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Investigating Cathay Pacific Airways
Cathay Pacific Airways is an international airline registered and
based in Hong Kong, offering scheduled cargo and passenger service to
over 90 destinations around the world. Cathay Pacific had a fleet of
94 aircrafts providing the services.
In this project, I am going to look at how successful Cathay Pacific
Airways is in a few different ways. My primary research will base on
some questionnaire and interview by staff and customers. My secondary
research will be looking at the 2005 interim report of the firm.
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Profit
First measure of success we are going to examine is profit. Firstly,
we are going to look at the overall picture of profit. What the firm
is actually making?
The bottom line: Net Profit.
Year
Total Revenue
(HK$m)
Total Cost
(HK$m)
Net Profit
(HK$m)
2005
23,884
21,749
2,135
2004
19,659
17,429
2,230
The total cost increased as the total revenue had increased. The net
profit had a little bit of decrease, but it is still quite stable.
Net profit margin is a way of displaying net profit in relation to
sales. It is net profit expressed as a percentage of Sales.
Year
Net Profit
(HK$M)
Total Revenue
(HK$M)
Net Profit
Margin (2d.p.)
2005
2,135
23,884
8.94%
2004
2,230
19,659
11.34%
The net profit margin had decrease over the two years.
Net profit is a useful of comparing performance over time and
comparing performance with companies in the same industry, but perhaps
of a different size.
We can use capital employed as a method of measuring business success
on its own. It is an indicator of size.
Return on Capital Employed is the amount of net profit divided by the
asset employed in the business.