Finance: Recent Developments in International Financial Market Impacting Easy Jet Performance and Development
Added on 2023-06-18
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FINANCE
Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................3
Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................3
Recent developments in the international financial market which is impacting Easy jet
performance and development.....................................................................................................3
Elements of MNE international financial and risk management strategy...................................4
Analysis of financial performance...............................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
INTRODUCTION
Finance is the wide concept. It can be said that every company revolve around this
concept. Good financial position of the company is helpful in increasing their reputation in the
market. Financial position of the company can be find out by reviewing their financial statements
which are income statements, profit and loss account, balance sheet etc. investors and financial
institutions are interested in financial statements of company because before investing investors
will see that company is making profit or loss (Akan and Tevfik, 2020). In loss making company
no investor will invest. Easy jet is the airline company. Company is famous for its cheap tickets
as compare to its rival company easy jet is providing tickets in less price. This report will discuss
latest developments in global financial environment which influence perform of company.
performance and development.....................................................................................................3
Elements of MNE international financial and risk management strategy...................................4
Analysis of financial performance...............................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
INTRODUCTION
Finance is the wide concept. It can be said that every company revolve around this
concept. Good financial position of the company is helpful in increasing their reputation in the
market. Financial position of the company can be find out by reviewing their financial statements
which are income statements, profit and loss account, balance sheet etc. investors and financial
institutions are interested in financial statements of company because before investing investors
will see that company is making profit or loss (Akan and Tevfik, 2020). In loss making company
no investor will invest. Easy jet is the airline company. Company is famous for its cheap tickets
as compare to its rival company easy jet is providing tickets in less price. This report will discuss
latest developments in global financial environment which influence perform of company.
Further will discuss risk management strategy and accounting ratios so that financial
performance of company can be analysed.
MAIN BODY
Recent developments in the international financial market which is impacting Easy jet
performance and development.
International financial environment:
It denotes the condition which is their in the economy and financial market worldwide.
There are many factors which can influence them like government corporations, credit
worthiness and investors who are present in different countries and purchasing other nations debt
by giving them profit opportunities. Effective international financial environment is said to be
one where economic growth and investment is happening. Growing economy will show high
infrastructure development and also more jobs are available.
Two recent development are:
Foreign exchange markets:
This market which is also called as currencies market is the over the counter market
which decides the currencies Exchange rate in the worldwide. Investors in these market can sell,
exchange, buy or speculate on the exchange rates of different currencies (Meech and Bayliss,
2021). Foreign exchange market includes companies, banks, investment management firms,
retail forex dealers and other investors etc. if the exchange rate Of currency is high in those
countries in which easy jet is operating then company can chance to make more profits. It is
considered as one of the largest financial market globally so more investors will trade in this
market and that will definitely increases the performance of company in the future ( Akan and
Tevfik, 2020). As here the trading of currency is done in pairs. So in the pair currency value of
one will relate to currency value of other. As per the bank of international settlements the trading
which is done in the foreign exchange markets is calculated at $ 6.6 trillion per day on April
2019. it is also helpful in increasing the liquidity in the various financial markets. This will
contribute in the stability of Easy jet. Stability will also help the company to receive growth in
the future. It is observed that US dollar is observed as appreciating when compared with different
currencies so the US investors often liquidate their positions in the global equity market and
performance of company can be analysed.
MAIN BODY
Recent developments in the international financial market which is impacting Easy jet
performance and development.
International financial environment:
It denotes the condition which is their in the economy and financial market worldwide.
There are many factors which can influence them like government corporations, credit
worthiness and investors who are present in different countries and purchasing other nations debt
by giving them profit opportunities. Effective international financial environment is said to be
one where economic growth and investment is happening. Growing economy will show high
infrastructure development and also more jobs are available.
Two recent development are:
Foreign exchange markets:
This market which is also called as currencies market is the over the counter market
which decides the currencies Exchange rate in the worldwide. Investors in these market can sell,
exchange, buy or speculate on the exchange rates of different currencies (Meech and Bayliss,
2021). Foreign exchange market includes companies, banks, investment management firms,
retail forex dealers and other investors etc. if the exchange rate Of currency is high in those
countries in which easy jet is operating then company can chance to make more profits. It is
considered as one of the largest financial market globally so more investors will trade in this
market and that will definitely increases the performance of company in the future ( Akan and
Tevfik, 2020). As here the trading of currency is done in pairs. So in the pair currency value of
one will relate to currency value of other. As per the bank of international settlements the trading
which is done in the foreign exchange markets is calculated at $ 6.6 trillion per day on April
2019. it is also helpful in increasing the liquidity in the various financial markets. This will
contribute in the stability of Easy jet. Stability will also help the company to receive growth in
the future. It is observed that US dollar is observed as appreciating when compared with different
currencies so the US investors often liquidate their positions in the global equity market and
taking all money back to the country. Easy jet airline is affected by covid 19. Due to covid 19
company has face major loss because of lockdown no one has travelled. At covid crisis company
is even not able to survive at break even point.
Derivative market:
Derivative can be called as the financial asset whose value is derived from underlying asset.
Derivative can called as the contract which is done between two or more parties. Prices of
derivative are not fix and it changes with the changing in underlying asset. Underlying assets are
market indexes, currencies, stocks, commodities etc. derivative are said to as leveraged
instruments which enhances risks and rewards for the company (Edjossan-Sossou and et.al.,
2020). It contributes in increasing financial market efficiency. If the financial market is efficient
then it will definitely contribute in improving Easy jet performance and development. As it will
become easy for company to take loans from financial institution at low interest rate. When
company gets funds than that will definitely help them in doing future growth. Easy jet can
invest in various stocks or can purchase equipments can can help company in bringing
innovation in the market.
Derivative also helps company in getting access to those assets which is not available. Through
interest rate swaps, organization can get favourable interest rate as compare to those interest rate
which are easily available through direct borrowing. As value of derivative is connected with
underlying asset value then through these contracts risks can be hedged. Derivatives which is the
financial instrument is the recent financial instrument. It can help Easy jet to bring development
in the company. It is observed that this instrument has growth in future also. So this will
definitely contribute in the growth of company as well. Brexit has also affected Easy jet because
from EU cheap worker company is getting but after Brexit, on free movement of workers
government has put restrictions.
Elements of MNE international financial and risk management strategy
Risk appetite:
Risk appetite is the rate of risk which an organisation can take to get more returns. Risk appetite
statement consists of business plans, strategy and capital risk (Outlook, I.R.E., 2017). It also
shows risk management of the company which is impacted by style and culture of the company.
While designing risk appetite it is important that Easy jet should consider risk capacity,
behaviour towards risk, risk profile etc. taking risk is very important because it will only help
company has face major loss because of lockdown no one has travelled. At covid crisis company
is even not able to survive at break even point.
Derivative market:
Derivative can be called as the financial asset whose value is derived from underlying asset.
Derivative can called as the contract which is done between two or more parties. Prices of
derivative are not fix and it changes with the changing in underlying asset. Underlying assets are
market indexes, currencies, stocks, commodities etc. derivative are said to as leveraged
instruments which enhances risks and rewards for the company (Edjossan-Sossou and et.al.,
2020). It contributes in increasing financial market efficiency. If the financial market is efficient
then it will definitely contribute in improving Easy jet performance and development. As it will
become easy for company to take loans from financial institution at low interest rate. When
company gets funds than that will definitely help them in doing future growth. Easy jet can
invest in various stocks or can purchase equipments can can help company in bringing
innovation in the market.
Derivative also helps company in getting access to those assets which is not available. Through
interest rate swaps, organization can get favourable interest rate as compare to those interest rate
which are easily available through direct borrowing. As value of derivative is connected with
underlying asset value then through these contracts risks can be hedged. Derivatives which is the
financial instrument is the recent financial instrument. It can help Easy jet to bring development
in the company. It is observed that this instrument has growth in future also. So this will
definitely contribute in the growth of company as well. Brexit has also affected Easy jet because
from EU cheap worker company is getting but after Brexit, on free movement of workers
government has put restrictions.
Elements of MNE international financial and risk management strategy
Risk appetite:
Risk appetite is the rate of risk which an organisation can take to get more returns. Risk appetite
statement consists of business plans, strategy and capital risk (Outlook, I.R.E., 2017). It also
shows risk management of the company which is impacted by style and culture of the company.
While designing risk appetite it is important that Easy jet should consider risk capacity,
behaviour towards risk, risk profile etc. taking risk is very important because it will only help
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