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Chapter 4 analysis of financial statement
Chapter 4 analysis of financial statement
Financial statement analysis assignment
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British Airways Financial Analysis
The following pages comprise of a financial analysis of British Airways for the financial year ending March 31, 1999.
British Airways is a well-established company and has enjoyed high profits for the majority of its existence. However, the most recent accounts that have been published tell a different story of how the year has been.
British Airways produced a pre-tax profit of £225 million. This is £355 million less than in 1998 which illustrates the decline in demand for British Airways services. Although this decline in profits of 61% seems unacceptable it was caused by a variety of abnormal expenses. For example the company spent £35 million on computer systems to ensure that they are “year 2000 compliant”. British Airways also entered the low cost air travel market during the year with the launch of “Go”, which is running at a loss as it tries to establish itself in a highly competitive business environment.
Lower fuel prices and the strength of the Pound benefited British Airways, and as a result the company stocked up on 45% of its fuel requirement for the next financial year. This also contributed to the fall in profits for the year.
Operating Profit Fell from £504 million in 1998 to £442 million in 1999. The return on capital employed or primary ratio was just 17.06%. This is a great deal smaller than the 1998 figure of 61.2%. These figures both show that the business is achieving a return higher than that which could be achieved in a non-risk investment such as a high interest no access bank account which would only give a return of 7 to 9%.
British Airways has a working capital of 5.1, which shows that it has high solvency. Overall, although the firm has incurred a loss of £355 million in the financial year it is still a healthy business that shows promise of high profits in future years.
"In early 2000 Air Canada along with entire airline industry faced huge loss due to the high global economic downturn. With slow travel outstanding to the downturn and September 2011 incident the airline industry was hit extremely hard. Air Canada consequently posted net losses of $1.32 billion in 2001 and $828 million in 2002. Furthermore, with the spread for SARS disease Air Canada’s Asian route got effected
• Qantas had to make an increased profit and pay a dividend to its shareholders which increased over the years of management
Return on sales is decreasing and is below the industry average, but the goods news is that sales and profits have been increasing each year. However, costs of goods are increasing and more inventory is left over each year causing the return on sales to decrease. For 1995, it was 1.7% which is less than the average of 2.44% but is a lot higher than the bottom 25% of companies as seen in exhibit 3, which actually have negative sales return of 0.7%. Return on equity is increasing each year and at a higher rate than industry average. In 1995, it was 20.7%, greater than the average of 18.25% and close to the highest companies in exhibit 3, of 22.1% showing that the return in investment in the company is increasing, which is good for the owner.
They are to assess, evaluate, share and collaborate patient information to other health professionals to maintain quality and safe care delivery (NMBA, 2010). For example, scenario two illustrates an effective collaboration and communication between the nurse and other health professionals (Scenario 2: Leadership and teamwork in medical emergency teams [Scenario 2], 2012). She made recordings of the patient’s health status, and was able to share her analysis to the leader which enabled him to devise a plan and inform the family immediately. Therefore, effective team work is evident in scenario two. They were able to communicate, trust and respect each other’s opinion in which it provided the most appropriate treatment for the patient (Scenario 2: Leadership and teamwork in medical emergency teams [Scenario 2], 2012). On the other hand, in scenario one, the enrolled nurse failed to evaluate and record her assessment regarding patient’s health (Scenario 1: Leadership and teamwork in medical emergency teams [Scenario1],
In 1985, the Nintendo of America Company released a revolutionary video game system called the Nintendo Entertainment System or NES. The Nintendo Company who has already been in the video game industry such as laser gaming, electronic video
JetBlue Airways Corporation has been a rapidly growing discount airline and biggest success story in the industry by using its strong customer service considerations and low fares to build a solid, growing customer base.
In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.
Working in the health care setting, teamwork and collaboration are used frequently to insure that everything runs correctly and efficiently. According to qsen.org, teamwork and collaboration consists of functioning effectively within nursing and inter-professional teams, fostering open communication, mutual respect, and shared decision-making to achieve quality patient care. While assessing the patient a nurse can come into contact and work with many different individuals. These can include other nurses, doctors, therapists, and family
Kathleen Hanser, `The Secret Behind High Profits at Low-fare Airlines'. http://www.boeing.com/commercial/news/feature/profit.html [accessed 15 May 2003]
Nintendo worked hard to make the first consoles that helped them get a jump start in success, but unfortunately it had a downfall that almost crushed their company’s reputation. In 1980, one of Nintendo’s skilled inventors Gunpei Yokoi, saw a man playing with his calculator, which gave him an idea, a small game that runs on batteries (Ryan 10-11). The Game & Watch was that game and it was released in 1980 which allowed the player to watch a ball and keeping it airborne with buttons (Ryan 10-11). Later on, Nintendo made TV consoles. In 1983, the Nintendo Entertainment System or the NES was released and games like “Super Mario” and Legend of Zelda” became pop...
British Airways used to be Britain’s national airline until it was diversified in the 1990s. British Airways is currently a leading international airline brand and it has had to position itself strategically in an increasingly competitive global business environment.
The International Air Transport Association (IATA). 2014. Airline Cost Performance. IATA Economics Briefing. [report] IATA, p. 31.
Several weaknesses in airline operations were identified as the causes of the RM1.3 billion loss. These included esclating fuel prices, increased maintenance and repair costs, staff costs, low yield per available seat kilometer ("ASK") via poor yield management and an inefficient route network.
Barra Airways has an interest coverage ratio (ICR) of 18; this means that Barra Airways is not burdened with a large amount of interest payments on existing debts. Therefore, using debt does appear to be an attractive source of finance. This is because Barra Airways existing interest burden is low, meaning that to increase it would have a reduced effect on the company’s net profit. However, EasyJet has an ICR of 30.88, considerably larger than that of Barra Airways [5]. Lenders may look at this data and conclude that Barra Airways is a riskier company to lend too than others in the same industry; this will result in a higher interest rate on any debt taken out.
Product Strategy of the British Airways 1.1 Introduction to product strategy Product is the most important component in an organization. Without a product there is no place, no price, no promotion, and no business. Product is anything that can be offered to a market to satisfy a want or a need. It is the core ingredient of the marketing mix and is everything favorable and unfavorable, tangible and intangible received in the exchange of an idea, service or good (Kotler 11th edition, 2003). British Airways is a business offering service products, flights across destinations, in the transportation industry.