Internal Code: 1AJJEA
Accounting and Finance Assignment
Case Study 3
Corporate Travel Management Ltd CTD
Flight Centre Travel Group Ltd FLT
Helloworld Travel Ltd HLO
Qantas Airways Ltd QAN
Virgin Australia Holdings Ltd VAH
Webjet Ltd WEB
TASKS
1. Based on the information contained in these statements calculate for each company:
a. The annual growth in Earnings per Share over the five year period using the following formula.
b. The Net Profit Margin, Asset Turnover Ratio, Leverage Ratio, Net Debt to Equity Ratio and Return on Equity for the company for both financial years, 2012 and 2017. This data can be obtained from the 2012 and 2017 annual reports.
2. Demonstrate and explain what would happen to the 2017 FY Return on Equity and the Net Debt to Equity Ratios if your allocated company just prior to the end of the 2017 financial year raised an additional $50 million loan from the bank, which it invested entirely in new plant and equipment. Assume that the immediate effect on sales and net profit was zero. [Note you need only do this for one of the companies.]
3. Demonstrate and explain what would happen to the 2017 FY Return on Equity and the Net Debt to Equity Ratios if your allocated company just prior to the end of the 2017 financial year instead of raising the additional loan raised an additional $50 million through the sale of new shares to the public, which it used to pay for the new plant and equipment. Assume that the immediate effect on sales and net profit was zero. [Note you need only do this for one of the companies.]
4. Compare and contrast the financial performance of the companies over the past 5 years.[Provide a single agreed answer per team.]
5. Use your analysis of the financial performance of the companies over the past 5 years to explain any differences in the Total Return to Shareholder between the companies over the past 5 years, which you have calculated in Case Study 2. [Provide a single agreed answer per team.]