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Financial Analysis Management & Enterprise : Assignment

   

Added on  2020-10-04

18 Pages3933 Words33 Views
Financial AnalysisManagement & Enterprise

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Comparison of financial performance of organisations.....................................................12. Cash flow ratios of Emirates Company..............................................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................7

INTRODUCTIONFinance is required in the business in order to carry out operational tasks in effective way.In relation to this, financial ratios are useful to provide clarity to business about its performance.Present report deals with Lufthansa Organisation and Turkish Airlines engaged in the aviationsector. Moreover, Emirates Company is also discussed with reference to computation of cashflow ratios. Financial ratios are calculated for above two companies which provides clarity ofperformance of both in the best possible way. Moreover, comparison of two companies are madeso that efficiency and inefficiency can be easily highlighted. Thus, ratios of various categoriesare calculated to find out financial health of companies. While, cash flow ratios are alsocomputed for Emirates Company. Performance of all three organisations are analysed to find outbetter performing one. 1. Comparison of financial performance of organisationsThe financial ratios are quite important to assess organisation's financial health in the bestpossible way. This is quite essential for various users of accounting information having stake inthe business. Financial ratios are based on the past data of performance of the company and assuch, various ratios can be computed from the financial statements in the best possible way.Financial statements such as balance sheet, income statement and cash flow statement are themain pillars of any organisation so that it may be able to compute ratios in the best possible way. Financial ratios are numerical figures obtained from the financial statements of thecompany in effective way. Management of the organisation is benefited by ratios as it help themto assess financial performance in the year and if any deviations exist in the actual results thennecessary steps are taken to remove variances. Thus, ratios assist in making effective and betterdecisions for the betterment of the company in the best possible way. In relation to this, financialperformance is evaluated by various stakeholders such as investors, creditors, suppliers andmany other in determining organisation's performance so that they may be able to take better andeffective decisions with much ease (Olson and Wu, 2017). In relation to ratios, financial performance of Lufthansa and Turkish Airlines have beencarried out so that analysis of growth and profitability may be done by comparing two bigcompanies engaged in aviation sector. Lufthansa Organisation is one of the leading Germanairline company and having various subsidiaries attaining good quantum of revenue by satisfying1

customers in effective manner. In contrary to this, Turkish Airlines is another big companyheadquartered in Turkey operating in international destinations and enhancing level of customersquite effectually (2016 12 Months Financial Statements, 2016). 2Illustration 1: Profitability ratios

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