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Performance Evaluation of the Company Qantas Airways Limited

   

Added on  2021-06-17

23 Pages6137 Words322 Views
Running Head: Accounting for business 1Project Report: Accounting for business

Accounting for business 2Executive summaryIn this report, financial and non financial performance of an organization has been evaluated to measure the performance and the position of Qantas airways limited. This report measures the financial performance and the position of Qantas limited to make a decision of investment into the company. For evaluating the performance of the company, financial statement of the business of last 2 years. Annual report of the company and various news articles about the company has been studied and it has been found that the investment into thecompany would offer higher returns to the company.

Accounting for business 3ContentsIntroduction.......................................................................................................................4Company overview...........................................................................................................4Financial statement analysis.............................................................................................5Income statement analysis............................................................................................5Cash flow statement analysis........................................................................................6Financial position statement analysis...........................................................................6Ratio analysis....................................................................................................................7Return on assets............................................................................................................7Inventory turnover........................................................................................................8Quick ratio....................................................................................................................9Price earnings ratio.......................................................................................................9Recommendation............................................................................................................10Conclusion......................................................................................................................12References.......................................................................................................................13Appendix.........................................................................................................................15

Accounting for business 4Introduction:Analyzing over the financial statement of an organization is one of the methods to evaluate the investment position and the returns from the company. Financial analyst is a process which examines the financial items and information of an organization to reach over a decision about the business. Financial analysis process includes the balance sheet, income statement and the cash flow statement of an organization to measure the changes and compare the financial statement of the company with other company to identify the market position. This process makes it simple for the financial analyst to measure that what changes have occurred into the financial presentation of the corporation in last few years. It offers the information to the financial managers, employees, customers, stockholders, suppliers, financial institutes etc of the company about the financial performance of the company. In the report, financial investigation learning has been done on Qantas limited. The financial statement of the company of last 3 years has been evaluated along with the financialstatement of Virgin Australia limited, competitor of Qantas limited. The financial statements of the company has been evaluated through identifying the changes into the financial statement of the company in last few years as well as through conducting the study of ratio analysis on the company. The report offers recommendation to the investors of the market to invest into the company. Company overview:Qantas airways limited are based in the Australian market. The company offers the airline services to its customers as domestic level as well as international level. Mainly, the company is involved in the operations of domestic air transportation services and international domestic air transportation services, frequent flyer loyalty program and the provision of freight services (Reuters, 2018). The company is operating its business through various segments. Some of the segments of the company are Qantas domestic, Jetstar group, Qantas international, Qantas loyalty, Qantas freight and corporate. The segment of Qantas international, Qantas domestic and Jetstar group are involving into the passenger flying business (Our Company, 2018). The Qantas freight segment is engaging into the freight express business and air cargo. Further, the other segments are also offering the different services to the customers of the company. The company has diversified its market at international level as well as to

Accounting for business 5enhance the market share and manage the operations of the company. The company is the oldest airline company in Australian market and it is among the largest airline companies in Australia. Financial statement analysis:Financial statement analysis is a process which takes the concern of income statement, changes in equity statement, cash flow statement and the balance sheet of the company to measure the financial performance of the company. Financial statement analysis and the outcome of financial statement analysis make it simple for the company to measure the performance of the company. The financial statement analysis of Qantas has been conducted and evaluated the changes which have occurred into the financial performance of the company in last few years. The financial statement analysis of the company is as follows: Income statement analysis:Income statement is the final financial statement which includes the revenue, cost of revenue, various operating expenses and net income which has been generated by the company in a particular time period. The income statement of an organization is one of the most scrutinized financial statements which are required to issue by every organization. The various information from income statement of the company could be calculated and measure to identify the current performance of the company and the changes into the organizations of the company. Income statement of Qantas limited has been estimated to measure the financial performance of the company. On the basis of annual report (2017) of the company, it has been measured that the total revenue of the company has been lowered by 0.66%% from 2016 in 2017. However, it has been found that the gross profit of the company has been enhanced by 0.36%. Further evaluation on the income statement of the company briefs that the operating income of the company has been lowered by -19.07% and the operating expenses of the company has been enhanced by 3.36%. It leads to the net income of the company which has been faced decrement of -17.20%. The income statement of the company has been compared to the virgin Australia holdings limited and on the basis of the annual report (2017), it has been found that the revenue of the company has been enhanced but due to high operating expense, the net incomeof Virgin Australia limited has been lowered by -15.71% (Appendix).

Accounting for business 6It explains that the net profit level of both the companies have been reduced due to changes into the industry position and increment in the prices. However, it has been found that the internal changes and the policies of the company have been better and the operations of the company have been affected due to industry changes only. Cash flow statement analysis:Cash flow statement is the final financial statement which includes the cash flow fromoperating activities, investing activities and the financial activities which have been generatedby the company in a particular time period. The cash flow statement of an organization is evaluated by the financial analyst and the financial officer of an organization to evaluate the cash and liquidity position of the company. The various information from cash flow statement of the company could be calculated and measure to identify the current cash position of the company and the alternations into the cash position of the company. Cash flow statement of Qantas limited has been estimated to measure the cash flow position of the company. Annual report (2017) of the company explains that the total cash flow from operating activities of the company has been lowered by -4.08% from 2016 in 2017. The changes have taken place due to huge cost of revenue of the company. Further, it has been found that the cash flow from investing activities and financing activities of the company has been enhanced by 6.4% and -53.21%. Further evaluation on the cash flow statement of the company briefs that the free cash flow of the company has been enhanced by11.24%. It explains that the overall cash position of the company has been better. The cash flow statement of the Qantas limited has been compared to the virgin Australia holdings limited and it has been found that the free cash flow of Virgin Australia has been lower by 64.41%. It explains that the cash flow position of Qantas limited is far better than the Virgin Australia limited. Financial position statement analysis:Financial position statement (Balance sheet) is the final financial statement which includes the non-current assets, current assets, liabilities, stockholder’s equity etc. of an organization on a particular day. The financial position statement of an organization is one of the most scrutinized financial statements which are required to issue by every organization. The various information from balance sheet of the company could be calculated and measure

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