REPORT ON ANALYSIS OF THE FINANCIAL REPORTS.

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Report on Analysis of the Financial Reports British Airways vs. KLM | Executive
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REPORT ON ANALYSIS OF
THE FINANCIAL REPORTS
BRITISH AIRWAYS vs. KLM
FINANCIAL REPORTING &
MANAGEMENT ACCOUNTING
Author: EX18084

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Report on Analysis of the Financial Reports British Airways vs. KLM
Executive Summary
The company analysis is an old method of valuing a company’s worth and assessing its cash
flow, profit and assets. The valuation also helps in comparison to the competitors. All listed
company follows the accounting principles and it is very important that the worldwide accepted
accounting principles are only followed in case of any listed company. British Airways and
KLM royal Dutch’s are the two major airline companies that industry that got affected in the
time of financial crisis of 2008 and in today’s times stands as the most strongest company. In the
project the valuation and its accounting standard’s shall be studied along with the ratio analysis.
The ratio Analysis is a method to understand the company position easily. The acid test ratio,
profitability ratio, debt to equity test helps the investors to understand where does the industry
stands in the market. Does the company is holds huge Debt or it holds more asset in comparison
to other industries in the same industry.
In the time of crisis the company forms strategic plans that keeps the crisis free. The asset, cash
and other factors are before-hand planned to be prepared in the time of crisis. In this project the
important factors of strategic planning will be discussed.
Period between 2013- 2017 is considered and the analysis is done on that basis. All the financial
reports are taken into the consideration. The company’s desirable principal follow strategies are
also highlighted. The strategic planning and how the company is working now is studied.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Table of Contents
Executive Summary.......................................................................................................................1
Introduction....................................................................................................................................4
Desirable Characteristics of financial assessment....................................................................5
Company Analysis to under the adaptation of the Desirable characteristic.............................6
The desirable Characteristic of British Airways:.....................................................................7
Strategic Planning of British Airways:.....................................................................................8
The Desirable Characteristic of KLM Royal Dutch:................................................................8
..................................................................................................................................................8
Strategic Planning and Competition:........................................................................................9
Comparative Analysis of British Airways and KLM Royal Dutch Airways.........................10
Profitability Ratios.................................................................................................................11
Return on Equity Ratio (ROE) =............................................................................................11
Return of Assets (ROA) ........................................................................................................12
Net Profit Margin ..................................................................................................................13
P/E = Stock Price Per Share / Earnings Per Share.................................................................14
PCF ratio = market price per share / cash flow per share.......................................................14
Liquidity Ratio:......................................................................................................................15
Current Ratio .........................................................................................................................16
Quick / Acid Test Ratio..........................................................................................................16
Gearing Ratios........................................................................................................................17

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Report on Analysis of the Financial Reports British Airways vs. KLM
Debt to Equity Ratio...............................................................................................................17
Leverage Ratio ......................................................................................................................18
Efficiency Ratios....................................................................................................................20
Fixed Assets Turnover ...........................................................................................................20
Cash Flow Margin for Operation...........................................................................................20
Cash flows Margin for operating =Cash Flow from Operations / Net Sales.........................20
Activity Ratio.........................................................................................................................21
Creditors Payment Period = Trade creditors / credit purchases Number of days).................21
Price to cash flow ratio:..........................................................................................................22
Conclusion....................................................................................................................................23
Reference......................................................................................................................................24
Appendix 1....................................................................................................................................26
1.1 Ratio analysis...................................................................................................................26
1.2 PNL statement of British Airways...................................................................................32
1.2 Balance sheet Of British airways.....................................................................................33
1.3 Cash Flow statement of British Airways..........................................................................34
Appendix 2....................................................................................................................................35
2.1 PNL statement of KLM Royal Dutch...............................................................................35
2.2Balance statement of KLM Royal Dutch..........................................................................36
2.3Cash flow statement of KLM Royal Dutch.......................................................................37

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Report on Analysis of the Financial Reports British Airways vs. KLM
Introduction
Airline industry is an ever changing industry in the world. Market change, Globalization, new
technology has given wings to this industry. The airline industry is protected by many national
and international agreement and policies. The airline industry is a very competitive market where
cost and comfort are always balanced for higher revenue and customer satisfaction. The market
is also very cost sensitive due to the surge in Fuel rates, competitors and customer demands.
British Airways Plc is among the most sought after airways in Britain and Europe. British
Airways Plc is the UK’s one of the largest airways and also the world’s leading luxury airways.
The major business is in London, Heathrow and Gatwick. BA operates the most international
schedule airline in the world. It serves more than 1000 destination in over 500 countries. BA is
the member of world Alliance which serves a network of 600 airports all over the world. It was
founded in year 1974. It spends millions of dollar to launch new plan and strategies to delight the
customer.
The second most sought after airlines in Europe is KLM Royal Dutch’s. It the oldest schedule
airline in the world operating today. KLM also holds subsidiaries ‘Transavia and Martinair’.
Transaviar is the one of the leading cost effective airlines .In 2004 the KLM merged with Air
France both company became the biggest air companies serving more than 1 million passenger in
a year. The company lead the motto to keep the customers happy and making them their brand
for the company. KLM works towards sustainable growth.
The financial analysis is used by the investors, creditors and stakeholder to evaluate the company
before making any decision. Thus there is a major need to investigate the financial statements of
the company. There are several methods to do the analysis and the most commonly used are the
ratio analysis and the common size analysis. These analysis gives a clear picture of company’s
position and what is its performance after 1 year of operation. Financial analysis states the health
and stability of the company in that particular industry. The only limitation in these analysis is
that the information used is totally based on the external information provided by the company.
The data is publically available and is secondary data form.
Desirable Characteristics of financial assessment
Financial assessment is done to understand the position and value of the company. The
assessment is done based on the data in the balance sheet, financial statement and cash flow
statement. The asset and liability is assessed by the financial assessment. It is the responsibility

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Report on Analysis of the Financial Reports British Airways vs. KLM
of the company to follow the GAAP system so that nothing remains hidden which might give
false representation of the company to the stakeholders.
The management assessment is the second most important factor to assess the strength of the
company. The leadership quality that the management of the company is efficient and how the
company takes into the account all cost efficiency. The skills include the decision making of the
company. Motivation factors of the employees and the customer satisfaction level that the
company can give to its customer at any period of the time.
The financial data issued by the company needs some of the key points to include in it.
Fundamental objective of the corporate report is to communicate the economic measurements
taken by company. It gives a clear picture of the resources and performance of the company.
The characteristics are:
 Relevance: the financial report should not put information’s which are irrelevant to the
investors and the stakeholders. This helps the stakeholders, bankers and investors to
understand the accountability of the organization. This is why it is important to follow the
GAAP and IFRS guideline so that the details are properly utilized and summarized.
 Understand ability: This characteristic is to make the financial report easy to be
interpreted. It should be understandable and comprehensible for the readers. It should
have adequate amount of information about the business and the economic information.
The complex items are also included and this can’t be eliminated just to me it simple for
the lay man.
 Timeliness: The information should be made available to the user in time. The
information presented should up to date and fresh. Old data should not insert in the report
unless it is required to be done. The information should be accurate and true about any
decision made by the management.
 Comparability: This helps to do the comparison between companies in same industry
and also across the years. This helps the users to identify the similarity and differences
between two sets of financial and economic phenomena’s. The information of any one
time should be present for the analysis for anyone to make decision about the progress or
stagnancy of the business.

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Report on Analysis of the Financial Reports British Airways vs. KLM
 Verifiability: It tell the user that the information used are well supported by the true
evidences and anyone willing to check the faithfulness of the information can be done.
This is used for the audit purpose. The information’s should be reliable so that the
investors can depend on it to analysis the economic condition.
 Neutrality: the information should not be influenced by any pre-determined results . The
preparer of the report should not be biased towards anyone. All figures included in the
report should be based on some basic measurement and should be followed year on year.
The information represented in the report should be unbiased no false information to be
provided just to influence the investors.
 Consistency: The company needs to present the information in constancy. So that the
results can be compared or tallied from period to period. This is required for the updated
if any change is done. This is required as the comparison between period to period.
Company Analysis to under the adaptation of the Desirable characteristic
All Listed companies has to issue their annual report every year to the investors. The report
consists of the Directors mission vision, year-end performance figure and the risk position of the
company. The report is the primary source for the investor to understand the performance and
earning of the company.
The desirable Characteristic of British Airways:
Annual report gives true facts and
figure that can be analyzed by the audited report of the company. British Airways director Alex
Cruz sent message through its annual report the year ended in 31 Dec, 2017. The company
delivered excellent operating profit of £1774 mn even when the environment was not favorable.
The marked revenue for 2017 was noted to be £12226 mn almost 7.3% high from the last years.
Company has announced a 5 year plan for 2017 of investing 4.5 billion pounds in customer
experience programme. The company wants to launch 70 new aircraft well equipped with Wifi,
inset power, new entertainment systems and also a new club world seat on long-haul flights. The
use of the advance aircraft shall reduce the carbon emission safe the environment. Amount shall
also be invested in the old aircrafts for safety and co2 less emission purpose. The company wants
to do partnership with renewal fuels company “Velocys” to develop a system which will convert
the household waste into the jet fuel. It shall be environment favorable.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Company paid a dividend of460mn. First interim dividend paid was of £ 100mn in April, 2017.
Second interim was also 100mn and 3rd and 4th dividend paid was £ 200 and £ 60 mn
respectively.
Over all the company releases its annual report every year end. The Auditor for British Airways
is Ernst & Young LLP. The facts are not oversized or fake representation it can be stated by
looking at the 10k form on Sec. There is no misrepresentation of any facts. The company
follows the to section 489 of the companies act 2006, and GAAP, IFRS standards and is very
easy for anyone to understand the report. Thus the company follows the desirable characteristic
of the accountings.
Strategic Planning of British Airways:
The company has made the strategic plans to promote customer satisfaction, safe operation,
reliable outcome to the customer, and maintain a capital efficiency. The investment shall be done
towards increasing the customer satisfaction and decreasing the boarding time and enable touch
screen system to be updated and fast. The company claims to be the most punctual and customer
centric airlines in comparison to it’s competitors. The company increased it’s engineering
reliability by 99%. It has implemented a new technology of the “Mototok” which is a high-tech
electrical aircraft pushback that uses radio remote control. BA is the first European airlines to
trail biometric boarding for international departures.
In 2017 the first wing was opened at Heathrow terminal 5 and new-York JFK. Investments have
been done in opening new lounges and restaurants across the major airports for customer delight.
The company is working on the data utilization enhancement programme to better utilize it for
high sales. The company is moving towards the digital empowerment to the cabin crew and the
data collected shall be used by the company to increase the sales.
The Desirable Characteristic of KLM Royal Dutch:
The message from the director of the
company Pieter Elberstells about the
mission and the vision of the company.
The company is focusing on keeping the

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Report on Analysis of the Financial Reports British Airways vs. KLM
marginal profit high and to maintain a positive free cash flow and also lower unit cost. Today
KLM is maintaining a number one position in the airline market. They are moving towards the
digital solution to the customers. KLM is going to be century old in 2019 and the company is
preparing high to mark the 100th years of the company to be successful.
The company’s revenue reached to 10.3 billion Euros and the operating income rose to Euro 910
mn. KLM has worked towards upgrading the product. It has invested around EUR 925mn in
ability to keep the customers happy. The company added two new Boeing aircrafts. This has
increased the confidence of the investors as Boeing is most expensive plans. To make the
company more assessable for the employee they have removed most of the management layers
and empowered their staff with the digital services. To be ahead in operation and profit revenue
the Air France and KLM along with India based Jet airways and along with Delta Airlines and
China eastern airlines signed a corporation agreement and all acquiring 10% stake in the Air
France KLM.
The company is fully prepared for any risk positions. It has started to work for enhancing its
cargo service and focusing on small and medium loads for increased profitability. The company
is investing on the ecommerce platform for easy and increased sell and purchase. Ultimately
KLM has a policy to protect the rights of the passengers. As Customer is GOD for KLM.
Strategic Planning and Competition:
Strategic planning and analysis is a process by which the company make plans to safe guard any
precarious situation or to eliminate loopholes. It helps the company to stand strong in any crisis
situation and live a high profit and happy customer company.
An effective analysis of the present and future scenario of any firm list downs the main risk and
opportunities their firm has ever taken into the account or are prepared to take into the future.
Airline industry has a huge demand and thus has a huge amount of players in to it. The industry
is full of demand and supplies. The airways carrier divide into the high class and low class
carrier.

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Report on Analysis of the Financial Reports British Airways vs. KLM
The figure1.shows the Average Fuel Efficiency
BA as well as KML royal are a strong brands and has always benefited from their high standards
services. The companies have more than 2/3 of its revenue generated from the UK, America and
Europe. The companies faces the threat from low cost carrier in their areas every year. The
excessive capacity of the US market sometime make the competitors to tap the new markets of
Europe.
Both the companies has a work force as large as 3500 employees all over the world. Whereas
KLM has slight high Employees around 5000. Both the company being a customer oriented
service sector makes it their major priority to keep the customer satisfied and happy. New
investments in purchasing new units of space for lounge or adhering to new technology or
investing in human resource is their investment for the customer interface.
Comparative Analysis of British Airways and KLM Royal
Dutch Airways
To analysis the financial position of the any company one needs to understand the sales, revenue
and the cash in hand of the company. The values directly sometimes not very clear so to

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Report on Analysis of the Financial Reports British Airways vs. KLM
understand the position of the company we use ratio analysis. There are many ratios which
compares the value of the financial data given to conclude the position of the company at the end
of the year. Generally 5 years of gap is considered to understand the comparison. The analysis is
limited to the financial data available in the annual report.
Profitability Ratios
This data helps the investor to understand the profitability and liquidity of the company. It
evaluates the profitability of the company how good it is in converting the sales in to the income.
Ratios used are return on equity, return on assets, gross profit margin, net profit margin.
Return on Equity Ratio (ROE)
The ratio computes the profitability of the company how much a company is going to return to
the investors.
2017 2016 2015 2014 2013
-500.0%
0.0%
500.0%
1000.0%
1500.0%
2000.0%
2500.0%
3000.0%
3500.0%
4000.0%
4500.0%
12.2% 11.5% 26.9% 9.2% 3.9%
-75.8% 52.5% 13.6%
3788.9%
8.3%
Retrun on Equity (ROE)
British Airways KLM Royal Dutch
The British airways has decreased its return in the year 2017 although the revenue has increased
by 7%. Even the operating profit of British airways has increased by 19% recorded at 1,680 £
million as compared to 1,413 £ million in previous year. There was an increase of 1% in the
return ratio.
During the year 2017, the KLM royal Dutch’s Company registered total revenue of EUR 10,340
million as compared to EUR 9,800 million in previous year. The total revenue increased by 5 %
in 2017. Earning Before Interest Depreciation and Taxes (EBITDA) of the Company has
increased by 25% and was recorded at EUR 1,496 million as compared to EUR 1,189 million in

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Report on Analysis of the Financial Reports British Airways vs. KLM
previous year. Income from operating activities has however, reduced drastically to (-) EUR 939
as compared to that of last year EUR 684 million. This has impacted the ratio to fall from 54% to
-75.84%. But in 3014 the shareholder equity was so low that the ROE shows to be very high.
Return of Assets (ROA)
It shows how profitable is the company in comparison to the asset. It explains how well the
company is going to be using the asset in comparison the sales the company is generating.
2017 2016 2015 2014 2013
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
10.2% 9.2%
16.1%
18.2%
2.1%
16.8%
13.2%
10.4%
8.6%
3.1%
Return of Asset {ROA)
British Airways KLM Royal Dutch
The graph here represents ROA for both the company. British Airways has shown a decrease of
the ROA chart from the past performance. The 2017 ROA is 10.17% and 2016 it was 9.17% but
if seen for 2015 it is noted that the company was doing well. Operating profit is constantly
increasing which is 14%, 12% and 11% in 2017, 2016 and 2015 respectively. The Company
managed to reduce its Finance cost which is 106 £ million as compared to 145 £ million in the
previous year. Also the Finance income of 35 £ million has been achieved which was (-) 147 £
million in 2015.
For KLM Royal Dutch Operating profit stood at (-) 9.80 % which does not provide a healthy
sign for the Company’s operation. The Company has been constantly managed to reduce its

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Report on Analysis of the Financial Reports British Airways vs. KLM
Finance cost which is EUR 91 million, EUR 145 million and EUR 114 million in the year 2017,
2016 and 2015 respectively. Net Profit for the year has decreased to (-) EUR 703 million as
compared to EUR 519 million. Although the company shows a positive ROA as it is increasing
year on year from 3% to 16 %.
Net Profit Margin
It tells about the financial health of the company. It tell how much does the company is making
profit on each penny of sales done. It tell how beneficial a company is on how much the
company is active in converting the sales revenue in to the profit.
2017 2016 2015 2014 2013
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
11.5% 11.8%
22.1%
6.0%
2.5%
-6.8%
5.3%
0.5%
3.5%
1.4%
Net proit margin
British Airways KLM Royal Dutch
Analyzing the data of British Airways there is decrease in the Net profit margin from 2015.
Whereas same trend is seen for KLM royal Dutch. It has increased in 2016 and decreased to
negative digit in 2017. Profit after Tax (PAT) is at 1,403 £ million as compared to 1,345 £
million which is 4 % higher than that of last year. However, the PAT is 44% less as compared to
the year 2015 which is mainly due to sale of financial assets amounting to Rs.1,502 £ million in
2015. The Net profit margin stood at 11.48% in 2017. Company is moving up wards to give
return to its investors.
Whereas for KLM Royal Dutch Net Profit for the year has decreased to (-) EUR 703 million as
compared to EUR 519 million. Further Net profit of the Company in the year 2015 was at EUR

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Report on Analysis of the Financial Reports British Airways vs. KLM
54 million. It shows that the Company has inconsistent profitability / operation over years. The
Net profit margin stood at (-)6.58% in 2017 which is not a good sign of operations of the
Company. Earning per share stood at (-) EUR 15.04 million as compared to EUR 11.03 million
in 2016.
P/E = Stock Price Per Share / Earnings Per Share
The formula is stock price of the company share by the earning per share that the company is
paying back. It calculates the market value of a stock to its earning by valuing the market price
per share by the earnings per share. In simple price earnings ratio shows what the market will be
paying for a stock on its current earning.
2017 2016 2015 2014 2013
-1000.0
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
637.2
253.5 111.1 400.1
915.6
-444.2
490.5
3969.3
919.0
2428.5
P/E Rati o
British Airways KLM Royal Dutch
The P/E ratio of British Airways is increasing from year 2015 from 15.03 to 86.19. The higher
the P/E ratio means that the company is having a growth stock. This indicates a positive future
performance. It can be risky also because it can be an over value stock value.
Whereas the KLM royal Dutch shows that the P/E ratio is decreasing from year 2015 to 2017
from 79.71 to 8.97. A low P/E ratio means that it is a value stock because they are trading lower
from their fundamental and investors invests here before the market corrects.
PCF ratio = market price per share / cash flow per share

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Report on Analysis of the Financial Reports British Airways vs. KLM
2017 2016 2015 2014 2013
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
451.3
244.5 260.0 211.0 247.9
253.9 252.8 299.4
701.1
550.2
Price to Cash-Flow
(P/CF)
British Airways KLM Royal Dutch
It is a ratio which measures how much the company pays its investors for 1 rupee of the cash
flow. Both cash flow and earning of the company is closely related. Generally it is seen that the
cash flow and earning closely follow each other. The ratio can be examined and it is seen that the
highest P/CF ratio is for year 2014 for KLM Royal Dutch and the ratio has come down till now.
The cash flow was low for year 2014 which has raised the ratio.
Trend for British Airways the chart is rising from the previous years. This trend is common if the
cash flow and the earning is going hand in hand. In same ratio. The cash flow ratio can be seen to
be 451.3 which is also a good sign that the company is performing good.
Liquidity Ratio:
This ratio is useful in comparison format. This is a ratio where the company’s ability to pay its
current liability. And also the long term liability as they may become the current soon. The
current asset tell how much the company is having to meet it current liability.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Current Ratio
2017 2016 2015 2014 2013
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
3.0 3.1
2.3
2.1 2.0
0.7 0.7 0.6 0.5 0.7
Current rati o
British Airways KLM Royal Dutch
The British Airways has increased current ratio the asset has increased in comparison to the
liability. The current ratio is 3.04 and the change form 2016 is not much for British Airways.
During the year 2017, the non-current assets has reduced to 12,810 as compared to 13,173 in the
previous year. The current assets of the Company has increased to 2,726 £ million as compared
to 2,428 £ million in the previous year.
KLM in the year 2017, property, plant and equipment increased from EUR 4,319 million as
compared to EUR 3,783 million which is 14% higher. It reflects that the Company is investing
into its fixed assets and positive for its long term growth. During the year the Trade and other
receivables has increased to EUR 1,228 million from EUR 964 million which is 27% higher.
There is not much change in the graph as well.
Quick / Acid Test Ratio
This ratio is used to assess the liquidity status of the firm. How much of liquid asset it has that
can give a whole health of the company.

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Report on Analysis of the Financial Reports British Airways vs. KLM
2017 2016 2015 2014 2013
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.68
0.60
0.39
0.47
0.36
0.61 0.63
0.46 0.46
0.60
Acid test rati o
British Airways KLM Royal Dutch
Both the have similar current acid test ratios. This is a closer trend in these industries. The
British Airways has increased It’s acid ratio and same ways the trend for KLM Royal Dutch
goes. The companies are doing well they have adequate amount of current asset for immediate
liquidation. The ratio is closer and had less changes from 2016 to 2017.
Gearing Ratios
Here is seen how much the company’s asset has been supported by the debt. Any part of ratio
showing more than 100% that the company has more debt than the asset. If the company has
more debt than the asset than it becomes clear for investors to judge the risk level.
Debt to Equity Ratio
It determines the how much the company is surviving on the debt. How much the asset is
financed by the debt. This ratio helps in determine the loan the investors can be given.

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2017 2016 2015 2014 2013
0.0
0.2
0.4
0.6
0.8
1.0
1.2
0.3 0.3
0.4 0.5 0.5
0.9 0.9 1.0 1.0
0.8
Debt rati o
British Airways KLM Royal Dutch
The debt for British airways is higher than the equity for 2017 and that was not the case in 2016
where the company was having more debt of 6985mn. The ratio changed by double the amount.
The financing cost decreased by £39 million as the company paid the related debt. The company
also gained 21 euro mn from then on operating sale and cash transition.
KLM capital structure changed due the net cost of financial debt reduced from EUR 100 million
to EUR 91 million, as a result of the reduction of net debt and lower interest rates. KLM’s ratio
for year 2014 was very high as 474.67.
Leverage Ratio
The asset/equity ratio is a relationship of the total assets of the firm to the part owned by
shareholders. This ratio is an indicator of the company’s debt used to finance the firm.

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Report on Analysis of the Financial Reports British Airways vs. KLM
2017 2016 2015 2014 2013
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1000.0
2.8 3.7 3.9 8.1 6.29.6 9.1 22.0
944.3
6.0
Asset-to-Equity Rati o
British Airways KLM Royal Dutch
It indicates the proportion of total asset financing of the company in terms of equity funded and
debt funded approach. A higher ratio is itself not good for the company and neither a lower ratio
as it does not indicates good financial prospective.
The higher the ratio indicates that the company is more of equity funded i.e. more burden of
profit sharing in form of dividend to shareholders. The lower ratio indicates more burden of
interest obligation on the company which is a charge against the profit.
Efficiency Ratios
Efficiency ratio is a ratio between the assets and liabilities of a company and how is it being
used. The calculation uses the value of inventory, repayment of liabilities, usage of equity, and
turnover of receivables. The most commonly used efficiency ratios are fixed assets turnover,
assets turnover, inventories turnover, day’s inventories.
Fixed Assets Turnover
It is turnover ratio telling how efficiently the company is producing sales with the assets of the
company. The Plant, equipment and property is how efficiently paying back to the company.

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2017 2016 2015 2014 2013
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0.7 0.7 0.7
0.8 0.8
1.2 1.1 1.1 1.1
1.0
Fixed asset turnover
British Airways KLM Royal Dutch
The ratio are less than one for British Airways. This indicates that the company has more asset
and the sale revenue is not much as affected by the sales.
The KLM Royal Dutch has ratio higher than one it is producing more the sales covering the year
on year cost of the asset.
Cash Flow Margin for Operation
The cash flow margin measures how efficiently a company converts its sales dollars to cash. It's
also a margin ratio. The higher the percentage, the more cash is available from sales.
Cash flows Margin for operating = Cash Flow from Operations / Net Sales
2017 2016 2015 2014 2013
0.0
0.1
0.2
0.2
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.0
0.1
Cash Flow Margin for operati on
British Airways KLM Royal Dutch

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Report on Analysis of the Financial Reports British Airways vs. KLM
Both companies are having good amount of Cash from operating operations to be around
1,981mn for British Airways and 1230 mn for KLM royal Dutch. The ratio are less than one
which is equally good as the company is doing more sales and generating more sales revenue.
Activity Ratio
The activity ratio measures how well is the company performing. It is also called the Assets
management ratio. How well the company is doing in producing the revenue from the asset.
Creditors Payment Period = Trade creditors / credit purchases Number of days)
2017 2016 2015 2014 2013
0.0
1000.0
2000.0
3000.0
4000.0
5000.0
6000.0
996.5 1086.5
3217.4
4516.1
5008.8
2977.6 2949.9
3893.9
4268.3 4520.2
Creditors payment period (CPP)
British Airways KLM Royal Dutch
Creditors Payment Period indicates the time (in days) in which the current liabilities is
outstanding. The ratios are very high after the calculation. The company is showing a stable
trend when analyses the difference over the period of year is not very high. The company gets a
good amount of time to pay its payable.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Price to cash flow ratio:
2017 2016 2015 2014 2013
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
0.25 0.18 0.24 0.21 0.31
1.87 1.70
2.07
4.58
3.08
Price to cash fl ow rati o
British Airways KLM Royal Dutch
According to the above figure, it could be seen that the price to cash flow ratio has been higher
for KLM Royal Dutch and this implies that the stock price of the organization is costlier for the
investors.
Conclusion
The analysis gives a very strong picture that both the companies are faring well in this
competitive market and have a strong asset based. The expenditure on the customer based
services are well received by the customer. As the company is making a good profit year on year.
Being a listed company both the companies are following the accounting standards and no
discrepancy was found.
Both the company has fared well from the financial crisis of 2008 and other crisis of fuel price
increasing etc. Both the companies are doing excellent business if seen over the period of 5
years. Although KLM is giving negative revenue for year 2017. The company has done a good
business if other factors are considered. The dividend paid to the investors are also in good
amount in comparison to the industry competitors and the investors can rely on performance of
the company.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Reference
Anum, F., 2018. ANALYSIS FACTORS OF AFFECTING CAPITAL STRUCTURE WITH
FIRM SIZE AS MODERATING VARIABLE IN CONSUMER GOODS COMPANIES
LISTED ON BEI. International Journal of Public Budgeting, Accounting and Finance, 1(2).
Assetratio (2019). Fixed Asset Turnover Ratio Formula | Example | Calculation Explanation.
[online] My Accounting Course. Available at: https://www.myaccountingcourse.com/financial-
ratios/fixed-asset-turnover [Accessed 23 Feb. 2019].
Baxter, G., 2019. Capturing and Delivering Value in the Trans-Atlantic Air Travel Market: The
Case of the Air France-KLM, Delta Air Lines, and Virgin Atlantic Airways Strategic Joint
Venture. MAD-Magazine of Aviation Development, 7(1), p.17-37.

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Report on Analysis of the Financial Reports British Airways vs. KLM
Beck, A.C., Campbell, D. and Shrives, P.J., 2010. Content analysis in environmental reporting
research: Enrichment and rehearsal of the method in a British–German context. The British
Accounting Review, 42(3), p.207-222.
Burghouwt, G., 2016. Airline network development in Europe and its implications for airport
planning. Routledge.
Cashflow (2019). The Formula for Calculating a Company's Cash Flow Margin. [online] The
Balance Small Business. Available at: https://www.thebalancesmb.com/what-is-the-cash-flow-
margin-393192 [Accessed 23 Feb. 2019].
Chang, Y.C., Lee, W.H. and Wu, C.H., 2019. Airline new route selection using compromise
programming-The case of Taiwan-Europe. Journal of Air Transport Management, 76, p.10-20.
Gudmundsson, S.V., 2014. Mergers vs. Alliances: The Air France-KLM Story. Alliances: The
Air France-KLM Story.
IAG (2019). IAG - International Airlines Group - Annual Reports. [online] Iairgroup.com.
Available at: http://www.iairgroup.com/phoenix.zhtml?c=240949&p=irol-reportsannual
[Accessed 23 Feb. 2019].

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Kuran, M.F. and Novak, A., 2018. Brief Economic Analysis and Comparison of Turkish
Airlines, Lufthansa Group, Air France–KLM. AUTOBUSY–Technika, Eksploatacja,
SystemyTransportowe, 19(6), p.888-893.
Lange, K., Geppert, M., Saka‐Helmhout, A. and Becker‐Ritterspach, F., 2015. Changing
business models and employee representation in the airline industry: A comparison of British
Airways and Deutsche Lufthansa. British Journal of Management, 26(3), pp.388-407.
Mak, B.L., Chan, W.W., Wong, K. and Zheng, C., 2007. Comparative studies of standalone
environmental reports–European and Asian airlines. Transportation Research Part D: Transport
and Environment, 12(1), p.45-52.
Mills, A.J., 1995. Man/aging subjectivity, silencing diversity: Organizational imagery in the
airline industry. The case of British Airways. Organization, 2(2), p.243-269.
Ratio Analysis (2019). Ratio Analysis. [online] Zenwealth.com. Available at:
http://www.zenwealth.com/businessfinanceonline/RA/RatioAnalysis.html [Accessed 23 Feb.
2019].

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Report on Analysis of the Financial Reports British Airways vs. KLM
Appendix 1
1.1 Ratio analysis

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Report on Analysis of the Financial Reports British Airways vs. KLM
Britsih Airways KLM Royal Dutch
2017 2016 2015 2014 2013 2017 2016 2015 2014 2013
profitability
ratio
Retrun on Equity
(ROE) Net Income 1,403 1,345 2508 702 281 (703) 519 54 341 133
Total Asset 17,151 17,347 16,280 14,451 14,031 8924 9028 8725 8499 9609
Net income/
Shareholder's
Equity
Total liabilty 5,633 5,674 6,971 6,831 6,917 7997 8040 8329 8490 7998
Shareholder 's Equity 11518 11673 9309 7620 7114 927 988 396 9 1611
0.121809342 0.11522316
5 0.269416694 0.09212598
4 0.039499578 -
0.758360302
0.52530364
4 0.136363636 37.8888888
9 0.082557418
Retrun on Equity (ROE) 12.18% 11.52% 26.94% 9.21% 3.95% -75.84% 52.53% 13.64% 3788.89% 8.26%
Return of Asset
{ROA) EBIT 1,744 1,590 2,628 2,628 300 1496 1189 911 731 301
Total Asset 17,151 17,347 16,280 14,451 14,031 8924 9028 8725 8499 9609
0.101685033 0.0916585 0.161425061 0.18185592
7 0.021381227 0.167637831 0.13170137
4 0.104412607 0.08601011
9 0.0313248
10.17% 9.17% 16.14% 18.19% 2.14% 16.76% 13.17% 10.44% 8.60% 3.13%
Net proit margin Net profits (PAT) 1,403 1,345 2,508 702 281 (703) 519 54 341 133
Net sale ( revenue) 12,226 11,398 11,333 11,719 11,421 10340 9800 9905 9643 9688
0.114755439 0.11800315
8 0.221300626 0.05990272
2 0.0246038 -
0.067988395
0.05295918
4 0.005451792 0.03536243
9 0.013728324
11.48% 11.80% 22.13% 5.99% 2.46% -6.80% 5.30% 0.55% 3.54% 1.37%
P/E Ratio Market price per share 417 159 130 131 120 66.71 54.38 45.79 66.95 69
earning per share 0.654384328 0.62733209 1.169776119 0.32742537
3 0.131063433 -
0.150182551
0.11087445
8 0.011536071 0.07284815
1 0.028412915
637.24 253.45 111.13 400.09 915.59 -444.19 490.46 3969.29 919.03 2428.47
Price to Cash-
Flow
(P/CF) Price per share 417 159 130 131 120 66.71 54.38 45.79 66.95 69
(Cash flow / Shares outstanding) 0.923973881
0.65018656
7 0.5
0.62080223
9 0.484141791 0.262766056
0.21512635
7 0.152959753 0.09549303 0.125401362
451.3114589
244.545193
7 260
211.017280
2 247.8612717 253.8760179
252.781671
5 299.3597929
701.098288
2 550.2332591
Liquidity
Ratios
Current ratio Current Assets 17,151 17,347 16,280 14,451 14,031 2862 2617 2321 2314 2418
Current Liabilities 5,633 5,674 6,971 6,831 6,917 4037 3737 4001 4218 3443
3.04 3.06 2.34 2.12 2.03 0.71 0.70 0.58 0.55 0.70
Quick ratio
Quick Asset(Cash and Equivalents +
Marketable Securities + Accounts
Receivable) 3814 3391 2715 3185 2497 2463 2365 1846 1927 2050
Current Liabilities 5,633 5,674 6,971 6831 6917 4037 3737 4001 4218 3443
0.677081484 0.59763835 0.389470664
0.46625677
1 0.360994651 0.610106515
0.63286058
3 0.461384654
0.45685158
8 0.595410979

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Report on Analysis of the Financial Reports British Airways vs. KLM
levearge
ratio
Debt ratio Total Liability 5,633 5,674 6,971 6,831 6,917 7997 8040 8329 8490 7998
Total Asset 17,151 17,347 16,280 14,451 14,031 8924 9028 8725 8499 9609
0.33
0.32708825
7 0.428194103
0.47270085
1 0.49297983 0.896122815
0.89056269
4 0.954613181
0.99894105
2 0.832344677
Debt-Equity ratio Total Debt 5,306 6,985 5,108 5825 4849 3960 4303 4328 4272 4555
Shareholders’ Equity 6,212 4,688 4,201 1795 2265 927 988 396 9 1611
0.854153252
1.48997440
3 1.215900976
3.24512534
8 2.140838852 4.27184466
4.35526315
8 10.92929293
474.666666
7 2.827436375
Asset-to-Equity
Ratio Total Assets 17,151 17,347 16,280 14451 14031 8924 9028 8725 8499 9609
Total Equity 6,212 4,688 4,201 1795 2265 927 988 396 9 1611
2.760946555
3.70029863
5 3.875267793
8.05069637
9 6.194701987 9.626752967
9.13765182
2 22.03282828
944.333333
3 5.96461825
Efficiency
ratios
Fixed asset
turnover Net sales 12,226 11,398 11,333 11719 11421 10340 9800 9905 9643 9688
Total Asset 17,151 17,347 16,280 14451 14031 8924 9028 8725 8499 9609
0.712844732
0.65705885
7 0.696130221
0.81094733
9 0.813983323 1.158673241
1.08551174
1 1.135243553
1.13460407
1 1.008221459
Cash Flow
Margin
Cash Flow
Margin for
operation
Cash from Operations
1,981 1,394 1,072 1331 1038 1230 1007 716 447 587
Sales 12,226 11,398 11,333 11719 11421 10340 9800 9905 9643 9688
0.162031736
0.12230215
8 0.094591017
0.11357624
4 0.090885211 0.118955513
0.10275510
2 0.072286724
0.04635486
9 0.060590421
Cash Flow
Margin for
Financing
Cash from Financing
(1,204) (345) (335) 664 491 (439) (178) -413 -275 -322
Sales 12,226 11,398 11,333 11719 11421 10340 9800 9905 9643 9688
-
0.098478652
-
0.03026846
8
-
0.029559693
0.05666012
5 0.042990982 -0.04245648
-
0.01816326
5
-
0.041696113
-
0.02851809
6
-
0.033236994
Cash Flow
Margin for
Investing
Cash from Investing
(855) (819) (585) -1974 -1429 (985) (582) -347 -375 -547
Sales 12,226 11,398 11,333 11719 11421 10340 9800 9905 9643 9688
-0.06993293
-
0.07185471
1
-
0.051619165
-
0.16844440
7
-
0.125120392
-
0.095261122
-
0.05938775
5
-
0.035032812
-
0.03888831
3
-
0.056461602
Activity ratio
Creditors
payment period
(CPP)
accounts payable (trade and
payable) 2,245 2,167 5,559 5,595 6,414 2,167 1,983 2,120 2,229 2,122
(total annual purchases / 360) 2.25 1.99 1.73 1.24 1.28 0.728 0.672 0.544 0.522 0.469
996.55 1086.52 3217.43 4516.14 5008.76 2977.557252
2949.91735
5 3893.877551
4268.29787
2 4520.236686

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Report on Analysis of the Financial Reports British Airways vs. KLM
Cash Flow
Ratio
Price to cash flow Number of shares (in million) 2.14 2.14 2.14 2.14 2.14 3,146 3,156 3,160 3,917 4,112
Market value per share
$
118.54
$
115.52
$
131.77
$
147.80
$
287.79 24.00 24.30 19.57 24.11 26.74
Operating cash flow per share
$
481.78
$
641.12
$
556.07
$
701.87
$
917.76 12.85 14.27 9.43 5.26 8.67
Market value per share/Operating
cash flow per share 0.25 0.18 0.24 0.21 0.31 1.87 1.70 2.07 4.58 3.08

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Report on Analysis of the Financial Reports British Airways vs. KLM
1.2 PNL statement of British Airways
Group consolidated income statement
For the year ended 31 December Group
£ million 2017 2016 2015 2014 2013
CONTINUING OPERATIONS
Passenger revenue 11,011 10,296 10,164 10,452 10,129
Cargo revenue 683 589 547 598 689
Traffic revenue 11,694 10,885 10,711 11,050 10,818
Other revenue 532 513 622 669 603
Total revenue 12,226 11,398 11,333 11,719 11,421
Employee costs 2,559 2,427 2,466 2,422 2,387
Restructuring - 4 27 39 5
Depreciation, amortisation and impairment 751 756 761 831 722
Aircraft operating lease costs 223 155 113 80 85
Fuel, oil costs and emission charges 2,537 2,457 3,031 3,515 3,755
Engineering and other aircraft costs 763 700 583 613 643
Landing fees and en route charges 930 869 792 787 790
Handling, catering and other operating costs 1,649 1,512 1,255 1,381 1,340
Selling costs 480 414 401 449 439
Currency differences (6) 88 46 37 28
Property, IT and other costs 566 519 594 590 576
Total expenditure on operations before exceptional items10,452 9,901 10,069 10,744 10,770
Operating profit before exceptional items 1,774 1,497 1,264 975 651
Exceptional items (94) (84) (25) 0 57
Operating profit after exceptional items 1,680 1,413 1,239 975 708
Finance costs (106) (145) -121 -141 13
Finance income 35 22 (147) 17 -45
(Loss)/profit on sale of property, plant and equipment and investments(6) 123 24 0 4
Net gain relating to available-for-sale financial assets 6 4 1,502 10 8
Share of post-tax profits in associates accounted for using the equity method165 147 149 39 -65
Realised losses on derivatives not qualifying for hedge accounting (9) (6) -37 -164
Unrealised gains on derivatives not qualifying for hedge accounting - 40 859 0 0
Net financing (charge)/credit relating to pensions (24) 10 (120) -3 0
Net currency retranslation credits/(charges) 3 (18) 702 -1 0
Profit before tax from continuing operations 1,744 1,590 2,628 2,628 300
Tax (297) (221) (120) -157 -16
Profit after tax from continuing operations 1,447 1,369 2,508 702 284
DISCONTINUED OPERATIONS 702 0 0
Loss after tax from discontinued operations (44) (24) 0 -3
Profit after tax 1,403 1,345 2,508 702 281
Attributable to:
Equity holders of the parent 1,385 1,329 2,493 686 264
Non-controlling interest 18 16 15 16 17
1,403 1,345 2,508 702 281

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Report on Analysis of the Financial Reports British Airways vs. KLM
1.2 Balance sheet Of British airways
As at 31 December
£ million 2017 2016 2015 2014 2013
Non-current assets
Property, plant and equipment:
Fleet 6,713 6,866 6,813 6,646 6,166
Property 751 748 765 769 776
Equipment 212 229 239 231 193
7,676 7,843 7,817 7,646 7,135
Intangibles:
Goodwill - - -
Landing rights 644 643 643 643 642
Emissions allowances 16 3 6 26 26
Software 281 284 270 216 147
941 930 919 885 815
Investments in subsidiaries 1,278 1,315 1,315 1,326 2,453
Investments in associates accounted for using the equity method1,563 1,563 1,563 0 0
Available-for-sale financial assets 40 40 40 48 17
Employee benefit assets 904 866 697 673 407
Deferred tax assets - 29 0 0
Derivative financial instruments 74 61 12 18 8
Other non-current assets 334 526 441 195 193
Total non-current assets 12,810 13,173 12,804 10,791 11,028
Current assets and receivables
Inventories 128 131 136 129 109
Trade receivables 751 693 527 516 522
Other current assets 527 783 760 470 496
Derivative financial instruments 209 139 60 72 84
Other current interest-bearing deposits 1,840 1,425 1,199 1,849 1,220
Cash and cash equivalents 886 1003 790 619 562
2,726 2,428 1,989 2,468 1,782
Assets held for sale
Total current assets and receivables 4,341 4,174 3,472 3,655 2,993
Total assets 17,151 17,347 16,280 14,451 14,031
Shareholders' equity
Issued share capital 290 290 290 290 290
Share premium 1,512 1,512 1,512 1,512 1,512
Other reserves 4,410 2,886 2,399 -7 463
Total shareholders' equity 6,212 4,688 4,201 1,795 2,265
Non-controlling interest - - -
Total equity 6,212 4,688 4,201 1,795 2,265
Non-current liabilities
Interest-bearing long-term borrowings 3,985 4,745 4,020 4,354 3,694
Employee benefit obligations 668 1,960 602 1,019 607
Deferred tax liabilities 280 - 193 0 112
Provisions for liabilities and charges 281 237 156 0 327
Derivative financial instruments 57 5 101 18 11
Other non-current liabilities 35 38 36 60 98
Total non-current liabilities 5,306 6,985 5,108 5,825 4,849
Current liabilities
Current portion of long-term borrowings 588 689 706 421 358
Trade and other payables 2,245 2,167 5,559 5,595 6,414
Deferred revenue on ticket sales 2,541 2,545 0 0 0
Derivative financial instruments 52 23 550 693 51
Current tax payable 101 46 29 26 0
Provisions for liabilities and charges 106 204 127 96 94
Liabilities directly associated with the assets held for sale - - 0 0 0
Total current liabilities 5,633 5,674 6,971 6,831 6,917
Total equity and liabilities 17,151 17,347 16,280 14,451 14,031
Balance sheets

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Report on Analysis of the Financial Reports British Airways vs. KLM
1.3 Cash Flow statement of British Airways.
Cash flow statements
For the year ended 31 December Company
£ million 2017 2016 2015 2014 2013
Cash flow from operating activities
Operating profit from continuing operations after exceptional items 1,601 1,339 1,176 910 661
Exceptional items 94 82 25 0 57
Operating profit before exceptional items from continuing operations 1,695 1,421 1,201 0 0
Operating loss from discontinued operations - - 0 0
1,695 1,421 910 718
Depreciation, amortisation and impairment 726 735 723 831 689
Employer contributions to defined benefit pension schemes (763) (729) 0 0
Defined benefit pension scheme service costs 201 157 -311 -302
Movement in working capital and other non-cash movements 411 78 (352) 53 96
Decrease/(increase) in trade and other receivables, prepayments, inventories and current assets277 (273) 0
Increase in trade and other payables, deferred revenue on ticket sales and current liabilities134 351 0
Payments related to restructuring (110) (59) 0
Interest paid (92) (130) (101) -94 -101
Interest received 20 25 23 21 14
Taxation (107) (104) (98) -22 -5
Net cash generated from operating activities 1,981 1,394 1,072 1,331 1038
Cash flow from investing activities 0
Purchase of property, plant and equipment and intangible assets (566) (1,746) (1,067) -1,470 -1,367
Investment in subsidiaries (37) (8) (7) -10 -87
Sale of property, plant and equipment and intangible assets 3 1,008 36 104 0
Dividends received 103 117 64 6 9
Loan repaid by fellow group undertaking 53 34 0 105
Other investing movements 4 3 8 4 -2
Increase in other current interest-bearing deposits (415) (227) -629 -104
Net cash used in investing activities (855) (819) (585) -1,974 -1,429
Cash flow from financing activities
Proceeds from long-term borrowings - 729 459 1,391 997
Repayments of borrowings (106) (327) (96) -147 -173
Repayment of finance leases (638) (396) (468) -580 -333
Dividends paid (460) (351) (259) 0 0
Distributions made to holders of perpetual securities - - - 0
Net cash flow from financing activities (1,204) (345) (335) 664 491
(Decrease)/increase in cash and cash equivalents (78) 230 21 100
Net foreign exchange differences (39) (17) 19 36 43
Cash and cash equivalents at 1 January 1,003 790 619 562 419
Cash and cash equivalents as at 31 December 886 1,003 790 619 562

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Report on Analysis of the Financial Reports British Airways vs. KLM
Appendix 2
2.1 PNL statement of KLM Royal Dutch
KLM Royal Dutch Airlines Consolidated statement of profit or loss
In millions of Euros 2017 2016 2015 2014 2013
Revenues 10,340 9,800 9,905 9,643 9,688
Expenses
External expenses (5,523) (5,519) -6164 -6,042 -6,337
Employee compensation and benefit expenses (2,955) (2,860) -2774 -2,645 -2,404
Other income and expenses 77 182 298 58 -139
Total expenses (8,401) (8,197) -8640 -8,629 -9,387
EBITDAR 1,939 1,603 1265 1,014 301
Aircraft operating lease costs (443) (414) -354 -283 0
EBITDA 1,496 1,189 911 731 301
Amortisation, depreciation and movements in provisions (586) (508) -527 -556 -507
Income from current operations 910 681 384 175 301
Other non-current income and expenses (1,849) 3 71 676 -51
Income from operating activities (939) 684 455 851 250
Gross cost of financial debt (102) (116) -135 -145 -157
Income from cash and cash equivalents 11 16 21 29 30
Net cost of financial debt (91) (100) -114 -116 -127
Other financial income and expenses 78 1 -208 -92 68
Pre-tax income (952) 585 133 643 191
Income tax benefit/(expense) 239 (69) -42 -253 -48
Net result after taxation of consolidated companies (713) 516 91 390 143
Share of results of equity shareholdings 10 3 -37 -49 -10
(Loss) / profit for the year (703) 519 54 341 133
Attributable to:
Equity holders of the Company (704) 517 53 340 132
Non-controlling interests 1 2 1 1 1
(703) 519 54 341 133
Net (loss) / profit attributable to equity holders of the Company(704) 517 53 340 132
Dividend on priority shares
Net (loss) / profit available for holders of ordinary shares(704) 517 53 340 132
Average number of ordinary shares outstanding 4,68,09,699 4,68,09,699 46809699 4,68,09,699 4,68,09,699
Average number of ordinary shares outstanding (fully diluted)4,68,09,699 4,68,09,699 46809699 4,68,09,699 4,68,09,699
(Loss)/profit per share (in EUR) (15.04) 11.03 1.14 7.26 2.82
Diluted (loss)/profit per share (in EUR) (15.04) 11.03 1.14 7.26 2.82

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Report on Analysis of the Financial Reports British Airways vs. KLM
2.2Balance statement of KLM Royal Dutch
Balance sheet
December
31, 2017
December
31, 2016 31-Dec-15 2014 2013
ASSETS
Non-current assets
Property, plant and equipment 4,319 3,783 3526 3,672 3,999
Intangible assets 394 343 308 292 254
Investments accounted for using the
equity method 24 22 24 58 105
Other non-current assets 186 317 282 215 108
Other financial assets 404 365 277 174 210
Deferred income tax assets 145 119 214 365 61
Pension assets 590 1,462 1773 1,409 2,454
6,062 6,411 6,404 6,185 7,191
Current assets
Other current assets 229 224 281 127 121
Other financial assets 170 28 194 260 247
Inventories 177 193 161 193 202
Trade and other receivables 1,228 964 845 896 872
Cash and cash equivalents 1,058 1,208 840 838 976
2,862 2,617 2,321 2,314 2,418
TOTAL ASSETS 8,924 9,028 8,725 8,499 9,609
EQUITY
Capital and reserves
Share capital 94 94 94 94 94
Share premium 474 474 474 474 474
Other reserves (336) (2,191) -2305 -2,662 -736
Retained earnings 694 2,610 2129 2,099 1,776
Total attributable to Company's
equity holders 926 987 392 5 1,608
Non-controlling interests 1 1 4 4 3
Total equity 927 988 396 9 1,611
LIABILITIES
Non-current liabilities
Loans from parent company 198 288 288 288 491
Finance lease obligations 1,181 1,365 1481 1,429 1,683
Other non-current liabilities 216 171 267 301 167
Other financial liabilities 1,113 1,208 1184 1,182 1,077
Deferred income 207 204 162 145 158
Provisions for employee benefits 423 474 399 401 389
Other provisions 622 593 547 526 506
3,960 4,303 4,328 4,272 4,555
Current liabilities
Trade and other payables 2,167 1,983 1750 1,785 1,805
Finance lease obligations 355 395 209 341 263
Other current liabilities 112 66 632 529 68
Other financial liabilities 33 85 105 212 344
Deferred income 1,133 1,017 922 897 875
Provisions for employee benefits 100 28 32 42 45
Other provisions 137 163 351 179 43
4,037 3,737 4001 4,218 3,443
Total liabilities 7,997 8,040 8,329 8,490 7,998
TOTAL EQUITY AND LIABILITIES 8,924 9,028 8725 8,499 9,609

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Report on Analysis of the Financial Reports British Airways vs. KLM
2.3Cash flow statement of KLM Royal Dutch
KLM Royal Dutch Airlines consolidated cash flow statement
In millions of Euros 2017 2016 2015 2014 2013
(Loss)/profit for the year (703) 519 54 341 133
Depreciation and amortisation 532 516 511 539 507
Changes in provisions 54 (7) 16 17 43
Results of equity shareholdings (10) (3) 37 49 10
Result on sale of equity shareholdings (30) (3)
Changes in pension assets (33) (23) -18 -143 -103
Changes in deferred income tax (239) 69 42 253 49
Other changes * 1,659 (61) 74 -609 -52
Net cash flow from operating activities before changes in workingcapital1,230 1,007 716 447 587
(Increase) / decrease in inventories 14 (43) 43 2 -4
(Increase) / decrease in trade receivables (160) (98) 24 -11 7
Increase / (decrease) in trade payables 43 49 -84 2 151
(Increase) / decrease in other receivables and other payables 158 218 49 63 -115
Change in working capital requirement 55 126 32 56
Net cash flow from operating activities 1,285 1,133 748 503 626
Capital expenditure on intangible fixed assets (118) (93) -73 -72 -68
Capital expenditure on aircraft (784) (734) -378 -353 -429
Disposal of aircraft 51 91 29 50 161
Capital expenditure on other tangible fixed assets (94) (54) -63 -55 -39
Disposal of other (in-)tangible fixed assets 7 15 144 9 11
Sale of equity shareholdings 6 14 0 0 0
Dividends received 7 5 1 1 1
(Increase) / decrease in short-term deposits and commercial paper(60) 174 -7 45 -184
Net cash flow used in investing activities (985) (582) -347 -375 -547
Increase in long-term debt 425 318 490 343 207
Decrease in long-term debt (765) (412) -943 -624 -531
Increase in long-term receivables (113) (107) -45 -6 -57
Decrease in long-term receivables 32 24 86 20 60
Dividend paid (18) (1) -1 -8 -1
Net cash flow used in financing activities (439) (178) -413 -275 -322
Effect of exchange rates on cash and cash equivalents (11) (5) 14 9 -16
Change in cash and cash equivalents (150) 368 2 -138 -259
Cash and cash equivalents at beginning of period 1,208 840 838 976 1,235
Cash and cash equivalents at end of period ** 1,058 1,208 840 838 976
Change in cash and cash equivalents (150) 368 2 -138 -259