Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 81 views

    Revised Cathay Pacific Business Report

    Uploaded by

    Prtyk Agrawal
    The document analyzes the financial performance of Cathay Pacific from 2011-2015 using their balance sheet, income statement, and cash flow statement. It finds that Cathay Pacific's total assets grew significantly from 2011-2012 but slowed in growth from 2013-2015. Liabilities increased each year from 2011-2015. The income statement shows revenue grew each year from 2011-2013 but declined in 2014-2015, while costs fluctuated but declined in 2015. Net income grew substantially from 2011-2013 but more moderately from 2013-2015. The cash flow statement finds free cash flow declined from 2011-2012 but grew moderately from 2013-2014 and substantially in 2015, indicating improving financial health over time. In summary, the document analyzes Cath

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Revised Cathay Pacific Business Report

    Uploaded by

    Prtyk Agrawal
    81 views9 pages
    The document analyzes the financial performance of Cathay Pacific from 2011-2015 using their balance sheet, income statement, and cash flow statement. It finds that Cathay Pacific's total assets grew significantly from 2011-2012 but slowed in growth from 2013-2015. Liabilities increased each year from 2011-2015. The income statement shows revenue grew each year from 2011-2013 but declined in 2014-2015, while costs fluctuated but declined in 2015. Net income grew substantially from 2011-2013 but more moderately from 2013-2015. The cash flow statement finds free cash flow declined from 2011-2012 but grew moderately from 2013-2014 and substantially in 2015, indicating improving financial health over time. In summary, the document analyzes Cath

    Original Description:

    financial performance

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document analyzes the financial performance of Cathay Pacific from 2011-2015 using their balance sheet, income statement, and cash flow statement. It finds that Cathay Pacific's total assets grew significantly from 2011-2012 but slowed in growth from 2013-2015. Liabilities increased each year from 2011-2015. The income statement shows revenue grew each year from 2011-2013 but declined in 2014-2015, while costs fluctuated but declined in 2015. Net income grew substantially from 2011-2013 but more moderately from 2013-2015. The cash flow statement finds free cash flow declined from 2011-2012 but grew moderately from 2013-2014 and substantially in 2015, indicating improving financial health over time. In summary, the document analyzes Cath

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    81 views9 pages

    Revised Cathay Pacific Business Report

    Uploaded by

    Prtyk Agrawal
    The document analyzes the financial performance of Cathay Pacific from 2011-2015 using their balance sheet, income statement, and cash flow statement. It finds that Cathay Pacific's total assets grew significantly from 2011-2012 but slowed in growth from 2013-2015. Liabilities increased each year from 2011-2015. The income statement shows revenue grew each year from 2011-2013 but declined in 2014-2015, while costs fluctuated but declined in 2015. Net income grew substantially from 2011-2013 but more moderately from 2013-2015. The cash flow statement finds free cash flow declined from 2011-2012 but grew moderately from 2013-2014 and substantially in 2015, indicating improving financial health over time. In summary, the document analyzes Cath

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 9

    Analysis of Cathay pacific

    In analysing Cathay Pacific financial performance, we implement the horizontal


    analysis. The trend under analysis is five years (2011-2015). This is because when the five
    years trend is observed, it will be easy to predict the future of the airline. The comparison of
    the years provides a clear trend of the companys performance. The three important
    documents to analyse are balance sheet, income statement and the cash flow.

    Analysis of the balance sheet


    A balance sheet is a financial document also known as statement of financial position.
    This is because it tells the financial position of a company in a given period for example one
    year. The main items in the balance sheet are assets and liabilities .An accounting equation
    used to calculated assets is represented below
    Assets= Stakeholders Equity + Liabilities
    The assets included in the balance sheet for Cathay pacific represent what the airways
    own. The importance of assets is that they help the normal operations of a company and boost
    the monetary value of the company. The liabilities on the other hand represent either short
    term or long-term loans that the company owes other organisations and used for business
    operations. The Stakeholders equity represents the value we get after deducting liabilities
    from the assets.
    The annual report of Cathay Pacific shows that, during the given period the total
    assets had a high increment between 2011 and 2012, which increased 12.87%, followed by
    2012 to 2013 which had a 10.85% growth rate. The other two years had a very small growth
    rate, 2014 been the worst with 0.23% and 2015 with 0.50% .Therefore, the growth of assets
    is seen to be high at the beginning of the five years but decrease towards the end of the
    period. The total liabilities however is seen to have an increment as you move from the year
    2011 to 2015.The highest percentage increase is 72.19% in the year 2015, whereas the
    lowest is 63.27% in the year 2013.

    Assets
    Fiscal year is January-December. All
    values HKD millions.
    Cash & Short Term Investments

    2011

    2012

    2013

    2014

    2015

    19.6B

    25.28B

    29.76B

    21.99B

    21.79B

    11.49B

    12.8B

    12.36B

    10.21B

    7.21B

    8.11B

    12.48B

    17.4B

    11.78B

    14.59B

    28.98%

    17.73%

    -26.11%

    -0.90%

    14.29%

    16.33%

    17.34%

    12.79%

    12.61%

    9.86B

    8.83B

    5.49B

    5.65B

    5.49B

    5.91B

    5.6B

    5.42B

    5.53B

    5.36B

    5.91B

    5.65B

    5.47B

    5.58B

    5.41B

    (54M)

    (53M)

    (52M)

    (52M)

    3.95B

    3.23B

    70M

    123M

    127M

    -10.46%

    -37.80%

    2.90%

    -2.88%

    9.98

    11.26

    18.30

    18.76

    18.65

    1.16B

    1.19B

    1.51B

    1.59B

    1.37B

    Finished Goods

    Work in Progress

    Raw Materials

    1.16B

    1.19B

    1.51B

    746M

    911M

    2.43B

    4.24B

    4.58B

    746M

    911M

    2.43B

    4.24B

    4.58B

    31.36B

    36.21B

    39.19B

    33.47B

    33.23B

    Cash Only
    Short-Term Investments
    Cash & Short Term
    Investments Growth
    Cash & ST Investments / Total
    Assets
    Total Accounts Receivable
    Accounts Receivables, Net
    Accounts Receivables,
    Gross
    Bad Debt/Doubtful
    Accounts
    Other Receivables
    Accounts Receivable Growth
    Accounts Receivable Turnover
    Inventories

    Progress Payments & Other


    Other Current Assets
    Miscellaneous Current Assets

    Total Current Assets

    2011
    Net Property, Plant & Equipment
    Property, Plant & Equipment Gross

    2012

    2013

    2014

    2015

    73.5B

    84.28B

    94.94B

    98.47B

    100.55B

    130.67B

    142.37B

    154.24B

    156.95B

    157.36B

    Analysis of the income statement


    An income statement helps to report the revenues and expenses of a company over a
    given duration. This document is also called profit and loss account. The major components
    of the income statement are; Sales/Revenue, Net income, Earnings Per share and profit/loss.
    When the income statement show a positive net income, it means a profit was made whereas
    the vice versa shows a loss was incurred by the company. The analysis of the five years for
    Cathay assures the investors that this company is growing. We can look at the top line of the
    income statement i.e the sales/revenue. There has been a significant growth because if we
    look at the figures starting from 2011, the value has been moving up. At the same time , the
    bottom line is very important i.e the net profit or loss. In Cathay pacific airline, the year that
    recorded a loss was 2012 which shows a -84.33%.The highest income growth was realised in
    2013 which had a 203.94%.The net income growth also was not consistent because in 2014
    there was 20.23% compared to 2015 with 90.48% growth.

    Fiscal year is January-December. All


    values HKD millions.
    Sales/Revenue

    2011

    2012

    2013

    2014

    2015

    98.41B

    99.38B

    100.48B

    105.99B

    102.34B

    0.99%

    1.11%

    5.48%

    -3.44%

    85.18B

    89.27B

    91.85B

    94.71B

    82.55B

    79.02B

    82.54B

    84.49B

    86.37B

    73.69B

    6.17B

    6.74B

    7.35B

    8.34B

    8.86B

    6.13B

    6.62B

    7.14B

    8.02B

    8.39B

    41M

    122M

    210M

    323M

    472M

    4.80%

    2.88%

    3.11%

    -12.83%

    13.22B

    10.1B

    8.64B

    11.29B

    19.79B

    Gross Income Growth

    -23.60%

    -14.49%

    30.64%

    75.36%

    Gross Profit Margin

    19.34%

    Sales Growth
    Cost of Goods Sold (COGS) incl. D&A
    COGS excluding D&A
    Depreciation & Amortization
    Expense
    Depreciation
    Amortization of Intangibles
    COGS Growth
    Gross Income

    2011
    SG&A Expense

    2012

    2013

    2014

    2015

    7.72B

    7.98B

    5.88B

    5.54B

    4.81B

    Other SG&A

    7.72B

    7.98B

    5.88B

    5.54B

    4.81B

    SGA Growth

    3.38%

    -26.38%

    -5.72%

    13.26%

    Unusual Expense

    619M

    753M

    (522M)

    1.82B

    8.79B

    EBIT after Unusual Expense

    4.88B

    (753M)

    3.28B

    3.93B

    6.19B

    Non Operating Income/Expense

    466M

    97M

    290M

    272M

    200M

    Non-Operating Interest Income

    318M

    373M

    274M

    236M

    168M

    909M

    1.11B

    1.11B

    1.16B

    1.06B

    21.78%

    -0.09%

    4.52%

    -8.39%

    909M

    1.11B

    1.11B

    1.16B

    1.06B

    Research & Development

    Other Operating Expense

    Equity in Affiliates (Pretax)


    Interest Expense
    Interest Expense Growth
    Gross Interest Expense

    2011
    Interest Capitalized

    2012

    2013

    2014

    2015

    4.76B

    729M

    2.74B

    3.28B

    5.5B

    Pretax Income Growth

    -84.67%

    275.99%

    19.55%

    67.84%

    Pretax Margin

    5.37%

    803M

    409M

    675M

    599M

    1.16B

    63M

    (4M)

    146M

    201M

    233M

    Income Tax - Current Foreign

    272M

    218M

    182M

    177M

    197M

    Income Tax - Deferred Domestic

    468M

    195M

    347M

    221M

    727M

    Income Tax - Deferred Foreign

    Income Tax Credits

    1.72B

    754M

    838M

    772M

    1.97B

    Consolidated Net Income

    5.67B

    1.07B

    2.9B

    3.45B

    6.31B

    Minority Interest Expense

    169M

    212M

    284M

    300M

    308M

    5.5B

    862M

    2.62B

    3.15B

    6B

    Net Income Growth

    -84.33%

    203.94%

    20.23%

    90.48%

    Net Margin Growth

    5.86%

    Extraordinaries & Discontinued


    Operations

    Cumulative Effect Accounting Chg

    Discontinued Operations

    Net Income After Extraordinaries

    5.5B

    862M

    2.62B

    3.15B

    6B

    5.5B

    862M

    2.62B

    3.15B

    6B

    1.40

    0.22

    0.67

    0.80

    1.53

    Pretax Income

    Income Tax
    Income Tax - Current Domestic

    Equity in Affiliates
    Other After Tax Income (Expense)

    Net Income

    Extra Items & Gain/Loss Sale


    Of Assets

    Preferred Dividends
    Net Income Available to Common
    EPS (Basic)

    2011

    2012

    2013

    -84.33%

    204.11%

    20.27%

    90.39%

    3.93B

    3.93B

    3.93B

    3.93B

    3.93B

    1.40

    0.22

    0.67

    0.80

    1.53

    -84.33%

    204.11%

    20.27%

    90.39%

    3.93B

    3.93B

    3.93B

    3.93B

    3.93B

    11.67B

    8.86B

    10.11B

    14.08B

    23.84B

    EBITDA Growth

    -24.08%

    14.17%

    39.26%

    69.30%

    EBITDA Margin

    23.30%

    EPS (Basic) Growth


    Basic Shares Outstanding
    EPS (Diluted)
    EPS (Diluted) Growth
    Diluted Shares Outstanding
    EBITDA

    2014

    2015

    Analysis of the cash flow statement


    Cash flows statements are very useful in determining how much the company has
    without external financing .The company is able to pay its dividends, debts, buy stock and
    invest for future growth with the help of free cash flow .when calculating cash flows the
    elements to consider are; Net income, Amortization/Depreciation, Changes in working capital
    and Capital expenditures. When considering the operating activities, the operating cash
    should be higher than the net income for the company to be doing well. The free cash flow
    growth for Cathay Pacific is negative at the beginning of the period meaning the company is
    not doing well between 2011 and 2012.there is a small growth of 1.07% between 2013 and
    2014 and a very high growth of 146.27 in the following year. This show that as we move
    towards the end of the given five years, the free cash flow is increasing.
    When we evaluate the overall performance of the company for the five years, the
    attributed profit of Cathay Pacific in the year 2011 was HK$ 5501 million, which was 50.1%
    less than the previous year. This was highly affected by the economic variability, decline of
    demand for shipment at Hong Kong and Mainland China and the high fuel prices. The year
    2012 experienced more difficulties and these affected the entire aviation industry. The prices
    of fuel went up by 1.7% and competition increased on different routes. The profit f attributed
    6

    to HK$ 916 million. In the next year 2013,the profit increased to HK$2620 million .the
    improvement was attributed to the strengthening of the business and reduction of the fuel
    prices by 4.6%.The same year, several measures were taken to reduce costs such as reducing
    capacity, withdrawing older aircrafts and using fuel-efficient aircrafts. The year 2015 was
    than 2014 due to the reduction in fuel prices .There was high load factor, which came because
    of demand for the economy class. However, the revenue in 2015 decreased by 3.5 %
    compared to the previous year. The decrease in revenue was because of increased
    competition, unfavourable changes in the foreign currency and passengers using different
    connections to reach their destination. The operating costs increased in 2015 by 2.3% due to
    increased workforce, operations and increased congestion at Hong Kong.

    Operating Activities
    Fiscal year is January-December. All
    values HKD millions.
    Net Income before Extraordinaries

    2011

    2012

    2013

    2014

    2015

    5.5B

    1.61B

    3.76B

    4.44B

    6.66B

    -70.67%

    133.11%

    17.95%

    50.26%

    6.17B

    6.74B

    7.35B

    8.34B

    8.86B

    6.13B

    6.62B

    7.14B

    8.02B

    8.39B

    41M

    122M

    210M

    323M

    472M

    Deferred Taxes

    Investment Tax Credit

    (2.35B)

    (1.16B)

    (1.89B)

    (751M)

    6.77B

    9.32B

    7.19B

    9.23B

    12.02B

    22.3B

    4.66B

    685M

    3.72B

    (1.52B)

    (6.02B)

    Receivables

    1.15B

    Accounts Payable

    2.59B

    Other Assets/Liabilities

    1.05B

    724M

    4.04B

    (1.44B)

    (6.25B)

    13.98B

    7.88B

    12.95B

    10.51B

    16.28B

    -43.64%

    64.35%

    -18.87%

    54.91%

    14.21%

    7.93%

    12.89%

    9.91%

    15.90%

    Net Income Growth


    Depreciation, Depletion & Amortization
    Depreciation and Depletion
    Amortization of Intangible Assets
    Deferred Taxes & Investment Tax Credit

    Other Funds
    Funds from Operations
    Extraordinaries
    Changes in Working Capital

    Net Operating Cash Flow


    Net Operating Cash Flow Growth
    Net Operating Cash Flow / Sales

    Investing Activities
    2011
    Capital Expenditures

    (17.61B)

    2012
    (20.98B)

    2013
    (20.53B)

    2014

    2015

    (14.82B)

    (13.18B)

    Information technology
    The Company has also improved its information technology every year, which has
    aided in operations. There has been introduction of reservation systems, mobile services,
    procurement systems, digital communication, and cargo booking systems among others.
    Provision of services to the customers has been made easy by use of IT technology such as
    use of IBM servers. The servers are very fast and clients are very impressed by the response
    time of the systems. In addition, a simplified data management system ensures that the users
    can access their details without any complications. The company therefore relies so much on
    systems for its effectiveness and efficiency.

    You might also like