Airlines Financial Analysis Report

Added on - 22 Jul 2020

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AIRLINES FINANCIALANALYSIS REPORT
Table of ContentsINTRODUCTION...........................................................................................................................1A) ANNUAL REPORTS OF VIRGIN AUSTRALIA....................................................................1B) FINANCIAL PERFORMANCE ANALYSIS OF VIRGIN AUSTRALIA AIRLINES............6C) RECOMMENDATIONS TO IMPROVE FINANCIAL PERFORMANCE............................7CONCLUSION................................................................................................................................8REFERENCE...................................................................................................................................9
Index of TablesTable 1: Profitability ratio analysis for Virgin Australia.................................................................1Table 2: Liquidity ratio analysis for Virgin Australia....................................................................4
INTRODUCTIONFinancial statements of any organisation analysed that shows economic position thatgenerates different ideas for improving them. It is essential for organisation's effectiveness andimproving its services. The present report is based on analysing financial position of VirginAirlines. It is growing wide spread airline service provider headquartered is in California. In thisregard, annual data of the entity is to be described through ratio analysis of last 5 years from2012 to 2016 to analyse its economic position. However, critical evaluation on monetary positionof Airlines can be evaluated that generates different ideas for further implementations. Inaddition to this, suggestions to improve financial position is to be presented. Thus, students areable to understand concept of financial statement analysis for Airlines industry and manner toimproving economic position of the entity through this report.A) ANNUAL REPORTS OF VIRGIN AUSTRALIAAnnual report of the entity shows its profit earning capacity and liquidity position forfurther operations and implementations at higher level. In this regard, decision maker of theAirlines evaluates ratios to present monetary position as profitability, liquidity, efficiency, capitalgearing ratio and so on (Lee and et.al., 2017). However, different ratios can be analysed asbelow:Profitability ratio:Profit earning capacity of Virgin Australia is evaluated by grossprofit margin, net profit margin, return on assets. However, monetary position of entitycan be analysed as different ideas are generated for improving it (Thompson and Craven,2017). In this regard, profitability for Airlines can be evaluated as below:Table1: Profitability ratio analysis for Virgin AustraliaProfitability ratioFormula20122013201420152016Revenue39204020430747495021Gross profit14081209118623232948Gross profit margin(Grossprofit/revenue)*10035.9230.0727.5448.9258.71Operating income4127401354228761Operating profitmargin(Operating income/sales)*1000.110.180.310.050.151
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