For the purpose of the Analysis of Financial Statements, I as analysts faced with an investment decision-making scenario, wherein I have to analyze the financial statements of British Airways a listed Company for the year ended 2008, 2007 and 2006. In this paper I am going to work on British Airways. for the identical and support my conclusion through the forthcoming financial-analysis.
Limitations to our Study
My report is essentially based on information derived from secondary sources, such as British Airways Annual-Report (2008, 2007 and 2006), periodicals and business literature. Lack of primary information can be seen as a factor adding subjective bias to our report. Due to time-constraints and the restricted scope of our study, I was unable to conduct a detailed cross-sectional analysis, and hence, only incorporated those financial-ratios that I judged would recommend the investment-decision.
The predecessor of British Airways was Imperial Airways - a colonial instrument, which connected the British Empire. From this developed the British Overseas Airways Company (BOAC), which was merged with British European Airways (BEA) to conceive British Airways. Even after privatisation, British Airways kept the likeness of being booked, expert and formal.
Each year, British Airways conveys 40 million buyers to 162 place visiteds. Sixty per hundred of the firm's enterprise originates overseas. In the nine months ending December 31, 1997, British Airways declared incomes of $11 billion (US), encompassing $763.8 million from cargo operation. This produced in snare earnings of $854.3 million, putting British Airways amidst the most money-making airlines in the world (see Table I). In 1998, the public limited business had 60,000 employees, up from 35,000 in 1983.
An overview of the industry
The airline industry has undergone important restructuring in latest years. Airlines, previously competitors in a highly regulated commerce, have become opportunistic seekers of co-operation. In today's world, mega-carriers and little airlines are employed together rather than vying with one another. Forms of co-operation include sub-contracting, code-sharing, franchising and the formation of international marketing networks. Such alliances permit firms to aim on their respective core competencies, while drawing the benefits of scale economies. In essence, co-operation among competitors has commanded to increased competitiveness. This has accelerated the tendency of joint trading, and the airline has become distinuished by the yearn to pertains to a international network. The inclination has been to strive for a international presence.
There are some means to expand in the airline industry. The customary (and relatively slow) way for an airline to elaborate is to add air travel to its agenda, using its own gear and crew. For decades, this was the usual means to expansion. Growth was generally incremental. To cite an example, Qantas - originally Queensland And Northern Territory Aerial Service (QANTAS) - begun out by providing air service inside Australia. In time, it supplemented many paths, conceiving an complicated route network; now, it carries travellers on expanded flights, for instance, from Bali to Singapore and on to London. Needless to say, such expansion needs time as well as important capital ...