We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Qantas Financial Analysis - Case Study Example

Comments (0)
Qantas is one of the largest airlines companies in Australia and has been involved in providing national and international transportation and freight services. The company has three major business operations viz. flying businesses, flying services, and associated businesses…
Download full paper

Extract of sample
Qantas Financial Analysis

Download file to see previous pages... An analysis of Qantas' financial position and business risk has been done with different profitability, liquidity and gearing ratios. Belkaoui (1998, p11) illuminates that "the profitability ratios portray ability of the firm to efficiently use the capital committed by stockholders and lenders to generate revenues in excess of expenses". The following profitability ratios provide an insight into the profit generating capacity and performance of the company over the last two financial years:
The rate of return on total assets ratio expounds the ability of a firm in utilizing its various assets towards profit generation. Qantas' rate of return on total assets ratio has declined by about 25% in the year 2006 as compared to 2005. It suggests that the company's profitability has tumbled down significantly over the last two financial years. The net profit ratio evaluates a company's profitability position after considering all the operating costs and interest expense etc (Mcmenamin Jim, 1999). The net profit margin of Qantas again indicates a serious decline in the company's ability to generate profit out of its sales revenue. This ratio has also decreased by about 25% in the year 2006. The worth noting point is that the company's sales revenue, as suggested by its financial statements for the year 2006, has increased by about 8% in 2006. ...
The company's short term financial position and business risks can be analyzed with the help of the following liquidity ratios:
Liquidity Ratios
Current Ratio



Quick Ratio (Acid Test)



Average Receivables Collection Period



The current ratio measures a company's ability to liquidate its short-term liabilities out of its various current assets (Meigs & Meigs, 1993). The above table shows that Qantas' current ratio has increased by about 20% in the year 2006 as compared to 2005. It suggests and improvement in the company's ability to pay of its short term liabilities. The quick ratio examines the short-term solvency of a company after deducting its stock from the current assets (Mcmenamin Jim, 1999). The quick ratio for Qantas for the year 2006 further shows an increasing trend. This ratio has risen by about 23% in the year 2006 as compared to 2005. It illuminates that the company has acquired more capacity to pay off its short term debt after keeping aside its stock from the current assets. However, the company bears significant short term solvency risks, because it still possesses about $0.93 worth of current assets and $0.87 worth of quick current assets to pay of its $1 worth of current liabilities. The average receivables collection ratio suggests that it takes the company about 25 days to collect cash from its debtors. This ratio shows a sign of stability in the company's collection policies.

Qantas' long term financial position and business risk have been analyzed with the help of the following gearing ratios which illustrate the company's capital structure and its ability to meet its interest ...Download file to see next pagesRead More
Comments (0)
Click to create a comment
Qantas Consumer Behaviour Theory

It is evidently clear from the discussion that through the strategic planning concept, Qantas is able to expand their business and target new customer segment which helps to reduce the risk of downfall. Qantas positions its brand as ‘safe’ and ‘Spirit of Australia’ and accordingly offers those services which can satisfy these brand images.

4 Pages(1000 words)Case Study
Financial analysis case report
Lowe’s must focus on the increasing its product, price, place, promotion and people strategies to increase its revenues. In terms of briefly talking about the question, the research is focused on analyzing the difference between the Dupont performance of Lowe’s and Home Depot retail stores.
4 Pages(1000 words)Case Study
Financial analysis
The company has reported an increase in its annual profits from 2005 to 2007 yet it has had cash flow problems which has made the company to lack sufficient cash to pay for its obligations within the deadline. Investors are usually concerned with the overall strength of a company including the cash flows and profitability before they get to invest in the company and that is why companies should ensure positive cash flows.
5 Pages(1250 words)Case Study
An organization should work hard to minimize its operating costs and increase a flexible model that enhances growth and productivity. It is crucial for HR to utilize its expertise to increase growth and manage employees’ related issues. This report discusses various ways that Qantas can implement to reduce employee related costs.
14 Pages(3500 words)Case Study
Financial analysis Case Study
Further on, changes in profile and profitability ratios are explained with the help of the information found in notes to financial statements, statement of accounting policies, board members' reports, corporate governance issues, and press releases, one by one.
13 Pages(3250 words)Case Study
According to Dignam & Lowry (2006, p.87), corporate governance is a multi-faceted concept, but which primarily deals with accountability of certain individuals in an organization by instituting
7 Pages(1750 words)Case Study
Financial Analysis
Miller is in need of information on his likelihood of obtaining a bank loan. Miller does not have any experience in running his own business but has decided to run
5 Pages(1250 words)Case Study
Basically, an internal analysis of the company is a very effective strategy that helps the managers to identify its internal strengths and weaknesses. This analysis is very important since it helps the managers to focus on key strategic issues based on
4 Pages(1000 words)Assignment
Financial statement auditing analysis
Auditing is an art in itself in the sense that, numerous procedures that guides it operations in various procedures. The process of auditing seeks to ensure that the financial statements and other documents are complete, they really occurred, correctly classified, accurate
7 Pages(1750 words)Case Study
Financial analysis
From the forecast on income statement made after the acquisition of Exterran Holdings Inc, the venture can be considered profitable. The estimate of growth in sales in financial year 2014 is 9%. This
2 Pages(500 words)Case Study
Let us find you another Case Study on topic Qantas Financial Analysis for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us