logo

Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia

17 Pages4263 Words214 Views
   

Added on  2021-06-16

About This Document

2 BUSINESS FINANCE Contents Introduction 3 Ratio analysis 4 Short-term solvency ratios 4 Long term liquidity ratios 6 Profitability ratios 8 Asset utilization ratio 9 Market value ratios 11 Ratio comparison between Qantas limited and Virgin Australia 12 Conclusion 13 Recommendation 14 References 16 Introduction In this report analysis of financial statements of two companies has been done i.e. In this report, five parameters have been used to analyse financial performance and they are; short-term solvency, long term solvency, asset utilization, profitability ratios and market

Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia

   Added on 2021-06-16

ShareRelated Documents
1BUSINESS FINANCE
Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia_1
2ContentsIntroduction......................................................................................................................................3Ratio analysis...................................................................................................................................4Short-term solvency ratios...........................................................................................................4Long term liquidity ratios............................................................................................................6Profitability ratios........................................................................................................................8Asset utilization ratio...................................................................................................................9Market value ratios....................................................................................................................11Ratio comparison between Qantas limited and Virgin Australia..................................................12Conclusion.....................................................................................................................................13Recommendation...........................................................................................................................14References......................................................................................................................................16
Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia_2
3IntroductionIn this report analysis of financial statements of two companies has been done i.e. of QantasLimited and Virgin Airlines Limited. Both Qantas Limited and Virgin Airlines Limited has beenoperating under same industry i.e. airlines and having same industry standards. As an investmentmanager, the main objective of this report is to provide advice to prospective investors in termsof investment decision making. Advice to prospective investors is based on the differentparameters and each is related to select two companies. In this report, five parameters have beenused to analyse financial performance and they are; short-term solvency, long term solvency,asset utilization, profitability ratios and market value ratios. In this report, ratio analysistechnique has been used for the analysis for the year ended 2016 and 2017. In this report, 11different types of ratios have been used for the analysis and on the basis of such ratiosrecommendations has been provided in terms of most favourable business organization for theinvestment.
Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia_3
4Ratio analysisQantas Limited is one of the three oldest airline companies in the world. It is considered to belargest airline company in the world in terms of fleet size, international destinations andinternational flights. It is established flight carrier founded in 1920 in Australia. Short-term solvency ratiosThese are the ratios that represent the solvency of the company in a set of 12 months which is aparticular accounting year. It helps in evaluating if the company can pay off its current liabilitiesthat are due within next 12 months with the amount to be realized from current assets in 12months (Gibson, 2011).RatioFormulaQantas LimitedVirgin Australia2017201620172016Current ratio Current assets/ current liabilities 0.44times0.49times0.76 times0.61timesQuick ratioQuick assets/ current liabilities 0.39times0.44times0.74times0.60times(Qantas Limited, 2017)Current ratio- it is the ratios that taken into consideration entire current assets while estimatingthe amount available for payment of current liabilities. Current ratio analyses the liquidityposition of the business organization by comparing available current assets with currentobligations at the end of the year (Brigham & Ehrhardt, 2013). Current assets of the company have decreased from .49 to .44 in the year 2017 as compared to2016. In both fiscal years, the current ratio of the company is very low as the company doesn’teven have the current assets to pay half the current liabilities. Hence it can be said that short-term
Analysis of financial statements of two companies i.e. of Qantas Limited and Virgin Australia_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Hospitality Finance And Revenue (pdf)
|15
|3343
|18

Financial Performance Analysis of Qantas Airways
|20
|4490
|470

Financial Analysis of Qantas Airlines
|15
|3966
|431

Hotel Finance and Revenue Analysis: A Study of Qantas and Virgin Australia
|14
|3703
|91

FINANCIAL CASE STUDY.
|24
|4920
|133

Financial Analysis of Qantas Airways Limited and Virgin Australia Limited
|15
|3713
|462