Question Finance & Funding in the Travel & Tourism Sector Q Based on the table, summarize the financial strengths and weaknesses of each airline. Comments should cover the financial performance of the companies using the ratios already calculated to support your observations. You should consider and compare BOTH companies as follows:- - size in terms of turnover and net asset value - profitability - efficiency e.g. fuel cost and administration costs in relation to turnover - potential weaknesses of each airline - strengths of each airline

According to Collier (2009) the profit and account loss defines the transactions of the whole year primarily for a business. Therefore the profit and loss account is a review of the business transactions and expenditures for the 12 months. Collier (2009) illustrates that by deducting total expenditure from the overall total income, it will demonstrate on the bottom line whether the business has made a profit or loss at the end of the period. Consequently, the tour operator called Tara Travel would need to follow these producers in order to manage their accounts.

EmiratesEmiratesRyan airRyan air

2013201420132014 Balance sheet(Statement of financial position) Current ratio

Acid test ratio Capital gearing 1,335 1,568 611.6 617.2 Debtors collection period

5,136

6,421

329.6 351.8 Stock turnover ratio Profit and loss account(Income statement)

5,270 5,421 197.9 192.8 Ratio of administrative costs to sales

1,649

1,878 98.2 101.5

Ratio of fuel costs to sales 27,855 30,685

1,885.6 2,013.1 Net profit % 2.9% 6.9% 10% 2% Gross profit % 10.2% 39.2% 3% 4% Return on capital employed

1,042 1,190

435.6 463.6 Return on net assets employed

9,029 10,230 486.6 522.0 This report will summarize the overall financial performance of emirates and Ryan air airlines; this will include the financial performance with considering the size in term of turnover and net asset value, profitability, efficiency and the potential weaknesses and strength of each airline.

Emirates Airlines; Emirates airlines are a major competitor for many global companies, the

Company is based in Dubai and founded by the United Arab Emirates government in 1985. Its main activity is the provision of commercial air transportation services. "Emirates" is the largest airline in the Middle East and operating nearly 3,400 flights per week. It is the world's fastest growing international airline and its growth has never fallen below20% a year. The percentage of passengers increase is 13.8% in 2014 comparing by 2013(Annual report, 2014)

Strength: Weaknesses: Comment on the financial performance indicators

Based on the table, summarize the financial strengths and weaknesses of each airline.

Comments should cover the financial performance of the companies using the ratios already calculated to support your observations.

One should consider and compare BOTH companies as follows:-

- size in terms of turnover and net asset value

- profitability

- efficiency e.g. fuel cost and administration costs in relation to turnover - potential weaknesses of each airline

- strengths of each airline