BUS5IAF Financial Analysis of Virgin Australia AUS
Added on 2020-05-08
19 Pages2142 Words78 Views
RUNNING Head: Financial analysis of Virgin Australia AUS1Name of the studentTopic- Financial analysis of Virgin Australia AUSUniversity name
Financial analysis of Virgin Australia AUS2Table of ContentsIntroduction.........................................................................................................................2Answer to question-1..........................................................................................................2Short term and long term debts of company....................................................................2Consistency of debt structure of company.......................................................................3Company and industry operates its debt to influence the proportion of short-term to long-term debts............................................................................................................................4Computation of cost of debt............................................................................................4Answer to question no-2.....................................................................................................6Company’s cost of equity................................................................................................6Evaluate and discuss your company’s revenue, earnings, EPS, dividends and growth Expectations.................................................................................................................................6Growth expectation of company......................................................................................7Computation of PE ratio..................................................................................................9Comparable value............................................................................................................9Additional data and information would be preferred to value of the assets..................11Answer to question no-3...................................................................................................12Computation of weighted average cost of capital..........................................................12Explanation of tax rate in relation to WACC................................................................12
Financial analysis of Virgin Australia AUS3Why there is difference in cost of debt and cost of equity............................................12Should current liabilities be included in cost of capital?...............................................13Major value of the WACC calculation..........................................................................13Virgin Australia Company has used WACC in investment decision............................14Capital structure of company with the relevancy of the industry..................................14Capital structure and what economic circumstances.....................................................15Answer to question-4........................................................................................................16Market analysis..............................................................................................................16Current literature search................................................................................................16Uniqueness of Virgin Australia.....................................................................................16Conclusion..........................................................................................................................17References.........................................................................................................................18Virgin Australia...................................................................................................................18
Financial analysis of Virgin Australia AUS4Introduction This report has reflected the financial analysis of Virgin Australia AUS and its capitalstructure. Weighted average cost of capital and PE ratio computation assist in evaluating themarket analysis and its business operation of Virgin Australia AUSPresentdetailsofVirginAustraliaAUSIt is an Australian company which is indulged in providing airlines services and fleet servicesaround the globe. The parent company of Virgin Australia AUS is Virgin Australia Holdinghaving Brisbane Australia.Answer to question-1Short term and long term debts of company Virgin Australia AUS has lower down its short term debts by 75% as compared to lastyear data. It is evaluated that company has reduced its short term debts with a view to reduce itsfinancial leverage. It is evaluated that long term debt of company is slightly stable and VirginAustralia has managed its long term debt with the industrial average debt. The industry debt hasbeen computed by evaluating all the rivals long terms debts on average basis. Particular 20162017Industrialaverage debt AUD inMillion AUD inMillion AUD inMillion
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