Analysis and Evaluation: Financial Performance of Cathay Pacific 2012

Analysis and Evaluation:
Financial Performance of Cathay Pacific
2012

Contents

Introduction …………………………………………………………… P.3

Liquidity Ratios ……………………………………………………….. P.3-6

Financial Leverage Ratios ……………………………………………... P.6-7

Profitability Ratios ……………………………………………………... P.8-9

Market-based Ratios ……………………………………………………. P.10-11

Dividend Policy Ratios …………………………………………………. P.12-13

Conclusion ……………………………………………………………… P.13-14

Reference ……………………………………………………………….. P.15-16

Introduction

Cathay Pacific Airways was established in 1946, it has more than 130 aircrafts and it provides scheduled cargo and passenger services to more than 110 destinations around the world.
Cathay Pacific Airways has formulated a series of long-term strategy, including, the continued expansion of their network and fleet, continued investment in products and services and continued development of Hong Kong as one of the world’s leading international aviation hubs. Also, it is building its own cargo terminal in Hong Kong that will begin operations in early 2013. At the same time, it has announced the purchase of new passenger aircrafts, with the intent of operating one of the youngest, most fuel-efficient wide-body passenger fleets in the world by 2019.
This analytical report will evaluate the financial performance of Cathay Pacific Airways by the analysis of the use of several ratios.

Financial Analysis

Liquidity Ratios
Liquidity ratios measure the ability of a firm to meet its current obligations which shows whether or not the firm has sufficient cash to conduct business for the next few months. Liquidity ratios for Cathay Pacific are shown in Table 1.

Table 1 Liquidity Ratios

Current Ratio
Quick Ratio
Cash Ratio
2011
0.8473
0.8161
0.5295
2010
1.0417
1.0127
0.6878
2009
0.8597
0.8280
0.5542
2008
0.8014
0.7740
0.4310
2007
1.2378
1.2056
0.7903
2006
1.0136

References: http://downloads.cathaypacific.com/cx/investor/annualreports/2009_annual-report_en.pdf 5.Cathay Pacific Airways Limited: 2008 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2008_annual-report_en.pdf 6.Cathay Pacific Airways Limited: 2007 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2007_annual-report_en.pdf 7.Cathay Pacific Airways Limited: 2006 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2006_annual-report_en.pdf 8.Cathay Pacific Airways Limited: 2005 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2005_annual-report_en.pdf 9.Cathay Pacific Airways Limited: 2004 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2004_annual-report_en.pdf 10.Cathay Pacific Airways Limited: 2003 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2003_annual-report_en.pdf 11.Cathay Pacific Airways Limited: 2002 Annual Report, Retrieved November 20, 2012 from Cathay Pacific Airways Limited, Web site: http://downloads.cathaypacific.com/cx/investor/annualreports/2002_annual-report_en.pdf 12.Cathay Pacific Airways Ltd Financials, Retrieved December 29, 2012 from Reuters, Web site: http://www.reuters.com/finance/stocks/financialHighlights?symbol=0293.HK 13.Cathay Pacific Air Stock Price, Retrieved December 29, 2012 from Yahoo Finance, Web site: http://hk.finance.yahoo.com/q/hp?s=0293.HK&a=11&b=20&c=2002&d=00&e=1&f=2003&g=d