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Instructions All assignment must be submitted by 1 Group member through TurnitIn. Students to show calculations of relevant ratios Length: 2,000 to 2,500 words Student Name ...

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Instructions

All assignment must be submitted by 1 Group

member through TurnitIn.

Students to show calculations of relevant ratios

Length: 2,000 to 2,500 words

Student Name

Student Number

*

Marking*Sheet*

*

Your*mark

Question*1*(40 marks)*

*

Question*2*(10 marks)*

Question*3*(15 marks)*

*

Question*4*(15 marks)*

*

Question*5*(20 marks)*

*

/*100*

!


Page 1 of 4


Page 2 of 4


&

&

Listed&Company&

Stock&Code&

Name&

Corporate!Travel!

CTD

Management!Ltd

Flight!Centre!Travel!Group!

FTL

Ltd

Helloworld!Travel!Ltd

HLO

Qantas!Airways!Ltd

QAN

Virgin!Australia!Holdings!

VAH

Ltd

Webjet!Ltd

WEB

&

&

& &

Student&Name&

Student&ID&


Initial&to&confirm&that&you&

contributed&a&fair&share&to&

this&assignment&and&agree&

with&all&answers&provided.&


Page 3 of 4


FACT&SET&

• Go to the website for your allocated company and obtain the Income Statement and Balance Sheet for the company for the 2014/15 (Year 1) and 2016/17 (year 3) financial years. You will find this information in the relevant Annual Reports. I have provided links to some of these Reports.&

&

TASKS&

1. Based on the information contained in these statements calculate for each company for the relevant financial years. You must show the formula used and your calculations.

&

a. The Net Profit MarginO

b. Current RatioO

c. Capitalization ratioO

d. Asset Turnover RatioO

e. Leverage RatioO

f. Return on EquityO

g. Return on Total AssetsO

h. Earnings per share (EPS)O

i. Net Debt to Equity RatioO and

j.& Total Return to Shareholders. [40&Marks]&

2. Demonstrate and explain what would happen to the 2017 Return on Equity and the Net Debt to Equity Ratios if your allocated company just prior to the end of the 2017 financial year raised an additional $50 million loan from the bank, which it invested entirely in new plant and equipment. Assume that the immediate effect on sales and net profit was zero. [10&marks]

3. Using the ratios calculated in Task 1 of this case study, compare and contrast the financial performance of the companies over the period of your analysis. [Provide a single agreed answer per team.]&[15&marks]

4. Use your analysis of the financial performance of the companies over the past 3 years to explain any differences in the Total Return to Shareholder between the companies over the past 3 years. [Provide a single agreed answer per team.] [15&marks]

5. Compare and contrast the current market value of each company. Use the ratios you have collected, other information from the media to provide observations about the value of these companies (i.e. cheap or expensive?)![Provide a single agreed answer per team.] [20&marks]

TOTAL&MARKS&

• 100&marks

!


Page 4 of 4

Answered Same Day May 11, 2020

Solution

Aarti J answered on May 16 2020
139 Votes
Financial Analysis – Travel companies
Course Name
Course Date
Student’s Name
Financial Analysis – Travel companies         3
Table of Contents
Contents
Task 1: Ratio calculations    3
Task 2 : Return on equity and Net debt to equity    8
Task 3: Comparing and contrast    8
Task 4: Total return on Shareholder’s equity    13
Recommendations    14
Conclusion    14
Financial Analysis – Travel companies
Task 1: Ratio calculations
    Webject Ltd
    
    2014
    2015
    2016
    2017
    Net profit margin
    20.00%
    15.38%
    14.47%
    26.13%
    Net profit
    19
    18
    22
    52
    Divide: Revenue
    95
    117
    152
    199
    
    
    
    
    
    Cu
ent ratio
    1.59
    1.34
    1.05
    1.46
    Cu
ent assets
    78
    118
    206
    330
    Divide: Cu
ent liabilities
    49
    88
    197
    226
    
    
    
    
    
    Capitalization ratio
    13.75%
    28.70%
    16.02%
    19.10%
    Long term debt
    11
    33
    29
    51
    Divide: Long term debt + shareholder's equity
    80
    115
    181
    267
    
    
    
    
    
    Asset turnove
    0.74
    0.58
    0.40
    0.40
    Sales
    95
    117
    152
    199
    Divide: Assets
    129
    203
    378
    493
    
    
    
    
    
    Leverage ratio
    0.47
    0.60
    0.60
    0.56
    Debt
    60
    121
    226
    277
    Divide: Assets
    129
    203
    378
    493
    
    
    
    
    
    Return on equity
    27.54%
    21.95%
    14.47%
    24.07%
    Net income
    19
    18
    22
    52
    Divide: Equity
    69
    82
    152
    216
    
    
    
    
    
    Return on total assets
    14.73%
    8.87%
    5.82%
    10.55%
    Net income
    19
    18
    22
    52
    Divide: Assets
    129
    203
    378
    493
    
    
    
    
    
    Earnings per share
    0.23
    0.22
    0.27
    0.53
    Net income
    19
    18
    22
    52
    Divide: Ost shares
    82
    82
    82
    99
    
    
    
    
    
    Net debt to equity
    0.87
    1.48
    1.49
    1.28
    Total debt
    60
    121
    226
    277
    Divide: Total equity
    69
    82
    152
    216
    
    
    
    
    
    Virgin Australia
    
    2014
    2015
    2016
    2017
    Net profit margin
    -9.88%
    -2.36%
    -5.23%
    -4.36%
    Net profit
    -356
    -111
    -261
    -220
    Divide: Revenue
    3603
    4706
    4986
    5041
    
    
    
    
    
    Cu
ent ratio
    0.64
    0.69
    0.62
    0.76
    Cu
ent assets
    1235
    1586
    1714
    1788
    Divide: Cu
ent liabilities
    1921
    2300
    2780
    2348
    
    
    
    
    
    Capitalization ratio
    62.04%
    69.56%
    72.14%
    60.82%
    Long term debt
    1711
    2459
    2362
    2434
    Divide: Long term debt + shareholder's equity
    2758
    3535
    3274
    4002
    
    
    
    
    
    Asset turnove
    0.77
    0.81
    0.82
    0.79
    Sales
    3603
    4706
    4986
    5041
    Divide: Assets
    4679
    5835
    6054
    6350
    
    
    
    
    
    Leverage ratio
    0.78
    0.82
    0.85
    0.75
    Debt
    3631
    4759
    5142
    4782
    Divide: Assets
    4679
    5835
    6054
    6350
    
    
    
    
    
    Return on equity
    -33.97%
    -10.31%
    -28.62%
    -14.03%
    Net income
    -356
    -111
    -261
    -220
    Divide: Equity
    1048
    1077
    912
    1568
    
    
    
    
    
    Return on total assets
    -7.61%
    -1.90%
    -4.31%
    -3.46%
    Net income
    -356
    -111
    -261
    -220
    Divide: Assets
    4679
    5835
    6054
    6350
    
    
    
    
    
    Earnings per share
    -0.12
    -0.03
    -0.07
    -0.03
    Net income
    -356
    -111
    -261
    -220
    Divide: Ost shares
    3017
    3515
    3531
    7988
    
    
    
    
    
    Net debt to equity
    3.46
    4.42
    5.64
    3.05
    Total debt
    3631
    4759
    5142
    4782
    Divide: Total equity
    1048
    1077
    912
    1568
    
    
    
    
    
    Qantas Airlines
    
    2014
    2015
    2016
    2017
    Net profit margin
    -18.76%
    3.59%
    6.52%
    5.43%
    Net profit
    -2843
    557
    1029
    852
    Divide: Revenue
    15155
    15532
    15784
    15680
    
    
    
    
    
    Cu
ent ratio
    0.66
    0.68
    0.49
    0.44
    Cu
ent assets
    4932
    5049
    3458
    3119
    Divide: Cu
ent liabilities
    7525
    7470
    7028
    7095
    
    
    
    
    
    Capitalization ratio
    70.76%
    65.77%
    66.35%
    65.06%
    Long term debt
    6927
    6613
    6417
    6586
    Divide: Long term debt + shareholder's equity
    9789
    10055
    9672
    10123
    
    
    
    
    
    Asset turnove
    0.88
    0.89
    0.95
    0.91
    Sales
    15155
    15532
    15784
    15680
    Divide: Assets
    17314
    17525
    16700
    17218
    
    
    
    
    
    Leverage ratio
    0.83
    0.80
    0.81
    0.79
    Debt
    14452
    14083
    13445
    13681
    Divide: Assets
    17314
    17525
    16700
    17218
    
    
    
    
    
    Return on equity
    -99.34%
    16.18%
    31.61%
    24.09%
    Net income
    -2843
    557
    1029
    852
    Divide: Equity
    2862
    3442
    3255
    3537
    
    
    
    
    
    Return on total assets
    -16.42%
    3.18%
    6.16%
    4.95%
    Net income
    -2843
    557
    1029
    852
    Divide: Assets
    17314
    17525
    16700
    17218
    
    
    
    
    
    Earnings per share
    -1.37
    0.27
    0.49
    0.46
    Net income
    -2843
    557
    1029
    852
    Divide: Ost shares
    2077
    2062
    2083
    1853
    
    
    
    
    
    Net debt to equity
    5.05
    4.09
    4.13
    3.87
    Total debt
    14452
    14083
    13445
    13681
    Divide: Total equity
    2862
    3442
    3255
    3537
    
    
    
    
    
    Helloworld travel
    
    2014
    2015
    2016
    2017
    Net profit margin
    -22.03%
    -73.36%
    0.68%
    6.83%
    Net profit
    -63
    -201
    2
    22
    Divide: Revenue
    286
    274
    292
    322
    
    
    
    
    
    Cu
ent ratio
    1.04
    1.06
    1.05
    1.09
    Cu
ent assets
    290
    283
    337
    324
    Divide: Cu
ent liabilities
    280
    266
    321
    297
    
    
    
    
    
    Capitalization ratio
    6.45%
    13.66%
    17.65%
    18.18%
    Long term debt
    26
    28
    57
    62
    Divide: Long term debt + shareholder's equity
    403
    205
    323
    341
    
    
    
    
    
    Asset turnove
    0.42
    0.58
    0.45
    0.50
    Sales
    286
    274
    292
    322
    Divide: Assets
    683
    471
    644
    638
    
    
    
    
    
    Leverage ratio
    0.45
    0.62
    0.59
    0.56
    Debt
    306
    294
    378
    359
    Divide: Assets
    683
    471
    644
    638
    
    
    
    
    
    Return on equity
    -16.71%
    #######
    0.75%
    7.89%
    Net income
    -63
    -201
    2
    22
    Divide: Equity
    377
    177
    266
    279
    
    
    
    
    
    Return on total assets
    -9.22%
    -42.68%
    0.31%
    3.45%
    Net income
    -63
    -201
    2
    22
    Divide: Assets
    683
    471
    644
    638
    
    
    
    
    
    Earnings per share
    -0.86
    -2.75
    0.02
    0.19
    Net income
    -63
    -201
    2
    22
    Divide: Ost shares
    73
    73
    89
    115
    
    
    
    
    
    Net debt to equity
    0.81
    1.66
    1.42
    1.29
    Total debt
    306
    294
    378
    359
    Divide:...
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