to date financial statements and ratio distribution of the company’s revenue. With the statements, it not only shows the current position of the company but gives insight to determine the best decisions in the running of the company. In regards to lenders, financial statements are the antithesis of the lending criteria used to calculate any monies the company may or may not receive. This calculation is important in estimating the average amount of money that they can lend the organization, and the amount can be paid after a certain period taking into account the rate of interests (Cummings & Worley, 2009).

The strong competitive advantages which low – cost airline such as Air Asia is equally causing Mas to restructure their operations, there resource such as airplane and the quality of their cabin crew tends to be looked at deeply. Mas has the oldest airline in Malaysia they have to use the advantages to continue to stay at the frontline in the aviation industry by them using available resources effectively with the help of the government and come up with a strong strategy so as to compete and stabilize its product in the aviation industry.

Malaysia Airlines (abbreviated MAS), is the government-owned flag carrier of Malaysia. Due to fuel price hiking, inefficient management, global economic crisis, government intervention and low load factor, MAS suffers substantial loss which