Qantas Employee Turnover Ratio Summary

Table 3 Asset efficiency
Categories/ratios 2016 2015 Difference Percentage Change
Assets 16705 17530 -825 -4.5% sales revenue 13961 13604 357 -4.7% accounts receivable 795 959 -164 -5.4%
Asset turnover ratio 3.98 3.88 10.2% 0.9%
Days debtors 45.86 47.06 -1.2 0.2% times debtor’s turnover 3.98 3.88 10.2% -0.8%
See Appendix 1 for calculations sourced from (Qantas Investor centre, 2017)

Analysis
If a company can generate more sales with fewer assets its turnover ratio will be higher this shows that a company is operating more efficiently in respect of converting its assets into salesif you have too much invested in your company's assets, your operating capital will be too high. If you don't have enough invested in assets, you will lose sales

This is due in part to the 2015 figure for assets being 181 million higher than the 384 million than would have been the case if the group had the legally entitlement to offset recognized amounts see note 20(c) and the 87.5% decrease in assets held for sale (Qantas Investor centre, 2017). The cash flow has increased 12.7% indicating that Qantas group is in a better position to cover its obligations from cash flows generated by its operating activities (Birt.,et al, 2012). It should be noted that Airlines are in a unique position compared to other industries in that they may use cash from pre-paid ticket sales to meet the costs of routine operations, in the airline business these amounts are substantial (Verrender, 2014). Qantas, for example, had $4.59 billion on its books, from the proceeds of pre-sold tickets notwithstanding these are prepayments and therefore a liability (Verrender, 2014). When comparing Qantas to Virgin a further investigation shows that, Virgin’s operating cash flows fell $65 million to $10 million resulting in a negative free cash flow of $253 million during 2014 (Verrender, 2014). Qantas by contrast in comparison, increased its positive cash flow from $194 million to $770 million (Verrender, 2014). In the period 2015 to 2016 Qantas has maintained a positive cash flow however as the cash flow ration shows this has decreased