Financial Analysis of Qantas Airlines

Running Head: FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
Name of the Student
Name of the University
Author Note

1FINANCIAL ANALYSIS
Table of Contents
Introduction................................................................................................................................2
Answer to Question1..............................................................................................................2
Answer to Question 2.............................................................................................................5
Answer to Question 3.............................................................................................................6
Answer to Question 4.............................................................................................................7
Answer to Question 5.............................................................................................................7
Conclusion..................................................................................................................................8
Reference....................................................................................................................................9

2FINANCIAL ANALYSIS
Introduction
The aim of this assignment is to do the financial analysis of the Qantas Airlines. It is
one of the third oldest airline the world. The Australia based airline is largest by the size of
fleet, international destinations and international flights. This airline is referred as low cost
airline, which are most recognized and longest established airlines around the world (Qantas
Investors | Investor Centre., 2019). Hence, under this assignment discussion will be done on
the analysis of the financial ratios of the company by referring it to operating, Investment,
Financing and dividend policy management. In addition, discussion will be based on cash
flow analysis of the company by evaluating their operating, investing and financing activities.
Moreover, discussion will also be based on the evaluation of the overall financial position
and financial performance of the company. Further, discussion will be done on
recommendations to the executive of the company. Hence, lastly, analysis has to be done that
whether the financial policy of the company supports the strategy of the company or not
(Qantas Investors | Investor Centre., 2019).
Answer to Question1
In order to analyze the operating, investing, financing and dividend management of
the company, following ratios are calculated:
Return on Assets is calculated to know whether the company is profitable i terms of
utilizing its assets. It evaluated is the efficiency of the management of the company for
generating the revenue from their assets or resources available. Hence, the ROA of Qantas
airways shows that company is able is not able to generate enough returns on assets as
compare to industry, which has 4.47% ROA (Lopes, Ferraz & Rodrigues, 2016).

3FINANCIAL ANALYSIS
Return on Assets (Profit / Average total assets) 980 853
27257.5 27257.5
3.60% 3.13%
Return on equity of the company is calculated for measuring the financial
performance of the company. It helps in measuring the rate of return, which is received by the
shareholders on their shareholdings. The ROE of the company shows that shareholders of the
company are getting good rate of return on their shareholdings as compare to the industry,
which has low ROE of 10.64 % (Perrott, 2015).
Return on Equity (Profit / Average equity) 980 853
5729 3540
17.11% 24.10%
Earnings per share of the company are that portion of the profit of the company is
distributed among the each shares of the common stock. It shows the profitability of the
company. The EPS of the company has increased over the years from $46m to $56m. It
shows immense growth (Whyte & Lohmann, 2015).
Earnings per share Profit for shareholders / Number of ordinary shares 56 46
EPS taken from annual report
The current ratio of the company measures the liquidity as well as efficiency of the
company in paying short-term liabilities. The liquidity position of the company is almost
same over the year 2018 and 2017 that is 0.49 and 0.44 as compare to the liquidity position of
the industry whose liquidly position is 1.19 which is better than this airway (Teker, Teker &
Güner, 2016).
Current Ratio Total current assets / Total current liabilities 3712 3119
7596 7095
0.49 0.44