Ratio analysis for TUI Travel
Contents
9. APPENDIX A…………………………………………………………………..…………………………………….23
10. APPENDIX B……………………………………………………………………………………………………….26
1. INTRODUCTION
Ratios are invaluable profit tools in financial analysis that can provide information on valuing a company. In this report, I am going to focus on the financial statement of the travel and tour operator company ‘TUI TRAVEL PLC’. I will start with the background of the company and I will move on to measuring the financial performance of the company through a competitive analysis of the company’s financial statement for the financial years 2011, 2012 and the evaluation of some key ratios. When calculating and interpreting the ratios, it is noteworthy to understand the economic and competitive context, in which ratios are being interpreting. Thus, in most of the ratios calculated, I am going to provide the industry average, as it has been suggested by FAME. There is a variety of ratios that can be found. In this report my main concern will be profitability, liquidity and efficiency ratios. Last but not least, after my analysis, I will give some recommendations on how the company could improve its financial performance in the future.
2. OBJECTIVES
Explore the literature on performance ratios
Calculate ratios for the two accounting years 2011 and 2012
Explain ratios
Compare ratios and evaluate company’s financial position
Draw conclusions on the current performance
Make recommendations that can be used in future action
Explain the limitations of ratio analysis in evaluating company’s performance
3. COMPANY ‘S BACKGROUND
TUI TRAVEL PLC is a leading international leisure travel firm, operating in more than 180 countries worldwide, comprising over 240 brands and serving more than 30 million customers in more than 20 source markets. It was formed in March of 2007 by a merger between the tourism division of TUI AG, which owns 51 percent of the company, and First Choice Holidays plc.
9. APPENDIX A…………………………………………………………………..…………………………………….23
10. APPENDIX B……………………………………………………………………………………………………….26
1. INTRODUCTION
Ratios are invaluable profit tools in financial analysis that can provide information on valuing a company. In this report, I am going to focus on the financial statement of the travel and tour operator company ‘TUI TRAVEL PLC’. I will start with the background of the company and I will move on to measuring the financial performance of the company through a competitive analysis of the company’s financial statement for the financial years 2011, 2012 and the evaluation of some key ratios. When calculating and interpreting the ratios, it is noteworthy to understand the economic and competitive context, in which ratios are being interpreting. Thus, in most of the ratios calculated, I am going to provide the industry average, as it has been suggested by FAME. There is a variety of ratios that can be found. In this report my main concern will be profitability, liquidity and efficiency ratios. Last but not least, after my analysis, I will give some recommendations on how the company could improve its financial performance in the future.
2. OBJECTIVES
Explore the literature on performance ratios
Calculate ratios for the two accounting years 2011 and 2012
Explain ratios
Compare ratios and evaluate company’s financial position
Draw conclusions on the current performance
Make recommendations that can be used in future action
Explain the limitations of ratio analysis in evaluating company’s performance
3. COMPANY ‘S BACKGROUND
TUI TRAVEL PLC is a leading international leisure travel firm, operating in more than 180 countries worldwide, comprising over 240 brands and serving more than 30 million customers in more than 20 source markets. It was formed in March of 2007 by a merger between the tourism division of TUI AG, which owns 51 percent of the company, and First Choice Holidays plc.
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