Auditing Assignment: Cathay Pacific & COLI

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CATHAY PACIFIC & COLI, Hong Kong
AUDITING ASSIGNMENT

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Contents
Background of the report........................................................................................... 2
Introduction................................................................................................................ 2
Discussion and analysis.............................................................................................. 2
Conclusion.................................................................................................................. 7
References................................................................................................................. 8
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Background of the report
The report has been prepared on the 2 listed companies in Hong Kong namely Cathay Pacific
and China Overseas Land and Investment Limited (Coli). Both the companies have been
analysed w.r.t. to audit and the financial statements for the year 2017. The nature and the core
business of the company has been explained in brief and then the financial statements of both the
companies has been compared with the respective industries in which they are working for
performance evaluation. The differences in presentation of financial statements has also been
highlighted.
Introduction
China Overseas Land and Investment Limited (Coli) is one of the subsidiaries of China State
Construction Engineering Corporation Limited which was incorporated in Hong Kong in the
year 1979 and is engaged in the construction and contracting, property and infrastructure
development sector with most of the operations in China and Hong Kong (Belton, 2017). The
company is listed on the Hong Kong Stock Exchange. The company’s main business line is thus
real estate which includes property development, property investment, infrastructure and other
operations including property management, logistic operations, consultancy services etc.
On the other hand, Cathay Pacific Airways Limited also known as Cathay Pacific is the flag
carrier of Hong Kong. The company has a history of 72 years and employs over 32000
employees. The company’s main operations include airline services catering over 190
destinations in 60 different countries. It has a wide variety of fleet consisting of Airbus A330,
Airbus A350 and Boeing 777 equipment with the total fleet size of 153 (Alexander, 2016). The
company is 10th largest airline in the world in terms of sales and ranked 14th in terms of market
capitalization. In the year 2010, it became world’s largest international cargo airline with Hong
Kong airport being the world’s busiest airport in terms of cargo handling (Jefferson, 2017).
Discussion and analysis
The financial performance of both the companies has been analysed through ratio analysis.
1. Liquidity Ratios
Current Ratio = Total current assets/ Total current liabilities 2017 2016
Total current assets 501,790,506 474,913,305
Total current liabilities 206,542,566 199,604,474
Result 2.43 2.38
Liquid ratio /Quick Ratio = (Total current assets - Inventory - Prepaid
expenses)/ Total current liabilities 2017 2016
Total current assets - Inventory - Prepaid expenses 128,128,505 187,689,120
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