Ryan Air Cost Analysis Paper
It is a key financial factor that asses the profitability of a company core activities excluding fixed cost. Gross profit margin is defined as the ratio b/w gross profit of the business to the sales revenue generated for the same period. It is a given by the formula shown below: Gross profit margin = (gross profit/sales revenue) × 100
Gross profit margin ratios of BA and Ryan air is shown below: It can be seen from above table that Ryan air performed well compared to BA. Though the values over three years slightly fluctuate but they were generating good profitability by improving their sales and proper balancing and control of fuel costs which has almost rise …show more content…
Both BA and Ryan air has got appreciable shorter period to collect their revenue. In the analysis period from 2011- 13, BA managed to get back his revenue from receivables by an average of 17 days with slightly increased in 2013 compared to 2011. When it comes to Ryan air it has got very shorter period of an average of 5 days. From the table it is clearly seen that debtor days have fallen which means business is converting credit sales into cash much quicker than BA. This shorter period certainly asset for Ryan air liquidity.
Average settlement period for payables: The average settlement period for payables measures how long, on average, the business takes to pay its trade payables. The ratio is calculated by a formula shown below:
Average settlement period for payables = (trade payables/credit purchases) ×365
The ratios calculated for creditors as shown …show more content…
The values of Ryan air is small compared to BA because Ryan air revenue is almost half of BA’s total revenue. At last despite of their company size both are making use of their assets properly.
Sales revenue per employee: It is the ratio relates sale revenue generated to a particular business resource, which is labour. Higher the value indicates greater staff efficiency. Its ratio is calculated by a formula shown below:
Sales revenue per employee = (sales revenue / number of employees)
The ratio calculated for BA and Ryan air shown below: The above tables describes about sales revenue per employee. Both companies uses different currency so for better analysis BA revenue is converted to euros according to exchange rate in that periods. The values clearly states that Ryan air is more labour productive than BA and other fact is noticed from table is that two companies increasing their efficiency over the analysis period
Gross profit margin ratios of BA and Ryan air is shown below: It can be seen from above table that Ryan air performed well compared to BA. Though the values over three years slightly fluctuate but they were generating good profitability by improving their sales and proper balancing and control of fuel costs which has almost rise …show more content…
Both BA and Ryan air has got appreciable shorter period to collect their revenue. In the analysis period from 2011- 13, BA managed to get back his revenue from receivables by an average of 17 days with slightly increased in 2013 compared to 2011. When it comes to Ryan air it has got very shorter period of an average of 5 days. From the table it is clearly seen that debtor days have fallen which means business is converting credit sales into cash much quicker than BA. This shorter period certainly asset for Ryan air liquidity.
Average settlement period for payables: The average settlement period for payables measures how long, on average, the business takes to pay its trade payables. The ratio is calculated by a formula shown below:
Average settlement period for payables = (trade payables/credit purchases) ×365
The ratios calculated for creditors as shown …show more content…
The values of Ryan air is small compared to BA because Ryan air revenue is almost half of BA’s total revenue. At last despite of their company size both are making use of their assets properly.
Sales revenue per employee: It is the ratio relates sale revenue generated to a particular business resource, which is labour. Higher the value indicates greater staff efficiency. Its ratio is calculated by a formula shown below:
Sales revenue per employee = (sales revenue / number of employees)
The ratio calculated for BA and Ryan air shown below: The above tables describes about sales revenue per employee. Both companies uses different currency so for better analysis BA revenue is converted to euros according to exchange rate in that periods. The values clearly states that Ryan air is more labour productive than BA and other fact is noticed from table is that two companies increasing their efficiency over the analysis period