Financial Analysis of Ryanair and EasyJet Plc

This document provides a financial analysis of Ryanair and EasyJet Plc, including profitability, liquidity, solvency, efficiency, and market prospects. It evaluates the companies' financial statements, compares their performance, and offers recommendations for improvement.

FINANCIAL ANALYSIS
MANAGEMENT AND ENTERPRISE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Conducting a financial analysis using the financial statements of Ryanair and EasyJet Plc ..1
2. Critically evaluating the corporate strategy undertaken by the concerned companies and
their future prospects ...............................................................................................................16
CONCLUSION..............................................................................................................................20
RECOMMENDATIONS...............................................................................................................20
REFERENCES..............................................................................................................................22
APPENDICES...............................................................................................................................24

INTRODUCTION
Financial analysis is reviewing the financial statements of the company wherein the
performance and well-being of the company is identified. Also, the comparative analysis is
conducted with competitors through ratio analysis which helps in knowing the inefficiencies and
taking the corrective actions by the respective company. The project shall be considering the past
three years’ data of two companies one is Easyjet and the other is the Ryanair. The annual
reports of the companies shall be extracted which shall be used in the ratio analysis of both the
airline companies. Further it shall reflect the comparative analysis based on the calculated ratios
of the financial statements. This shall highlight the inefficiencies that are pertaining to the
operations of the company and respectively the corrective actions shall be taken to improvise the
deviations that are caused to the business. Apart from this certain recommendation shall be
provided to the company based on their financial performance. Also, the prospective of the long
term investor shall be observed in respect of the company and shall be suggested with the most
attractive organization. Lastly the report shall be identifying the corporate strategy that is
followed by the business and the future growth prospects that the companies are planning to
undertake.
1. Conducting a financial analysis using the financial statements of Ryanair and EasyJet Plc
Profitability Ratios
Gross Profit Ratio: -
Year Easyjet Ryanair
2017 21.99% 35.40%
2018 24.38% 36.89%
2019 24.26% 28.64%
1

The gross profit ratio earned by Easyjet on the sales that are undertaken over the year is
24.26% as per the data of 2019. On the other hand, Ryanair has been able to capitalize 28.64% of
the revenue from operations as the amount of gross profit. The comparative analysis shows that
Ryanair has higher gross profit after reducing its cost of operations and this can be due to
maximized level of the operational efficiency (Nufus and et.al., 2020). Another important fact is
that the gross profit ratio is showing an increasing statistic as compared to the past year whereas
the Ryanair is decreasing over the years.
Net Profit Ratio: -
Year Easyjet Ryanair
2017 6.04% 19.79%
2018 6.07% 20.28%
2019 5.47% 11.50%
2

The comparative analysis of the data of both the companies show that Easyjet has
generated net profit up-to 5.47% and on the contrary Ryanair has earned 11.50% net profit on the
sales in the recent year of 2019. This shows that Ryanair is more profitable in conducting its
business operations or has established control over its expenses in the business. This shall also
leave greater funds with the company to extend it in the form of dividend to its shareholders.
Also, the comparative assessment shows that both the companies have been facing challenges in
managing the expenses, as over time the company's net profit ratio has significantly dropped.
Operating Profit Ratio: -
Year Easyjet Ryanair
2017 8.36% 23.08%
2018 9.90% 23.32%
2019 7.30% 13.21%
3

The operating profit ratio of Ryanair has significantly dropped in 2019 as compared to
2017 data which is from 23.08% to 13.21%. It is a steep drop down because of significant
increase in the operating costs of the company. On the other hand, Easyjet is having an operating
profit margin of 7.30% in the year 2019 which is lower in comparison to the ratio of Ryanair. It
also has dropped as compared to the previous year but with a very less margin which can be
better performance in contrast with that of Ryanair. Both the companies have to work on
maintaining its operational expenses of the company.
Return on Capital Employed: -
Year Easyjet Ryanair
2017 9.81% 17.13%
2018 11.83% 18.68%
2019 8.48% 11.00%
4

The return on capital employed generated by Easyjet is 8.48% and on the contrary
Ryanair is earning 11% returns on the total capital employed of amount 9451. It can be observed
that Ryanair is employing its capital resources in a better way so that efficient earnings can be
derived. Whereas Easyjet id suffering from the poor management of its capital resources. Again
the performance is depreciating over the years since the return on the capital employed of both
the companies is dropping as compared to the previous years of its operations.
Liquidity Ratios
Current Ratio: -
Year Easyjet Ryanair
2017 1.03 1.56
2018 0.97 1.22
2019 0.79 0.92
5

The current ratio of the company shows the availability of the current assets in order to
meet the short term obligations of the company that are arising within one year. The higher the
ratio the better is the liquidity position of the company. The comparative analysis of the past
three-year data from the annual reports show that Ryanair has higher current ratio in the 2019
which is 0.928 as compared to Easyjet with 0.7942. Although both the companies are showing
decreasing graph in the management of liquidity over the years but Ryanair is in the better
position to meet the short term liabilities (Easton and et.al., 2018).
Quick Ratio: -
Year Easyjet Ryanair
2017 0.16 1.15
2018 0.3 0.78
2019 0.2 0.51
6

The quick ratio of Ryanair is better than that of Easyjet further improving its liquidity
position and ultimately the credibility of the company. The quick ratio of Ryanair is 0.51
whereas on the contrary that of Easyjet is just 0.2. This shows that it has poor management of
highly liquid assets that can meet the instant liabilities of the company through encashment. On
the other hand, it can be observed that Ryanair is showing a downward trend in the ratio since
the past three years whereas Easyjet has improved the quick ratio in 2019 in contrast with that of
2017. This shows that the management of liquidity position is improving and has better scope to
rise and manage its business operations in a smooth and efficient manner.
Solvency Ratios
Debt Equity Ratio: -
Year Easyjet Ryanair
2017 0.34 0.88
2018 0.28 0.78
2019 0.58 0.63
7

The debt equity ratio of Easyjet shows that the company initially followed a capital
structure where the majority of funds are acquired from the equity sources but in the recent years
it has started incorporating the debt in the portfolio in order to take the benefit of leverage
(Amalia, Fadjriah and Nugraha, 2020). On the contrary Ryanair has been partially obtaining the
finance from equity and partially from the debt sources so that appropriate balance can be
maintained. But it can be analysed that slowly and gradually Ryanair is decreasing its debt
liabilities and increasing the Equity funds. It is necessary to maintain balance between financial
obligations and forgiving the stake of ownership.
Interest Coverage Ratio: -
Year Easyjet Ryanair
2017 14.75 22.07
2018 15.8 29.72
2019 8.16 16.77
8

The interest coverage ratio of Ryanair is better, showing that it is highly capable of
covering the payments of the interest from the earnings that are made throughout the year. On
the contrary Easyjet can cover the interest amount lesser times through the profits of the year. In
the year 2019 the interest coverage ratio of Ryanair is 16.7 whereas that of Easyjet is just the half
which is 8.16. It can be observed that Ryanair has a better earning capacity such that all its
financial obligations are easily met or it has scope of meeting these liabilities more up-to 17
times.
Efficiency Ratio
Accounts Receivable ratio: -
Year Easyjet Ryanair
2017
49.97 1385.16
2018
62.08 1327.14
2019
131.65 1664.48
9

The accounts receivable ratio of both the companies is almost the same which is they
take approximately 132 days to recover the amount of debtors or accounts receivable to whom
the goods and services were provided on credit basis. Apart from this one more significant
concern is that the recovery period and efficiency of Easyjet has significantly dropped as
compared to the past performance of the company (Nugraha, Puspitasari and Amalia, 2020). As
compared to the data of 2017 where it took average 50 days to recover the amount has
significantly increased by 2.5 times which shall have surely impacted the operational cycle,
working capital requirement and the liquidity position of the company.
Accounts Payable ratio: -
Year Easyjet Ryanair
2017
25.11 30.53
2018
17.93 32.92
2019
18.83 18.7
10

The accounts payable ratio of both the airline companies in 2019 is also almost the same
which is it takes almost 19 days to pay the dues to the creditors of the company. Also with the
comparison of the financial statements it can be assessed that both the companies are taking
lesser time then before to meet their liabilities. This can prove to be both positive and negative
for the company. The positive side is that the credibility and the brand image of the company
shall increase but simultaneously the negative end is that the accounts receivable and the payable
ratio are not moving along and this will for sure create tighter liquidity position for the company.
Apart from this it can also be assessed that as compared to the previous two years the company is
getting lesser credit period which means that the power to negotiate is lower.
Asset Turnover ratio: -
Year Easyjet Ryanair
2017
0.78 0.36
11
09/07/1905 10/07/1905 11/07/1905
0
5
10
15
20
25
30
35
Easyjet
Ryanair

2018
0.78 0.37
2019
0.77 0.71
The asset turnover ratio of Easyjet is 0.7676 indicating the efficiency with which the
company is using its assets for the generation of its revenues. On the contrary Ryanair is having
lesser efficiency while using the assets of the company, since it has 0.71 asset turnover ratio
(Annual report of Ryanair Holding plc, 2019). The statistics of Easyjet shows that the utilization
of the assets have shown consistency whereas in case of Ryanair it has improved by making the
12
2017 2018 2019
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9

ratio almost the double as compared to the previous year. This indicates that comparatively the
operational efficiency has increased over the years with the optimum utilization of the available
assets with the company.
Coverage Ratio
Debt service coverage ratio: -
Year Easyjet Ryanair
2017
0.43 0.39
2018
0.5977 0.45
2019
0.25 0.2884
13
09/07/1905 10/07/1905 11/07/1905
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Easyjet
Ryanair

The debt service coverage ratio of Easyjet is 0.245 and that of Ryanair is 0.288. The
comparative analysis shows that Ryanair is better capable of managing the debt obligations with
the availability of cash flows with the company which lands them in a safe position as to
liquidity and credibility of the company. By interpreting the data in contrast with the last year
Easyjet has just half the debt service coverage in the current year. Also, a minimal amount of
change can be experienced in the data of Ryanair in terms of last year 2018 which was 0.44.
Market Prospect Ratio
Earnings per share: -
Year Easyjet Ryanair
2017
0.77 1.05
2018
0.91 1.21
2019
0.89 0.77
14
2017 2018 2019
0
0.2
0.4
0.6
0.8
1
1.2
1.4

The maximization of the wealth of shareholders is one of the significant goal of the
company which is undertaken more efficiently by the Easyjet company by maintaining the
earning per share up-to 0.89 per share in 2019. On the contrary the Ryanair has fallen some back
with the competitor since it has been able to generate earnings per share up-to 0.77. Easyjet is
consistent over the years regarding the earnings per share of the company but on the other hand
Ryanair has dropped from 1.2 in last year to 0.77 this year which shows inefficiency on the part
of the company and also affect the satisfaction level of its shareholders (Annual report of Easyjet
plc, 2019).
Dividend pay-out ratio: -
The dividend pay-out ratio of Easyjet is 0.667 in 2019 which has significantly grown as
compared to that of 2017 which was 0.233. It has increased of about 3 times over the years. In
contrast to this Ryanair has not paid dividends since the last three years i.e from 2017 to 2019.
So the dividend pay-out ratio of the company cannot be assessed by the company. This could be
impacting the shareholder's satisfaction level in a very negative manner.
Comparative analysis : Horizontal Analysis
EASYJET RYANAIR
Particular
s
2019 %
change
2018 % change 2017 2019 %
chang
e
2018 %
chang
e
2017
Sales 6385 8.25% 5898 16.86% 5047 7697.4 7.64% 7151 7.56% 6647.8
Gross 1549 7.72% 1438 29.54% 1110 2204.6 - 2638.7 12.10 2353.8
15

profit 16.45
%
%
Operating
profit
466 -20.20% 584 38.38% 422 1016.8 -
39.01
%
1667.3 8.68% 1534
Interest 60 100.00% 30 7.14% 28 60.6 8.02% 56.1 -
19.28
%
69.5
Tax 81 -6.89% 87 -3.33% 90 63.1 -
60.83
%
161.1 4.33% 154.4
Net profit 349 -2.51% 358 17.37% 305 885 -
38.97
%
1450.2 10.20
%
1315.9
Current
assets
2119 6.00% 1999 15.28% 1734 3804 -
9.19%
4189 -
10.98
%
4706
Non-
current
assets
6044 21.02% 4994 17.86% 4237 4096.6 20.03
%
3412.9 13.31
%
3011.8
Current
liabilities
2668 29.51% 2060 23.35% 1670 9446.7 15.58
%
8172.8 12.20
%
7283.6
Non-
current
liabilities
2510 47.64% 1700 13.40% 1499 3939.2 -
12.07
%
4480 -
1.64%
4554.9
 The revenue of operations as generated by both the companies is growing over the years.
But the growth rate of Ryanair is consistent with 7.5% growth every year as compared to
the previous year.
16

 The gross profit of Easyjet has increased as compared to the past year but it can be
noticed that the growth rate with which it has increased has significantly dropped down.
Apart from that in Ryanair has earned lesser gross profit due to the operational
inefficiency in the company (Ichsan and et.al., 2021).
 The amount of interest in Easyjet has doubled as compared to the last year and this is
because it has incorporated the debt funds in its capital structure.
 The net profit of both the companies have dropped due to the poor management of the
expenses but comparatively Ryanair has suffered more significantly in this case.
2. Critically evaluating the corporate strategy undertaken by the concerned companies and their
future prospects
Easyjet (EJ) plc focuses on building strong position in Europe's flying airport. The firm is
confident about its existing strategies as their main objective is to win competition among similar
companies in the industry. There are numerous plans that organization have formed to obtain
competitive advantage and for effective performance of enterprise. This includes an unparalleled
network & market position, well-known brand, effective low cost structure, reducing
maintenance value, etc.
The company have for strategic priority in turn that enhances its position in the market. In
addition to this, Easy jet gives precedence to safety of customers by establishing higher
standards. However, company has invested its huge capital for making sure that its operations
does not comprise with customers' safety (Hernandez and Menon, 2021). The European
Commercial Aviation safety team measures and minimizes the risk associated with company as
the organization has also taken step of establishing a new Safety Management System (SMS).
Easy jet plc has proven this objective by maintaining history of no fatal accidents.
Easy jet uses method of meeting customers’ needs through selecting right routes at the
right time so that it can succeed with strong client base. For this purpose, organization has also
changed current business model for new route, seat and slot system. Plan of action that has been
taken for providing outstanding customer service includes fresh food supply, issues less lost
bags, smaller amount of cancellations, punctuality in terms of flights arrival and landing times,
etc. Company focuses on these factors because it influences customers' preference for selecting
any brand. Such benefits can play a crucial role in enhancing customers satisfaction and gaining
17

loyalty which ensures to build strong customer and company relation.
From the research it has also been analysed that the reason behind Easy Jet success is that
its covers all destinations clients. Further, business aims at serving low cost tickets and other
facilities by ensuring maximum margins (Li, Cui and Zheng, 2021). It offers free tickets also to
special customers for upholding an image of its low fare serving company. EJ is the low cost
operating company in Europe as it focuses on reducing and controlling cost from all sectors of
operations. For example, in previous years the enterprise has faced increased fuel cost that
resulted in higher price of each seat but the management showed no interest in boosting fair
value and continued to offer competitive prices to attract and retain customers.
Marketing Policies of any organisation should be so effective that brand is recognisable
by targeted segment of firm. In addition to this, the presence of company must be on all business
based platforms as it contributes in attracting customers for products and services. The clients
can get information regarding timings, charges, variety,etc. through such program. EJ has
developed its website in effective way that ease customers to get all necessary information
regarding its company’s operation. Further, enterprise has also enabled the customers to book
tickets online which is major component of corporate strategy. It enhances its operation that
make possible for organisation to modify firm's profits margin. Once these margins are inclined
it makes positive impact on corporation's equity holder which establishes well maintaining
reputation in the industry. With respect to this, such practices improve creditworthiness of EJ and
enable it to generate funds for future operations.
Easy Jet utilizes these strategies and method in turn it can obtain financial, physical and
technical resources which results into indefinite quantity of business's operations. For future it
has establishes related programs to accomplish improvement in existing methods. To deal with
global competition it uses merger and acquisition which scope to deepen its further service
expansion plan.
Ryanair Holding (RH) Plc
RH aims to establish own company as European's biggest schedule passenger airline
group. For this purpose, organization focal point is on improvement in its current methodologies
of corporate dealing with customers. Ryanair Holding plc. seek to offer low fare service to
generate passenger traffic (Carida and Bonizio, 2018). It sets the prices of its tickets on the basis
of demand of particular flights which makes it convenient for organization to have desirable
18

profit margins with effective corporate operations. To gain higher demand of its business it
establishes many programs such as
Promotional fair campaigns.
In addition to this, the another way it pays attention on research and development
department of firm to get details of changing circumstances of world. It aids business to obtain
not only effective operational plan but also saves time, efforts and financial resources (Lu and
et.al., 2021). RH has provided point-to-point on short haul routes as in year 2020 it flew an
average range of 769 miles and duration of 1.89 hours. This type of working provide assistance
in saving its cost of free fight meals, movies, etc. that is usually expected by clients on longer
travelling.
Its corporate strategy includes reducing cost on four factors that consist personnel,
customer service, airport access & handling, aircraft and equipment cost. These measures make
process of RH effective and efficient. For achieving constructed goals, it conducts various
practices like a daily conference call with airport staff office to know details of first wave flight
delays and baggage short shipments. It endeavours to control its labour expenses through
incentivize higher productivity and compensation based on better performance. This method
includes providing benefits such as sales bonus payments depending on sales of crew cabinets
workers, numbers of flights or hour flown by pilots.
To increase its operational activities RH has accomplished plan of targeting customers
through travel agents, scheduling more flights on primary airports, etc. along with this Ryanair
Holding plc spend on marketing programs. RH as being part of airlines industry concentrate on
improving customer’s services as it is the biggest competitive advantage any firm can have. To
accomplish such benefits a series of customer services programs have been initiated like reduced
penalty fees, a mobile app, easy accessible company website, security analysis at airports,
allocated seating to avoid confusion, change flights policies, client friendly luggage
reimbursement, etc.
With respect to this, RH has entered into many external contracts at few airports for
passengers, aircraft handling, ticketing with effective negotiating fixed price and multiyear
contracts (Dvorak and Razova, 2018). It also prioritizes its airport by making change in strategy
by accessing primary airports that has more charges price & greater competition. It conducts this
changes as secondary and regional airport can increase cost of operating expenses and limit the
19

number of allowed take off & landings. Currently it has eliminated commission agents through
making presence of company on online platforms that aids customers to book tickets with lesser
time and efforts. Being a part of corporate strategy initiate of Always Getting Better (AGB)
customer experiences makes it as first customers' preference.
The company reduces airport charges by opting less expensive gate location as well as
outboard boarding stairs rather than jet ways which serves higher cost and operationally less
efficient to use. It has also given commitment of safety and quality care as in 35 years of
operation it has saved its image of non-accident of any passengers. It also provides ancillary
services through its website. To meet with changing economic situation and increased fuel prices
it has made more improvement in operation activity through adapting creative alternation in
corporate strategies.
CONCLUSION
It can be summarized from the above project that both are airline companies Easyjet and
Ryanair are competitors in the business and the comparative analysis using the financial
statements highlights the strengths and weaknesses of the companies. The balance of these
strengths and weaknesses shall help the company define its strategies that are to be formulated
for the future growth prospects that can be used to capitalize on the opportunities and minimize
the impact of debt suffered by the company. The ratio analysis serves as a major tool that is used
by the company's to compare their existing performance with that of the competitors in the
market. They shall be defining the various positions of the company in respect of liquidity,
profitability, operational efficiency, management of the debtors and the creditors and market
position. The motive of profitability is better fulfilled by Ryanair whereas the another objective
of maximization of the shareholder's wealth is fulfilled by Easyjet. So with the help of better
liquidity and profitability, Ryanair is able to smoothly and efficiently conduct the operations of
the company. On the other hand, Easyjet is able to boost its market position. The corporate
strategy of both the flights is operating at the low cost carriers and minimizing the charges and
applying the market penetration cost strategy so that the market share of the company is
maximized. This shall be used to define its future growth prospects of the company.
20

RECOMMENDATIONS
There can be several suggestions and recommendations that can be applied by both the
companies operating in the airline industry such that its financial performance can be maximized
and the competitive advantage can be derived. These recommendations are: -
 As per the profitability ratio of Easyjet it can be said that the company is able to generate
lesser profitability as compared to the competitor Ryanair. This makes its ability to
survive in the market pretty difficult. This can be catered by managing the expenses,
working at economies of scale which shall lower down the cost per unit of the company,
optimal utilization of the resources and proper segregation of the roles and
responsibilities.
 The profitability ratios of Ryanair shows that it has been decreased as compared to the
past years which means that the operational efficiency has been decreased due to some
reasons. They could be that the operating cycle is not working smoothly for the company
where the credit period availed is very less and the credit period allowed is too high. This
forms the tighter liquidity position for the company (Annual report, 2017). Proper
appointment of the recovery agents should be done so that the debtors of the company are
efficiently managed.
 The Easyjet is incorporating higher debts in the company as compared to the equity, so it
should focus on maintaining the balance in the capital structure of the company such that
the control of the company is also not lost to much extent and it neither poses too heavy
financial liabilities.
 In order to obtain the competitive advantage in the market and maximize its market share
the companies must try to aggressively market their services, focus on the newer target
markets and also follow back with the older customers. They should try to maximize the
level of satisfaction by improving the quality of the services that are provided.
 Ryanair must focus on maximizing the market position by providing dividend to its
shareholders of the company.
21

REFERENCES
Books and Journals
Amalia, S., Fadjriah, N. E. and Nugraha, N. M., 2020. The Influence of the Financial Ratio to the
Prevention of Bankruptcy in Cigarette Manufacturing Companies Sub Sector. Solid
State Technology. 63(3). pp.4173-4182.
Carida, V. D. and Bonizio, R. C., 2018. Operating Performance Analysis of Gol and Ryanair
Airlines. REBRAE. 11(2). pp.242-257.
Dvorak, J. and Razova, I., 2018. Empirical validation of blue ocean strategy sustainability in an
international environment. Foundations of Management. 10(1). pp.143-162.
Easton, P. D. and et.al., 2018. Financial statement analysis & valuation. Boston, MA:
Cambridge Business Publishers.
Hernandez, E. and Menon, A., 2021. Corporate strategy and network change. Academy of
Management Review. 46(1). pp.80-107.
Ichsan, R. N. and et.al., 2021. Determinant of Sharia Bank's Financial Performance during the
Covid-19 Pandemic. Budapest International Research and Critics Institute (BIRCI-
Journal): Humanities and Social Sciences. 4(1). pp.298-309.
Li, R., Cui, Y. and Zheng, Y., 2021. The Impact of Corporate Strategy on Enterprise Innovation
Based on the Mediating Effect of Corporate Risk-Taking. Sustainability. 13(3). p.1023.
Lu, W. M. and et.al., 2021. Corporate Social Responsibility, Intangibles, and Dynamic
Performance of the US Airlines: La Responsabilidad Social Corporativa, los Intangibles
y el Desempeño Dinámico de las Aerolíneas Estadounidenses. Revista de Contabilidad-
Spanish Accounting Review. 24(1). pp.104-115.
Nufus, K. and et.al., 2020. Analysis of Financial Performance: Case Study of Pt. X Employee
Cooperative/Analisis del desempeno financiero: Estudio de caso de la cooperativa de
empleados PT X. Utopía Y Praxis Latinoamericana. 25(S10). pp.429-445.
Nugraha, N. M., Puspitasari, D. M. and Amalia, S., 2020. The Effect of Financial Ratio Factors
on the Percentage of Income Increasing of Automotive Companies in
Indonesia. International Journal of Psychosocial Rehabilitation. 24(2). pp.2539-2545.
Online
Annual report of Easyjet plc. 2019. [Online] Available through::
<https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/results-centre/2019/
22

eas040-annual-report-2019-web.pdf>.
Annual report of Ryanair Holding plc. 2019. [Online] Available through::
<https://investor.ryanair.com/wp-content/uploads/2019/07/Ryanair-2019-Annual-
Report.pdf>.
Annual report. 2017. [Online] Available through:
<https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/results-
centre/2017/2017-annualreport-and-accounts-v1.pdf>
23

APPENDICES
EASYJET
S.NO RATIOS FORMULA CALCULATION
LIQUIDITY
RATIOS 2019 2018 2017
1 Current Ratio Current Assets/ Current Liabilities 0.7942 0.9703 1.038
Current Assets 2119 1999 1734
Current Liabilities 2668 2060 1670
2 Quick Ratio
(Current Assets- Inventory) / Current
Liabilities 0.2035 0.3038 0.1646
Current Assets 2119 1999 1734
Inventory 1576 1373 1459
Current Liabilities 2668 2060 1670
SOLVENCY
RATIOS
3 Debt Equity Ratio
Long term Debt / Shareholder's
Fund*100 58.79%
28.61
%
34.36
%
Long term debt 1755 975 963
Shareholder's fund 2985 3233 2802
4
Interest Coverge
Ratio
Earnings before interest and tax /
Interest on long term debt 8.16 15.8 14.75
Earnings before
interest and tax 490 475 413
Interest on long term
debt 60 30 28
24

PROFITABILITY
RATIOS
5 Gross Profit Ratio
Gross Profit / Net Revenue from
Operations*100 24.26%
24.38
%
21.99
%
Gross Profit 1549 1438 1110
Net revenue from
operations 6385 5898 5047
6 Net Profit Ratio
Net Profit / Revenue from
Operations*100 5.47% 6.07% 6.04%
Net Profit 349 358 305
Revenue from
operations 6385 5898 5047
7
Operating Profit
Ratio
Operating Profit / Revenue from
Operations*100 7.30% 9.90% 8.36%
Operating Profit 466 584 422
Revenue from
operations 6385 5898 5047
8
Return on Capital
Employed
Earnings before interest and tax /
Capital Employed*100 8.48%
11.83
% 9.81%
Earnings before
interest and tax 466 584 422
Capital Employed 5495 4935 4301
EFFICIENCY
RATIO
9
Inventory Turover
Ratio Cost of goods sold / Average Inventory
Cost of goods sold
25

Average Inventory
10
Accounts Receivable
Ratio
Net credit sales / Average Accounts
Receivable 131.65 62.084 49.97
Net credit sales 6385 5898 5047
Average accounts
receivable 48.5 95 101
11
Accounts Payable
Ratio
Net credit sales / Average Accounts
Payables 18.834 17.927 25.109
Net credit sales 6385 5898 5047
Average accounts
payable 339 329 201
12
Asset Turnover
Ratio Net sales / Average total assets 0.7676 0.778 0.7784
Net sales 6385 5898 5047
Average total assets 8318 7579 6483
COVERAGE
RATIO
13
Debt Service
Coverage Ratio Operating Income / Total Debt 0.245 0.5977 0.4346
Operating Income 466 584 422
Total debt 1902 977 971
MARKET
PROSPECT RATIO
14 Earning per Share
Earnings available to equity
shareholders / Number of shares
outstanding 0.89 0.91 0.77
26

Earnings available to
equity shareholders 349.77 358.54 511.68
Number of shares
outstanding 393 394 394
16
Dividend Payout
Ratio Dividends paid / Net income 0.667 0.452 0.233
Dividends paid 233 162 71
Net income 349 358 305
RYANAIR
S.NO RATIOS FORMULA CALCULATION
LIQUIDITY RATIOS 2019 2018 2017
1 Current Ratio
Current Assets/ Current
Liabilities
0.928
5
1.227
4
1.562
5
Current Assets 3804 4189 4706
Current Liabilities
4096.
6
3412.
9
3011.
8
2 Quick Ratio
(Current Assets- Inventory) /
Current Liabilities 0.518
0.782
4 1.155
Current Assets 3804 4189 4706
Inventory
1678.
5
1518.
7
1227.
1
Current Liabilities
4096.
6
3412.
9
3011.
8
27

SOLVENCY RATIOS
3 Debt Equity Ratio
Long term Debt / Shareholder's
Fund*100
63.95
%
78.95
%
88.82
%
Long term debt 3335
3528.
4
3928.
6
Shareholder's fund
5214.
9
4468.
9 4423
4 Interest Coverge Ratio
Earnings before interest and tax /
Interest on long term debt
16.77
8 29.72 22.07
Earnings before interest
and tax
1016.
8
1667.
3 1534
Interest on long term debt 60.6 56.1 69.5
PROFITABILITY
RATIOS
5 Gross Profit Ratio
Gross Profit / Net Revenue from
Operations*100
28.64
%
36.89
%
35.40
%
Gross Profit
2204.
6
2638.
7
2353.
8
Net revenue from
operations
7697.
4 7151
6647.
8
6 Net Profit Ratio
Net Profit / Revenue from
Operations*100
11.50
%
20.28
%
19.79
%
Net Profit 885
1450.
2
1315.
9
Revenue from operations
7697.
4 7151
6647.
8
28

7 Operating Profit Ratio
Operating Profit / Revenue from
Operations*100
13.21
%
23.32
%
23.08
%
Operating Profit
1016.
8
1667.
3 1534
Revenue from operations
7697.
4 7151
6647.
8
8
Return on Capital
Employed
Earnings before interest and tax /
Capital Employed*100
11.00
%
18.68
%
17.13
%
Earnings before interest
and tax
1007.
2
1671.
4
1537.
5
Capital Employed
9154.
1
8948.
9
8977.
9
EFFICIENCY RATIO
9
Inventory Turnover
Ratio
Cost of goods sold / Average
Inventory
1664.
48
1327.
14
1385.
16
Cost of goods sold
5492.
8
4512.
3 4294
Average Inventory 3.3 3.4 3.1
10
Accounts Receivable
Ratio
Net credit sales / Average
Accounts Receivable
131.4
6
127.8
1
122.4
2
Net credit salse
7697.
4 7151
6647.
8
Average accounts
receivable 58.55 55.95 54.3
11 Accounts Payable Ratio
Net credit sales / Average
Accounts Payables
18.69
6
32.91
8
30.52
66
Net credit sales 7697. 8948. 8977.
29

4 9 9
Average accounts payable 411.7
271.8
5 294.1
12 Asset Turnover Ratio Net sales / Average total assets
0.714
8
0.370
5
0.358
1
Net sales
9154.
1
4512.
3 4294
Average total assets
1280
6.25
1217
5.75
1198
9.7
COVERAGE RATIO
13
Debt Service Coverage
Ratio Operating Income / Total Debt
0.288
4
0.448
3
0.390
3
Operating Income
1016.
8
1667.
3 1534
Total debt
3524.
7
3718.
9
3930.
3
MARKET PROSPECT
RATIO
14 Earning per Share
Earnings available to equity
shareholders / Number of shares
outstanding
0.773
8719
832
1.215
0816
925
1.052
9727
135
Earnings available to
equity shareholders 885
1450.
2
1315.
9
Number of shares
outstanding
1143.
6
1193.
5
1249.
7
30