Financial Statement Analysis
Added on 2019-09-30
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Running head: FINANCIAL RATIO ANALYSISFINANCIAL RATIO ANALYSIS[Document subtitle][DATE][COMPANY NAME][Company address]
1FINANCIAL RATIO ANALYSISTable of ContentsIntroduction to Company..............................................................................................................2Ratio Analysis.................................................................................................................................2Profitability of the Company........................................................................................................2Financial Stability of the Company.............................................................................................5Asset Utilization of the Company................................................................................................6Movement in Share Price of Company........................................................................................7Price Earnings Ratio......................................................................................................................7Definition.....................................................................................................................................7Factors which influence Price Earnings ratio..............................................................................8Share Market Ratio.......................................................................................................................9Statement of Accounting Policies...............................................................................................10Non-Financial Information.........................................................................................................10Environmental and Social Issues...............................................................................................10Conclusion and Recommendation..............................................................................................11REFERENCES............................................................................................................................12Appendix.......................................................................................................................................13
2FINANCIAL RATIO ANALYSISIntroduction to CompanyAir New Zealand Limited is national airline based in New Zealand. The airline executes as perthe scheduled flights of the passenger to international and domestic destinations in variousnations near United Kingdom and Pacific Rim. Since the year 1999, the airline is a part of StarAlliance. This report will analyze the financial performance and operations of the corporation forthe year 2016. This report aims to provide an analysis and assessment of the financial position,performance, liquidity and profitability of the Air New Zealand Limited using the figures fromstatements of fiancé for the year 2016. Financial ratios, in analysis, were utilized to earnsignificant review of particular area of examination of performance of company. In the followingsections, the Profitability, financial stability and asset utilization of the company have beendiscussed. Furthermore, the share market and price earnings ratio as well as the Non-Financialinformation is detailed in this report to provide an overarching view of the company and give theadvice regarding investment decision in this company.Ratio AnalysisProfitability of the CompanyProfitability ratios are considered as most famous metrics to analyze the financial information.They are significant as they are used for different comparative studies like industry benchmarkanalysis and competitive analysis. They also assess the ability of the business to create moreearnings than the expenses.Particulars Ratios (2013)Ratios (2014)Ratios (2015)
3FINANCIAL RATIO ANALYSISRETURN ON EQUITY10.4014.2117.04RETURN ON ASSETS3.294.575.18EARNINGS PER SHARE0.170.230.29As it can be viewed that the return on equity ratio for Air New Zealand Limited is getting higherevery year which indicates that shareholders are getting increased amount on their investmentevery year. Also, the ratio of return on Assets measures the effectiveness of the Air New ZealandLimited to earn return against the investments in the assets ("Air New Zealand Limited:Financials, earnings estimates and forecasts for Air New Zealand Limited | AIR | 4-Traders",2017).A high ratio is favorable to the investors as it depicts that Air New Zealand Limited ismanaging effectively the assets to generate more income. The trend of profit is upward as eachyear the ratio is getting up. Earnings per share ratio is similar to the market prospect orprofitability ratio ("NZX Markets", 2017). Higher earnings is better than lower earnings per shareratio as it indicates that Air New Zealand is has more amount of income to be distributed to theshareholders.
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