Webjet Ltd: In-depth Financial Accounting Report and Ratio Analysis

This report provides a comprehensive financial analysis of Webjet Ltd, a digital travel services provider, focusing on profitability, liquidity, and solvency ratios over a five-year period. It includes a comparative analysis with Flight Centre Travel Group Ltd to benchmark Webjet's performance against a key competitor. The analysis incorporates key financial ratios, growth rates, and visual aids such as tables and graphs to illustrate the financial health and trends of both companies. The report assesses net profit margins, return on equity, return on assets, and return on invested capital to evaluate the companies' financial performance and identify areas for improvement. The findings offer insights into the financial standing of Webjet Ltd and its competitive positioning within the travel industry.

Running head: ACCOUNTING REPORT ANALYSIS
Accounting Report Analysis
Name of the Student:
Name of the University:
Author’s Note

1
ACCOUNTING REPORT ANALYSIS
Executive Summary
The main purpose of this assessment is to analyze the financial performance of Webjet ltd which
is engaged in providing digital travel services to the customers. The assessment considers the
profitability, liquidity and solvency ratios of the business for the purpose of analyzing the growth
and development of the business on the basis of the above mention criteria. The report also
includes comparative analysis of the performance of the business in relation to one of the close
competitors of Webjet ltd. The company which is taken is Flight Center Travel ltd. The analysis
will be comparative in nature in order to understand the performance of the Webjet in terms of
industry and competitors. The assessment also includes graphs and tables which are
appropriately shown and analyzed in the assessment.

2
ACCOUNTING REPORT ANALYSIS
Table of Contents
Introduction......................................................................................................................................3
Profitability Analysis.......................................................................................................................4
Liquidity Ratio...............................................................................................................................10
Solvency Analysis.........................................................................................................................15
Conclusion.....................................................................................................................................19
Reference.......................................................................................................................................20

3
ACCOUNTING REPORT ANALYSIS
Introduction
The main purpose of this assessment is to analyze the financial statements of Webjet
limited in order understand the performance of the business in the industry. The report will be
considering the financial report of the company for a period of five years in order to estimate the
growth in the business of Webjet ltd. The assessment shows computation of key financial ratios
and the same are to be analyzed in order to identify growth in areas which are related to
profitability, solvency and liquidity of the business. The report also considers a close competitor
of Webjet ltd on the basis of which comparative analysis is to be conducted in order to compare
performance of both businesses. The company which is selected for the assessment is Flight
Center Travel Group Ltd.
Webjet ltd is engaged in the business of digital business which provides travel services to
the customers. The company is known to be a leading company which provides online travel
services, both domestic and foreign travel services for the customers of the business. In addition
to this, the company also provide hotel accommodation bookings. Deals, cruise car (Annual
Reports - Webjet Limited., 2018). The company has its headquarters in Australia and also has
operations in other countries like New Zealand, North America and other countries.
On the other hand, Flight Center Travel Group Ltd is considered to be one of the largest
retail travel service outlets which has operations predominately in Australia. The specialty of the
company is the swift and smooth services which it provides to the customers. The company was
founded in 1982 and the company has its headquarters in Australia (Annual Reports - Flight
Centre Travel Group., 2018). The company has a turnover of 20 billion and also employs a
significant force in employee all around the area of operations of the business.
The report shows comparative analysis between the two companies which includes
computation of key financial ratios and the report will also be containing graphs and tables
showing the computation of ratios which can be used for the identifying how well the company
has performed over the last five years.

4
ACCOUNTING REPORT ANALYSIS
Profitability Analysis
The profitability of Webjet limited is carried out considering the financial information
which are available from the annual reports of the company for the past five years. The
profitability analysis determines the ability of the company to generate profits for the business.
The profitability analysis of the business is carried by computing significant ratios which are
associated with profitability of the business (Delen, Kuzey & Uyar, 2013). The analysis will be
showing profitability ratio analysis for Webjet ltd and Flight Center Travel limited separately
and then a comparative analysis for the same.
Analysis of Webjet Ltd
The significant profitability ratios which are computed in order to analyze the
performance of the business for a period of five years is shown in the table below:
Growth Rate
Particulars 2013 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Net Profit Margin
9.04
%
20.2
2%
14.9
7%
14.6
2%
26.3
1%
5.52
%
123.6
7%
-
25.9
6%
-
2.34
%
79.9
6%
-
79.0
2%
Return on Equity
14.0
6%
29.5
9%
23.0
7%
18.9
9%
28.5
0%
12.5
8%
110.4
6%
-
22.0
3%
-
17.6
9%
50.0
8%
-
55.8
6%
Return on Assets
7.01
%
14.6
1%
10.5
4%
7.65
%
12.0
4%
5.26
%
108.4
2%
-
27.8
6%
-
27.4
2%
57.3
9%
-
56.3
1%
Return on
Invested Capital
12.2
8%
28.7
6%
17.6
0%
14.3
3%
22.2
0%
10.9
5%
134.2
0%
-
38.8
0%
-
18.5
8%
54.9
2%
-
50.6
8%
The above table shows the computation of key financial ratios which are related profit
generating ability of a business and also to analyze whether the same has declined or improved
over the period of five years. In addition to the ratios which are shown in the above table,
appropriate growth is also demonstrated on year to year basis in order to understand the degree
of improvements which has taken place in the ratios (Al Karim & Alam, 2013). The significant

5
ACCOUNTING REPORT ANALYSIS
ratios which are computed in the above table are net profit margin, return on assets, return on
equity and return on investments of the business.
2014 2015 2016 2017 2018
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
Profitability Ratios
Net Profit Margin Return on Equity Return on Assets
Return on Invested Capital NP Growth ROE Growth
ROA Growth ROIC Growth
Figure 1: (Graph Showing significant profitability ratios of Webjet ltd)
Source: (Created by the Author)
The above graph which is shown above represents the profitability conditions of the
business and the trend lines represent the growth or decline in profitability of the business over
the period of five years. The net profit margin of the business which is shown in the above table
shows net profit margin of the business to be 5.52% which has tremendously fallen in
comparison to previous year analysis which is shown to be 26.31% The net profit margin of the
business is shown to be maximum in the year 2017 while the same is shown to be lower in 2016.

6
ACCOUNTING REPORT ANALYSIS
The analysis of 2018 results suggest that the management of the company needs to formulate a
strategy in order to improve the net profit margin of the business. The strategy of the business
can be to either go for sales maximization policy or cost reduction policy both of which have
direct impact on the profitability of the company. The return on equity and return on assets
which are shown in the table above are considered to financial indicators for a success of a
business. The return on equity represent the amount which the business can generate from the
use of equity capital in the business and similarly the return which the business can generate with
the application of the assets of the business (Heikal et al., 2014). The return on equity of the
business as per the table above is shown to be 12.58% which is much lower than the return on
equity which the business had generated in previous year. The return on equity of the business
needs to be improved in order to live up to the expectations of the shareholders of the company.
The return on assets if the business is shown to be 5.56% which was around 12% in 2017 which
is also not a positive sign for the business. The return on investments for the business is shown in
the table above which is also one of the financial indicators which is shown to have reduced
during the year. The overall analysis shows that the profitability of the business shows that in
2018 all the profitability indexes have fallen which signifies that the business is having difficult
in increasing the overall profitability of the business.
Analysis of Fight Center Travel Ltd
The profits which are generated by the business are used for the computation of key
financial ratios which are related to profit generating ability of the business. The table which is
shown below consist of significant financial ratios of the business.
Growth Rate
Particulars 2013 2014 2015 2016 2017 2018 2014 2015 2016 2017
201
8
Net Profit Margin
12.6
5%
9.37
%
10.8
6%
9.32
%
9.07
%
9.00
%
-
25.9
3%
15.9
0%
-
14.18
%
-
2.68
%
-
0.77
%
Return on Equity
26.1
3%
19.4
8%
21.6
7%
18.7
0%
16.3
0%
17.6
6%
-
25.4
5%
11.2
4%
-
13.71
%
-
12.83
%
8.34
%
Return on Assets 10.9
5%
8.65
%
9.87
%
8.45
%
7.45
%
7.97
%
-
21.0
14.1
0%
-
14.39
-
11.83
6.98
%

7
ACCOUNTING REPORT ANALYSIS
0% % %
Return on
Invested Capital
23.9
0%
18.7
3%
20.8
0%
18.0
9%
15.9
6%
17.1
4%
-
21.6
3%
11.0
5%
-
13.03
%
-
11.77
%
7.39
%
2014 2015 2016 2017 2018
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
-30.00%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
Profitability Ratios
Net Profit Margin Return on Equity Return on Assets Return on Invested Capital
NP Growth ROE Growth ROA Growth ROIC Growth
Figure 2: (Graph Showing significant profitability ratios of Flight Center Travel ltd)
Source: (Created by the Author)
The above table and chart shows analysis of the profitability o the business of both the
companies. The net profit margin of the business is shown to be 9% which has slightly fallen in
comparison to previous year. The estimate which was computed for previous year is shown to be
9.07%. The net profit margin of the business is shown to be more or less appropriate in
comparison to previous year analysis. The return on equity of the business is shown to be
26.13% which is the highest for the business in last five years and the same was achieved by the

8
ACCOUNTING REPORT ANALYSIS
business in 2013. The return on equity for the current year which is 2018 is shown to be 17.6%
which shows the estimate has increased significantly in comparison to previous year which
suggest that the management of the company is paying heeds to the interest of the shareholders
of the company. The return on assets of the business is shown to have improved as well in
comparison to previous year’s estimates which signifies that the company is in the right track
and the financial indicators displays a positive image (Muda, Shaharuddin & Embaya, 2013).
The return on invested capital o the business is also shown to have improved in comparison to
previous year figures which is good sign for the business. In an overall estimate it can be said
that the profitability position of the business of Flight Center Travel Ltd has improved
significantly in comparison to past years analysis and the same is a sign that the business is going
through a good phase of business cycle.
Comparative Analysis
The analysis of the profitability for both the companies are explained with the help of
tables and graphs which is shown above. The comparative analysis of the profitability of the
business aims to relate and compare the performance of Webjet ltd with performance of Flight
Center Travel Ltd. This will be help the management of Webjet ltd to get insights about the
positioning of the company in terms of close competitor of the business (Almazari, 2014). In
order to compare the performance of both the companies net profit margin is considered which is
the most important profitability ratio and the same is analyzed by the potential investors before
taking any investment decision for the business (Bhamorasathit & Katawandee, 2014). In order
to make a comparative study appropriately the following table and graphs are used for
demonstrating the changes in net profit margin for the companies.
Net Profit Margin
2013 2014 2015 2016 2017 2018
Flight Center Travel Limited 12.65% 9.37% 10.86% 9.32% 9.07% 9.00%
Webjet Limited 9.04% 20.22% 14.97% 14.62% 26.31% 5.52%

9
ACCOUNTING REPORT ANALYSIS
2013 2014 2015 2016 2017 2018
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Net Profi t Margin
Flight Center Travel Limited Webjet Limited
Figure 3: (Chart Showing Comparative analysis for both the companies)
Source: (Created by the Author)
The net profit margin for the business of Webjet ltd is shown to be 5.52% which is
significantly lower than the net profit margin of Flight Center Travel ltd for the year 2018. This
shows that the management of Flight Center Travel ltd had a better sales and distribution
structure and also an effective cost management policy of the business. The return on equity of
both the business which is shown with the help of the table which is initially provided. The
computation of return on equity of the business reveals that Flight Center Travel ltd has a better
structure than Webjet ltd. The return on assets of Flight Center Travel ltd is also to be better for
the year 2018. The return on investments which the management of the company receives is also
shown to be not much as compared to Flight Center Travel ltd. The overall comparison reveals
that the business of Flight Center Travel ltd is performing better than the business of Webjet. The
graph which is shown in figure 3, that the net profit margin of Webjet was much better when the
period which is to be consider is between 2013 to 2018. The comparison of net profit margin as
per the graph reveals that the profits of the business has significantly fallen in the year 2018 and
prior to 2018, the net profit margin of Webjet was much better than the net profit margin of
Flight Center Travel ltd.

10
ACCOUNTING REPORT ANALYSIS
Liquidity Ratio
The aspect of liquidity in business environment refers to the ability of a company to
effectively finance the obligations of the business which are current in nature. In order to access
the liquidity position of the two companies which are considered, key liquidity ratios are to be
computed and analyzed in order to determine whether the companies which is Webjet ltd and
Flight Center Travel ltd have strong liquidity positions or not (Ehiedu, 2014). The ratios which
are computed in order to determine the liquidity position of the business are current ratio and
quick ratio.
Analysis of Webjet Ltd
The liquidity position of Webjet ltd can be determined with the help of current and quick
ratio which are the most important measures for assessing the liquidity of a business during a
particular year. In order to compute the key ratios which are associated with liquidity of a
business a tabular computation along with a graph is shown below:
Growth Rate
Particulars 2013
201
4
201
5
201
6
201
7
201
8 2014 2015 2016 2017 2018
Current Ratio 1.27 1.59 1.34 1.05 1.46
0.9
3
25.20
%
-
15.72
%
-
21.64
%
39.05
%
-
36.30
%
Quick Ratio 1.2 1.46 1.27 1 1.37
0.9
1
21.67
%
-
13.01
%
-
21.26
%
37.00
%
-
33.58
%
interest
coverage
113.1
9
80.8
4
23.4
7
24.7
8
19.1
9
9.7
5
-
28.58
%
-
70.97
% 5.58%
-
22.56
%
-
49.19
%
The above table shows the presentation of current ratio and quick ratio which are
considered to be the most significant ratios which fall under liquidity category. The current ratio
of a business represents the ability of the business to meet the current obligations of the business
which are related to day to day operations of business (Babalola & Abiola, 2013). On the other
hand, quick ratio represents more liquid position of the business and only considers current

11
ACCOUNTING REPORT ANALYSIS
assets which are easily convertible to cash. The graph which is shown below shows the
fluctuations in current and quick ratio over a period of five years.
2014 2015 2016 2017 2018
0
10
20
30
40
50
60
70
80
90
-80.00%
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
Liquidity Ratio
Current Ratio Quick Ratio interest coverage
CR Growth QR Growth NIC Growth
\
Figure 4: (Graph Showing significant profitability ratios of Webjet ltd)
Source: (Created by the Author)
The graph which is provided above shows the changes in current ratio of the business
over the relevant period which is considered for analysis. The current ratio of the company is

12
ACCOUNTING REPORT ANALYSIS
shown to be 0.93 and the same was shown to be 1.46 in 2016. There is a significant fall in the
liquidity position of the business which is a matter of serious concern for the management of the
company. In many cases banks offer loans to the companies on the basis of the current ratio of
the business as the same provides a view for the liquidity of the business (Kajananthan &
Velnampy, 2014). The loans are only approved when the liquidity position of the business is
shown to be favorable. In the case of Webjet ltd, the liquidity as shown by current ratio has
declined below one which signifies that the current liabilities of the business are more than the
current assets of the business (Ogiela, 2013). The quick ratio of the business is shown to be 0.91
which has also declined. The best estimates for the company was for 2014 where current ratio
was estimated to be 1.59 and the quick ratio was 1.46. In an overall estimate, the current liquidity
status of Webjet ltd is shown to have declined as per the analysis which is shown above.
Analysis of Flight Center Travel ltd
The liquidity ratio for Flight Center Travel ltd has been calculated based on the financial
information which were available and the computation is shown in the table below and also
shown graphical representation of the liquidity ratio of the business.
Growth Rate
Particulars
201
3
201
4
201
5
201
6
201
7
201
8 2014 2015 2016 2017 2018
Current Ratio 1.39 1.5 1.48 1.44 1.43 1.45 7.91%
-
1.33%
-
2.70%
-
0.69
% 1.40%
Quick Ratio 1.35 1.47 1.45 1.41 1.37 1.38 8.89%
-
1.36%
-
2.76%
-
2.84
% 0.73%
Net Interest
Cover
12.0
8
10.8
2
15.0
3
13.0
6
12.4
2
15.2
5
-
10.43
%
38.91
%
-
13.11
%
-
4.90
%
22.79
%
The above table shows computation of current ratio, quick ratio and interest coverage
ratio for the business of Flight Center Travel ltd for a period of five years. The computation is
done in order to analyze the changes in liquidity position which takes place for the business of

13
ACCOUNTING REPORT ANALYSIS
Flight Center Travel ltd and also for the purpose of conducting a comparative analysis with the
business of Webjet ltd.
2014 2015 2016 2017 2018
0
2
4
6
8
10
12
14
16
18
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
Liquidity Ratio
Current Ratio Quick Ratio Net Interest Cover
CR Growth QR Growth NIC Growth
Figure 5: (Graph Showing significant Liquidity ratios of Flight Center Travel ltd)
Source: (Created by the Author)
The above graph shows the presentation of the liquidity ratios of the business in graph
form showing fluctuation in the estimate over the period of five years. The current ratio of the
business is shown to be 1.45 for the year 2018 and the same is shown to have significantly
improved in relation to previous year analysis. The current ratio of the business shows an
increasing trend from 2016 which is positive sign for the business. The quick ratio of the
business similarly is shown to have improved from previous year analysis which signifies that
the business is improving in terms of liquidity on year to year basis (Ogiela & Ogiela, 2015). The
interest coverage ratio of the business is also shown to have increased which suggest that the

14
ACCOUNTING REPORT ANALYSIS
management of Flight Center Travel ltd effectively takes care of the servicing of debts of the
business. The interest coverage for the year 2018 is shown to be highest in recent five years
analysis of the estimate.
Comparative Analysis
In order to understand the performance of Webjet ltd in terms of the market and
competitors, a comparative study is conducted between Webjet ltd and Flight Center Travel ltd,
which is one of the close competitors of Webjet ltd. The current ratio of both the companies are
considered to be the base point for preparing the graph and table which is shown below. This is
because current is an important indicator which helps businesses to determine the liquidity
positions effectively.
Current Ratio
2013 2014 2015 2016 2017 2018
Flight Center Travel Limited 1.39 1.5 1.48 1.44 1.43 1.45
Webjet Limited 1.27 1.59 1.34 1.05 1.46 0.93
2013 2014 2015 2016 2017 2018
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Current Rati o
Flight Center Travel Limited Webjet Limited
Figure 6: (Chart Showing Comparative analysis for both the companies)
Source: (Created by the Author)

15
ACCOUNTING REPORT ANALYSIS
The chart which is shown above is formed on the basis of the table which is shown
above. The liquidity graph for Webjet ltd which is represented by orange line is shown to be
mostly below the blue line which shows liquidity graph for Flight Center Travel ltd. The
liquidity of Webjet ltd is shown to be better in 2014 where it is more in comparison to Flight
Center Travel ltd. As per the results of 2018, the current ratio of Webjet ltd had significantly
fallen which is also represented in the graph shown above. In an overall estimation, it is clear
that the liquidity position of Flight Center Travel ltd is much better than Webjet ltd and the
management of Webjet ltd needs to improve the same as it is a matter of concern for the
management (Blankespoor, Miller & White, 2013).
Solvency Analysis
The solvency ratios of the business represent the capital structure and capital structure
related decisions of the business which are involved in a business. The solvency ratio which are
computed are shown for both the companies in tabular format and analyzed in a similar manner.
The ratios which are considered for solvency analysis are financial leverage, gross gearing, net
gearing as shown in the below paragraphs.
Analysis of Webjet Ltd
The solvency ratio of a business shows the capital which is used by the business for the
purpose of financing the day to day activities of the business. In the business of Webjet limited
the solvency of the business shows the different mixes of capital which is used by the business
that is equity capital and debt capital (Sahu & Charan, 2013). The below table shows the
solvency ratio computation and also a graph showing changes in the ratios over a period of five
years.
Growth Rate
Particulars 2013 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Financial
Leverage 2.2 1.86 2.46 2.49 2.28 2.45
-
15.45
%
32.2
6%
1.22
%
-
8.43
%
7.46
%
Gross
Gearing
86.9
6%
86.9
6%
146.3
4%
148.6
8%
127.7
8%
144.7
0%
0.00
%
68.2
9%
1.60
%
-
14.06
%
13.2
4%

16
ACCOUNTING REPORT ANALYSIS
Net Gearing
0.00
%
0.00
%
25.61
%
11.18
%
16.67
%
20.54
%
0.00
%
0.00
%
-
56.33
%
49.02
%
23.2
5%
2014 2015 2016 2017 2018
0
0.5
1
1.5
2
2.5
3
-80.00%
-60.00%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
Solvency Ratio
Financial Leverage Gross Gearing Net Gearing
GG Growth FL Growth NG Growth
Figure 7: (Graph Showing significant Solvency ratios of Webjet ltd)
Source: (Created by the Author)
The financial leverage of the business is shown to be 2.45 for the year which is more than
the results which is shown for previous year which implies that the management has increased
the level of debt which was used by the business in earlier instances (Soni & Saluja, 2013). The
use of debt capital in the business has increased tremendously from 2014 as shown in the table
and graph shown above (Liu et al.,2013). The gross gearing and net gearing ratio of the business
which is shown in the above table is also shown to be on the rise in comparison to previous year
which signifies that the management of the company has increased the application of debts in the

17
ACCOUNTING REPORT ANALYSIS
business. The table which is shown above also shows that the business had no debt capital in
2013 and 2014 and has started using debts from the year 2015 which might be due to the fact that
management wants to take advantage of leverage effect of the business.
Analysis of Flight Center Travel ltd
The analysis of the solvency ratio of Flight Center Travel ltd is done on the basis of the
computation of key financial ratios of the business and how the same can be used for the purpose
of estimating the capital structure of the business. The table and graph which is shown below
represents the same
Growth Rate
Particulars 2013 2014 2015 2016 2017
201
8 2014 2015 2016 2017 2018
Financial
Leverage 2.31 2.2 2.19 2.23 2.24 2.2
-
4.76
%
-
0.45
%
1.83
%
0.45
%
-
1.79
%
Gross
Gearing
119.5
8%
119.5
8%
119.5
3%
122.9
6%
141.4
7%
1.20
%
0.00
%
-
0.04
%
2.87
%
15.0
6%
-
99.15
%
Net Gearing 2.73% 2.73% 3.54% 4.75% 8.25%
8.77
%
0.00
%
29.6
9%
34.1
9%
73.4
4%
6.40
%

18
ACCOUNTING REPORT ANALYSIS
2014 2015 2016 2017 2018
0
0.5
1
1.5
2
2.5
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Solvency Ratio
Financial Leverage Gross Gearing Net Gearing
GG Growth FL Growth NG Growth
Figure 8: (Graph Showing significant Solvency ratios of Flight Center Travel ltd)
Source: (Created by the Author)
The financial leverage of the business as shown in the above table is shown to have
reduced slightly which suggest that the management of the company is planning to reduce the
debt capital of the business. The gross gearing is shown to have reduced slightly in comparison
to previous year analysis which confirms the decision of the management to reduce the debt
capital which is used by the business. The net gearing ratio which is shown in the above table is
shown to have increased which suggest that the long-term borrowings of the business is used.
Comparative Analysis
In order to compare between the businesses of Webjet ltd and Flight Center Travel ltd,
the net gearing ratio of both the companies are considered which is shown in a tabular format
and also shows graphical presentation of the same.
Net Gearing
2013 2014 2015 2016 2017 2018
Flight Center Travel Limited 2.73% 2.73% 3.54% 4.75% 8.25% 8.77%

19
ACCOUNTING REPORT ANALYSIS
Webjet Limited 0% 0% 26% 11% 17% 21%
2013 2014 2015 2016 2017 2018
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Net Gearing
Flight Center Travel Limited Webjet Limited
Figure 6: (Chart Showing Comparative analysis for both the companies)
Source: (Created by the Author)
The graph which is shown above represent the net gearing ratio of the business and also
the use of debt capital for the business (Arkan, 2016). The application of debt capital is
significantly used more by the management of Webjet ltd in comparison to the business of Flight
Center Travel ltd which shows that the management of Webjet ltd is more dependent on debt
capital for the purpose of financing the activities of the business. This also shows that the level of
risks which are present in the business of Webjet ltd is significantly more than the business of
Flight Center Travel ltd.
Conclusion
The overall conclusion which can be drawn for the purpose of analysis shows that the
business of Flight Center Travel ltd is performing better than Webjet ltd. The profitability ratio
of both the companies shows that the business of Webjet ltd needs to improve the same as there
is a decline in the profitability of the business and also in the growth rate of profitability ratio of
the business. The competitor Flight Center Travel ltd has a positive profitability estimate as

20
ACCOUNTING REPORT ANALYSIS
shown in the discussion above. The management needs to make improvements in the same in
order to ensure that the profits of the business are stable and are achieved at growing rates.
The liquidity ratio of both the companies shows that Flight Center Travel ltd has a more
favorable ratio as shown in the table above. The current ratio of Webjet ltd has fallen
significantly as shown in the discussion area of the assessment. The solvency ratio of the
business shows that the management of Webjet ltd applies more of debt capital in capital
structure mix than Flight Center Travel ltd which also increases the overall risks of the business.
Therefore, it can be said that further improvements can be made to the performance of the
business of Webjet ltd in terms of profitability, liquidity and solvency aspects of the business.
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