Overview of Webjet Limited
Answer a)
Webjet limited is a company that provide travel booking services to its customers via online mode (Pitchbook.com, 2022). It is described as an online travel agency, that provide its customer with numerous benefit such as they help them to search and make bookings in domestic and international travel flights deals that is best suitable for them. they also provide car hire and hotel accommodation services to its customers besides providing travel insurance services (Australia, 2022). The organization is situated in Melbourne location of Victoria in Australia and also forms a part of Travel Arrangement as well as Reservation Services Industry. It is also stated that this entity operates their business through two business segment that is Business to Consumer Travel and Business to Business Travel. The company named Webjet was established through the effort of three people that includes David Clarke, John Lemish and Allan Nahum. They are the three founder who established this organization in the year 1998. the organization has it headquarter in Melbourne, Australia (Forbes, 2022).
It is also revealed from the company information that the organization conduct its business through the help of almost 300 employees in total. The employees of the entity are helping the organization by functioning in different part of the world. With the help efficient operation of the business through the employees and other management of the organization, the entity succeeded in generating huge number of sales during the year. According to the information given in the annual report of the entity it is revealed that the organization has generated sales of about 38.5 million USD in the year 2021. (Annualreports.com, 2022). It has also been found that Webjet limited is regarded as the parent company for 12 of its subsidiaries operating in different part of the world.
Answer b)
During the Covid 19 pandemic due to the lockdown and various types of restriction imposed by the government, the business of tours and travel was severely impacted. But now it is seen that significant opportunities are expected to be provided to the business of Webjet OTA because the government has reduced the limitation of certain restriction as a result of which international travel agency may start earning. With respect to the acquisition decision of Webjet limited for acquiring the Trip ninja company various types of benefits are expected to be enjoyed by the organization after its acquisition.
In traditional multi-stop trip, the entity was able to combine the airfares from carriers through codeshare agreements, however after making acquisition of Trip Ninja, the facilities of technology provided by Trip Ninja would provide entity with an ability to create complex itineraries in combination of non-aligned carriers so as to offer best price to its customers.
Trip Ninja generally offers two types of technological facilities that include Fare Structure which is a technology that helps in automating the process involved in combining the fares from carriers who generally does not have cooperation or any codeshare agreement this will help the entity to provide its customers with the best priced tour. This can be defined as a Traditional fair manual process, in which Trip Ninja can able to provide the results within a second. Fare structure also provide traditional travel agents, with the ability to create complex itineraries by making use of non-aligned carriers in a very automated way. On the other hand, Flex Trip is also an automated re-ordering of a multi-stop itinerary that helps in delivering better price to the customers. If both these technologies will be used in combination, Fare Structure and Flex Trip would provide travel industry with an ability to provide consumer pricing option
Webjet company always focused to offer its customers with the best convenience and choices, thus it is believed that the combined effort of both Trip Ninja and Webjet would help the organization to fulfil its desired target. Thus, it is expected that acquisition of Trip Ninja would help entity to increase their shares in the international flights market.
Answer a
In the given scenario since Trip Ninja has announced that their business will shut down it is expected that after acquisition of Trip Ninja by Webjet the organization will be at loss. it will not generate any goodwill for the entity, goodwill gets generated whenever the difference between the acquisition value of consideration given, any amount of non-controlling interest and any fair value of equity acquired previously is more than the net assets recognized by the entity and if after adjustment its value comes negative then it will result into bargain purchase.
Answer b
Answer a
Consolidated accounting is defined as a process in which financial information taken from the financial statement of each individual subsidiary are combined and adjusted together along with the financial information of parent company. These are then represented in the form of a single consolidated financial statement that provide detail understanding of financial information of a group in a consolidated form (Kbmanage.com, 2022).
Webjet company is regarded as the parent company of three business subsidiary that includes Webjet OTA, WebBeds, and Online Republic. According to the information given in the annual report of the company it is revealed that during the year 2021 the entity incurred a consolidated net loss after tax amounting to $156.6 million with revenue generation of about $38.5 million till 31st march 2021.
Answer b
Answer a
If Webjet had bought only 90% of Trip Ninja then non-controlling interest then following transaction may get eliminated from the above transactions:
- Any adjustment done for recognizing Unrealized profits from intragroup transactions as well as balances.
- Unless the cost gets recovered any Unrealized losses from intragroup transactions may get eliminated
- Effects occurred in transaction due to upstream and downstream.
Answer b
If there exist any minority interest then these are represented separately from the equity and liability of the organization in the consolidated balance sheet of the entity. In the income statement also these would be represented separately as a non-operating line items.
Reference
Annualreports.com. (2022). Retrieved 29 January 2022, from https://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_WEB_2021.pdf
Australia, W. (2022). About Webjet – Webjet. Retrieved 29 January 2022, from https://www.webjet.com.au/about/#:~:text=As%20Australia%20and%20New%20Zealand’s,insurance%20and%20car%20hire%20worldwide.
Forbes. (2022). Webjet. Retrieved 29 January 2022, from https://www.forbes.com/companies/webjet/?sh=64793be11c3b
Kbmanage.com. (2022). Consolidated Accounting – What is it? Definition, Examples and More. Retrieved 29 January 2022, from https://www.kbmanage.com/concept/consolidated-accounting
Pitchbook.com. (2022). Webjet Company Profile: Stock Performance & Earnings | PitchBook. Retrieved 29 January 2022, from https://pitchbook.com/profiles/company/66214-45#overview.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
