Assessment Description
This presentation has been presented to evaluate the performance of Qantas Limited. Following points would be discussed in this presentation:
Porter’s 5 forces model SWOT Analysis Corporate Strategy Accounting policies Financial performance Differences and similarities in the financial performance of the company.
Five Forces Analysis
Rivalry Among Existing Players
The main domestic competition of the company is Tiger and Virgin Blue Airways
The main international competition of the company is British Airways
Bargaining power of buyers
Bargaining power of Qantas’s customer is quite higher due to price variations amongst aviation industry’s companies.
Bargaining power of Suppliers
Bargaining power of Qantas’s supplier is quite higher due to low concentration power of supplier.
Threat from Substitutes
No close substitution is there in aviation industry.
Threat from New Entrants
New entrants are required huge investment and thus the threat is quite lesser.
SWOT Analysis of Qantas
Strengths: the main strength of this company is its brand value and world recognition in international market
Weaknesses: the main weakness of this company is that it only focuses over the first class travelers
Opportunities: this company could grab the international market and diversity of business could also be done by the company.
Threats: The main threats of this company are financial crisis, complex situation and changes into the choice of customers.
Corporate Strategy of Qantas across Local division and International Divisions From 1992
uSince 1992, various changes have taken place into the Qantas limited’s corporate strategy. The company has made the changes into its services and the policies of Australian flagship airliner. From that time, the company’s strategy has not been altered especially in partition of domestic where the company has offered low price services to the clients through Jetstar segment.
Accounting Policies of the company which Auditors should look while auditing for Airline companies
Leasing Accounting Policy
According to the evaluation over the report of the company, it has been found that huge investment is required for airline industry as it is quite costly to buy aircraft and other plants. Occasionally, aviation industry’s firms could take the aircrafts on rent.
Depreciation Policy
Further, the depreciation policy must be adopted by a company according to its nature and the machineries and plants. Through evaluating over the aviation industry, it is required for a company to maintain the accounting standards and calculate the depreciation accordingly.
Financial Performance and Position of Qantas at the end of 2013
Questions to Answer
Revenues and Expenses Performance
Through evaluation over the annual report, It has been found that organization has earned$15.9 billion in 2013. at the same time, the total cost of the company was 13.83 billion. Moreover, it has also been analyzed that the total turnover of the company has been reduced and thus the EBIT has also been affected. Further, it has been observed that few policies of the company has helped it to reduce the level of loan worth $245 million (Qantas Airways Ltd, 2017)
Balance sheet Performance
Further the balance sheet of the company has been analyzed and found that the company’s total was worth $20,032 m. The assets of the company has been reduced by -5.41%. At the same time, liabilities were worth $14,192 m at the same time, the equity was worth of $5,840.
Qantas Financial Performance and Financial Position in 2016
Financial Performance
Further in 2016, this company has earned the worth the revenue was $1.03 billion. It has also been found that the changes are quite positive and depicts about the marvelous positive changes (Rahman, Azad & Mostari, 2015). The total expenses of the company are total worth of $15.71 billion (Qantas Airways Ltd., 2017).
Financial Position
Further, in 2016, the assets of the company are $16, 705 m (Chung, 2016). Consequently, Further, the liabilities and shareholder equity of the company is $13,445 m and $3,360 m.
Differences and Similarities between 2013-2016
Similarities
Through the evaluation over both the years, it has been found that the performance of the company has been better in both the years. The revenues depict about the better performance and the position of the company. Further, the domestic policies of the company are almost similar in both the years.
Differences
uFurther, the differences of the company has also been analyzed and found that the liabilities of the company were $14,192 m in 2013 to $13,445 m in 2016. Further, the few changes also taken place into the assets performance.
Recommendation
The above evaluation and study depicts that the performance of the Qantas would be better. According to the study, it is suggested to the investors to invest into the Qantas limited for better position and better performance of the company. the total return of the company is continuously enhancing and thus the stock of this company would be a better choice for the investors to enhance the level of their investment.
References
Qantas Airways Ltd. (2017). Annual Financials for Qantas Airways Ltd. Retrieved from Annual Financials for Qantas Airways Ltd.: Annual Financials for Qantas Airways Ltd.
Qantas Airways Ltd. (2017). Financial Position Annual Reports . Retrieved from Qantas Airways Ltd.:
Chung, F. (2016). Qantas posts record $1.53 billion full-year profit. Retrieved from News Limited:
Rahman, K., Azad, S., & Mostari, S. (2015). A Competitive Analysis of Airline Industry: A Case Study on Biman Bangladesh Airlines. Journal of Business and Management, 17(4), 23-33.
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