Financial Analysis Report
XinlanLi310064295; ShuyiWang311121136; WentingHe311145744
ACCT6003 Group Assignment
Qantas Airways and Singapore Airlines
Content
I.
1. 2.
Business Strategy Analysis
Five forces Analysis of Airline Industry Company Strategy Analysis
II. III.
1. 2. 3. 4. 5.
Accounting Analysis Financial Analysis
Return On Equity – ROE Return On Assets – ROA Profit Margin – PM Asset Turnover – ATO Debt-to-Equity Ratio – D/E Ratio
IV. V. VI.
Market Analysis Conclusion Appendix
VII. Reference
1
XinlanLi310064295; ShuyiWang311121136; WentingHe311145744
I. Business Strategy Analysis
1. Five forces Analysis of Airline Industry
In order to get understanding of industry environment and analysis of the intensity of competitions, Porter’s Five Forces Model is employed. Porter’s five forces model has obtained the insight into the industry based on the five sectors: the competitive forces rivalry, threats of new entrants, threats of substitutes, bargaining power of suppliers and bargaining power of buyers (Michael Porter Five Forces Analysis 2011). These five elements overall interprets one industry. Rivalry There is a high intensity of competition in Australian airline industry among the competitors. The degree of competition is closely related with the regulation and policy. Traced back to 1990, deregulation occurred in Australia’s domestic airline markets. (Evan 1993) In the prederegulation days, it was the service and meals that those airlines competed on (Analysis of the Airline Industry 2011). After the market was deregulated, the price wars among competitors were taken on a rather severe level. Firstly, the imbalanced situation in two airline structure, open skies and multiple designations has resulted in fierce competition in domestic front (Australian Airline Industry 2012). Secondly, there is less possibility of high differentiation among airlines, either normal carriers or low cost strategies. In other words, the product delivered is rather
ACCT6003 Group Assignment
Qantas Airways and Singapore Airlines
Content
I.
1. 2.
Business Strategy Analysis
Five forces Analysis of Airline Industry Company Strategy Analysis
II. III.
1. 2. 3. 4. 5.
Accounting Analysis Financial Analysis
Return On Equity – ROE Return On Assets – ROA Profit Margin – PM Asset Turnover – ATO Debt-to-Equity Ratio – D/E Ratio
IV. V. VI.
Market Analysis Conclusion Appendix
VII. Reference
1
XinlanLi310064295; ShuyiWang311121136; WentingHe311145744
I. Business Strategy Analysis
1. Five forces Analysis of Airline Industry
In order to get understanding of industry environment and analysis of the intensity of competitions, Porter’s Five Forces Model is employed. Porter’s five forces model has obtained the insight into the industry based on the five sectors: the competitive forces rivalry, threats of new entrants, threats of substitutes, bargaining power of suppliers and bargaining power of buyers (Michael Porter Five Forces Analysis 2011). These five elements overall interprets one industry. Rivalry There is a high intensity of competition in Australian airline industry among the competitors. The degree of competition is closely related with the regulation and policy. Traced back to 1990, deregulation occurred in Australia’s domestic airline markets. (Evan 1993) In the prederegulation days, it was the service and meals that those airlines competed on (Analysis of the Airline Industry 2011). After the market was deregulated, the price wars among competitors were taken on a rather severe level. Firstly, the imbalanced situation in two airline structure, open skies and multiple designations has resulted in fierce competition in domestic front (Australian Airline Industry 2012). Secondly, there is less possibility of high differentiation among airlines, either normal carriers or low cost strategies. In other words, the product delivered is rather