Financial Analysis of Air India

4389 Words Apr 25th, 2012 18 Pages
A REPORT ON FINANCIAL ANALYSIS OF AIR INDIA

COURSE: MBA in Logistics and Supply Chain Management
SUBJECT: Financial Analysis for Managers
ID No: EAC0911598
12/28/2011
Christy Christopher Devassy

TABLE OF CONTENT 01 I. Executive Summary……………………………………… 02 II. Company Profile…………………………………………… 03 III. Financial Ratio’s……………………………………… ……04 a) Profitability Ratio……………………………………..04 b) Efficiency Ratio…………………………………………08 c) Liquidity Ratio………………………………………….06 d) Gearing Ratio………………………………………09

IV. Horizontal Analysis……………………………………….09 V. Vertical Analysis…………………………………………...10 VI. Comparison with Jet Airways………………………..11 VII. SWOT analysis……………………………………………….12 VIII.
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On March 2009 nonsensical union of two wings of airways had a loss, estimated rupees of 72,000 crores (72 billion)
FACTORS FOR FINANCIAL CRISIS: * Bad management and faulty strategies has brought Air India to this crisis level * Poor marketing and campaigning management, competitors like spice jet, kingfisher, jet do effective marketing * Employees strikes further taking it out of business and competitors taking advantages
Profitability Ratio on 31st March-2010, 2009, 2008, 2007

Analysis of management performance is a key tool for measuring the profitability of a company. Therefore, most of companies use this as tool to evaluate the income generated over the years. The key ratio calculated under this are return on shareholders’ equity, return on capital employed, net profit on sales and gross profit. The above analysis on management performance of Air India show a negative trend in the income generated for the period of four years. The following interpretation will give a brief overview and highlight the reason behind the negative trend in the income generated over the years.

Ratio | Definition in words | 2010 | 2009 | 2008 | 2007 | Gross Profit percentage | Gross profit X 100 Sales(turnover) | -8.57% | -23.03% | -17.89% | -3.97 % | Net profit on sales | Profit before interest and tax X 100Sales(Turnover) | -24.26% | -40.96% | -19.04% | -7.71 % | Return

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