The following table reports various financial ratios for Qantas and Virgin for 2018. (a) Given that the

Question:

The following table reports various financial ratios for Qantas and Virgin for 2018.

(a) Given that the companies operate in the same industry, write a report explaining what the ratios suggest about the companies’ operating, financing and investing activities.
(b) If you were contemplating an investment in either Qantas Airways or Virgin Australia, identify what other (non-financial) information would assist your investment decision and why this information is important to you.

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Accounting Business Reporting For Decision Making

ISBN: 9780730369325

7th Edition

Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver, David Bond

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Question Posted: Dec 22, 2022 10:20 AM

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The following table reports various financial ratios for Qantas and Virgin for 2018. (a) Given that the

Question:

Operating margin ROE ROA Total debt/equity (D/E) Current ratio Cash per share ($) PER Net profit margin Price/book value Qantas Airways 9.16% 26.14% 5.44% 119.93% 0.49 1.09 10.82 5.74% 2.38 Virgin Australia 3.22% (48.96)% 1.74% 234.53% 0.78 0.17 (12.56)% 1.71

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a Qantas ROE and ROA are higher than Virgins indicating that Qantas has more ability to generate earnings compared to Virgin Virgin generates 174 cents of return per dollar of investment in assets whi...View the full answer

Accounting Business Reporting For Decision Making

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