Business Analysis: Financial Position, KPIs, and Performance

Business Analysis

Table of Contents
INTRODUCTION......................................................................................................................2
Analysis of financial position.................................................................................................2
Critically review the key performance indicator in its operations.........................................5
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................9

INTRODUCTION
Business analysis is an approach that is used to introduce or manage the change
within a firm in order to increase the performance of a company in better manner. In the same
way, current study will also shed a light upon the business performance by using financial
data. The study is based upon the case study of EasyJet which is deal in airline industry and
operate within many countries. Hence, the study will examine the financial position of a
company by using the annual reports through different ratios. Further the study will critically
review the internal performance by using the key performance indicator of a company which
clearly determine whether the company is able to perform better in future or not.
Analysis of financial position
Profitability ratio
Particular Formula 2019
Gross profit GP/ Net sales* 100 16.44479248
GP 1050
Net sales 6385
Net profit NP/ Net sales* 100 5.465935787
NP 349
Net sales 6385
This is the ratio which assist the company in analysing the profitability condition of the
company. With the help of the gross profit ratio it was found that GP ratio of the company
was 16.44 which are moderate for the company. This position of the company reflects that
the company is earning the gross profit at the rate of 16.44 %. On the other side the net profit
ratio of the company is 5.46 which is very low (Easyjet annual reports, 2019). This is not
good for the company as the profitability of the company is low and the company easyJet
need to improve its position to a great extent. The major reason for this is that the low net
profit reflects that the company is having more of the indirect expenses as compared to the
direct expenses. This in turn suggest that the company is having more of gross profit and less
of the net profit and the only difference is of the level of direct and indirect expenses. Thus,
in order to improve the financial position and the profitability of the company, it is essential
for the company to try to limit the indirect expenses (Easton and et.al., 2018). On the other
side it is the responsibility of the company to try to increase the sales of the company and for