Evaluation of Financial Performance, Budget Preparation and Investment Appraisal Techniques of Easy Jet Plc

ELEMENT
INDIVIDUAL
ASSIGNMENT

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.Evaluation of Financial Performance of Easy Jet Plc using ration analysis:................................3
Analysing various financial ratios along with their interpretation:........................................3
Problems and limitations of Financial Ratios:........................................................................7
2.Preparation of Budget of Easy Jet Plc:.........................................................................................8
Benefits and limitation of Drawing of budget for the next year:...........................................8
Explaining various approaches for drawing the financial plan:.............................................9
Critical evaluation of how performance management has been used to take better decisions:
................................................................................................................................................9
3.Investment Appraisal Techniques:..............................................................................................10
Evaluation of IRR and NPV techniques:..............................................................................10
Risk and uncertainty in investment appraisal along with recommendation thereof:............13
Elaborating methods for financing the project:....................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
In each organization, there may be a want to gather the finances to function the features
easily and effectively. Finance is taken into consideration the lifeblood of the enterprise which
facilitates in coping with the operations. This record carries the assessment of EasyJet plc, that is
a British multinational low-price airline group. It is situated at London Luton airport. The
technique used for the assessment of economic overall performance is ratios which assist in
evaluating the overall performance with different competition too. There are numerous obstacles
and disadvantages of ratios that are additionally discussed. There are extraordinary methods
utilized in drawing the budgets and explaining the significance of overall performance control in
taking numerous decisions. The strategies of funding appraisal along with internet gift price and
inner fee of go back assist in assessing extraordinary projects. There are numerous dangers and
uncertainty related to every approach and making tips at the same (Amagtome and Alnajjar,
2020).
MAIN BODY
1.Evaluation of Financial Performance of Easy Jet Plc using ration analysis:
Analysing various financial ratios along with their interpretation:
 Profitability Ratio:
It can be termed as the ability of the enterprise to generate profits over some time.
There are various ways to assess the profits of the enterprise such as income statement,
balance sheet, and shareholder’s equity. There are various types of profitability ratios
such as gross profit margin, operating profit margin, net profit margin, return on equity,
return on assets and return on capital employed (Cao, Abakari, and Xia, 2020). The
description of the interest coverage ratio of EasyJet plc for five consecutive years is as
follows:
Financial ratios of Easy Jet plc.
Year 2017 2018 2019 2020 2021
Interest coverage
ratio
14.28
Times
15.83
Times
8.17
Times
-15.97
Times
-7.79
Times