Comparative Financial Performance Analysis of Major Airlines

This assignment provides a detailed examination of the financial metrics for major airlines: West Jet, Air Canada, Delta, and Southwest Airlines. It encompasses various measures such as earnings per share, price-earnings ratio, cash flow per share, market-to-book ratio, and more to assess profitability, market valuation, and overall financial health. The analysis includes an evaluation of quarterly and annual earnings forecasts, alongside a comparison against industry averages. Through this comprehensive analysis, the assignment aims to identify key strengths and weaknesses within each airline's financial performance, offering insights into their competitive positioning in the industry.

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note:

1FINANCE
Table of Contents
Exhibit 1:.........................................................................................................................................2
Exhibit 2:.........................................................................................................................................2
Exhibit 3:.........................................................................................................................................2
Exhibit 4:.........................................................................................................................................3
Exhibit 5:.........................................................................................................................................3
Bibliography:...................................................................................................................................4

2FINANCE
Exhibit 1:
Measure West Jet Air
Canada
Delta Southwest
Airlines
Industry
Average
Earnings per share 3.27 3.04 4.99 3.27
Price earnings ratio 10.22 3.38 9.81 15.31 5.57
Cash flow per share 4.26 2.21 6.06 9.39 4.02
Market-to-book ratio 1.32 2.03 2.49 3.61 1.67
Dividend payout ratio 22.50 0.00 18.22 13.51 11.48
Dividend Yield 2.22 0.00 2.50 0.93 0.96
Gross profit margin 0.62 0.46 0.54 0.69 0.35
Operating margin 0.10 0.07 0.15 0.17 0.05
Net profit margin 0.07 0.12 0.09 0.10 0.02
Return on assets 0.05 0.12 0.07 0.09 0.00
Return on equity 0.14 1.16 0.27 0.25 -0.02
Debt to capital ratio 0.67 0.92 0.54 0.32 0.75
Debt to equity ratio 0.94 2.06 0.63 0.36 1.44
Current ratio 1.10 1.09 0.43 0.61 0.93
Exhibit 2:
West Jet Air
Canada
Delta Southwest
Airlines
Current price 26.33 26.31 52.2 56.95
52-week high/low 20.52 -
28.00
11.60 -
28.70
40.05 -
55.75
36.91 - 64.39
Beta 0.73 1.24 1.32
Market Capitalization 3.05B 7.14B 37.19B 34.08B
Exhibit 3:
West Jet Air
Canada
Delta Southwest
Airlines
Strong Buy 0 9 8 0
Buy 0 4 10 9
Hold 13 4 0 3

3FINANCE
Under perform 3 0 0 0
Sell 0 0 0 0
Exhibit 4:
Quarterly
Earnings Forecast
RQ-3 RQ-2 RQ-1 Recent
Quarter
(RQ)
RQ+1 RQ+
2
RQ+
3
RQ+
4
West Jet 0.47 0.4 0.39 1.18 0.44 0.6
Air Canada -0.23 -0.12 0.99 6.45 0.22 -0.04
Delta 0.85 0.82 1.67 1.64 1.03 0.89
Southwest Airlines 0.85 0.57 1.23 0.84 0.82 0.82
Exhibit 5:
Annual Earnings
Forecast
RY-3 RY-2 RY-1 Recent
Year (RY)
RY+1 RY+2 RY+3 RY+4
West Jet 2.05 2.47 2.93 2.47 2.45 2.81
Air Canada 0.02 0.34 1.07 3.68 4.1 3.98
Delta 18.53 1.5 5.66 5.79 5.04 5.57
Southwest Airlines 1.13 1.75 3.31 3.55 3.56 4.46

4FINANCE
Bibliography:
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage
Learning.
Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A
decision tree approach. Expert Systems with Applications, 40(10), 3970-3983.
Jordan, B. (2014). Fundamentals of investments. McGraw-Hill Higher Education