Your analysis will include a calculation of the following ratios for 2018 and 2019 fiscal years:
- Profit Margin
- Debt to Asset Ratio
- Current Ratio
- Comment on the Basic Earnings per Share Amount
Please provide a commentary on the result of the ratio or calculation, and your assessment of whether this is a positive or negative.
Financial Report For the year ended 30 June 2019 This financial report covers the Virgin Australia Holdings Limited Group, consisting of Virgin Australia Holdings Limited ACN 100 686 226 and its controlled entities. The financial report is presented in Australian dollars. Virgin Australia Group | Annual Report 2019 41 Consolidated financial statements For the year ended 30 June 2019 Contents Consolidated statement of profit or loss\b 44 Consolidated statement of profit or loss and other comprehensive income\b 45 Consolidated statement of financial position\b 46 Consolidated statement of changes in equity\b 47 Consolidated statement of cash flows\b 49 Notes to the consolidated financial statements\b A. Basis of preparation\t\b 50 B. Results\b 54 B1. Operating segments\b 54 B2. Earnings per share\b 57 B3. Revenue\b 58 B4. Expenses\b 59 B5. Taxation\b 60 B6. Reconciliation of net loss to net cash from operating activities\b 62 C. Working capital and other assets and liabilities\b 63 C1. Receivables\b 63 C2. Inventories\b 63 C3. Other financial assets\b 64 C4. Other assets\b 64 C5. Payables\b 65 C6. Provisions\b 65 C7. Unearned revenue\b 67 D. Tangible and intangible assets\b 67 D1. Assets classified as held for sale\b 67 D2. Property, plant and equipment\b 68 D3. Intangible assets\b 70 D4. Impairment testing\b 71 E. Capital structure and financial risks\b 73 E1. Capital management\b 73 E2. Cash and cash equivalents\b 73 E3. Interest-bearing liabilities\b 74 E4. Share capital\b 75 E5. Dividends\b 76 E6. Reserves\b 76 E7. Financial risk management\b 77 E8. Fair value measurements\b 83 E9. Offsetting financial assets and liabilities\b 84 42 Virgin Australia Group | Annual Report 2019 Consolidated financial statements(continued) For the year ended 30 June 2019 Contents (continued) F. Group structure\b 85 F1. Business combinations\b 85 F2. Investments accounted for using the equity method\b 85 F3. Controlled entities\b 86 F4. Non-controlling interests\b 88 F5. Deed of Cross Guarantee\b 89 F6. Parent entity disclosures\b 91 G. Other items\b 91 G1. Commitments\b 91 G2. Contingent liabilities\b 93 G3. Share-based payments\b 93 G4. Related parties\b 96 G5. Auditor's remuneration\b 98 G6. Events subsequent to reporting date\b 98 99 Directors' declaration\b 100 Independent auditor's report\b Virgin Australia Group | Annual Report 2019 43 Consolidated statement of profit or loss For the year ended 30 June 2019 Note 2019 $m Restated(1) 2018 $m Airline passenger revenue B3 5,317.7 4,981.7 Freight revenue B3 Revenue and income Loyalty program revenue Other income Revenue and income 125.6 105.2 383.8 330.3 - 3.5 5,827.1 5,420.7 (383.1) (389.0) Operating expenditure Aircraft operating lease expenses B4 Airport charges, navigation and station operations (1,107.5) (1,060.7) Contract and other maintenance expenses (246.0) (246.4) Commissions and other marketing and reservations expenses (533.4) (467.4) Fuel and oil (1,178.5) (985.5) Labour and staff related expenses (1,346.0) (1,246.7) Impairment losses on cash-generating units B4 (152.6) (120.8) Impairment losses on other assets B4 - (47.8) Onerous contract expenses C6 (47.4) (58.5) Other expenses from ordinary activities B4 (592.9) (512.9) (373.4) (337.3) (0.9) - (5,961.7) (5,473.0) Depreciation and amortisation Ineffectiveness on cash flow hedges Net operating expenditure Share of net profit of equity-accounted investee F2 Loss before net finance costs and tax Finance income Finance costs B4 - 3.5 (134.6) (48.8) 28.5 19.2 (189.2) (171.8) Net finance costs (160.7) (152.6) Loss before tax (295.3) (201.4) Income tax expense B5 Loss (20.1) (451.9) (315.4) (653.3) (349.1) (681.0) 33.7 27.7 (315.4) (653.3) Attributable to: Owners of the Company Non-controlling interests F4 Earnings per share Cents Cents Basic earnings per share B2 (4.1) (8.1) Diluted earnings per share B2 (4.1) (8.1) (1) The comparative has been restated to be consistent with the current financial period revenue presentation which separately presents freight and loyalty program revenue. The consolidated statement of profit or loss should be read in conjunction with the accompanying notes. 44 Virgin Australia Group | Annual Report 2019 Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2019 Note Loss 2019 $m 2018 $m (315.4) (653.3) Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (nil related tax) 45.2 (0.3) Effective portion of changes in fair value of cash flow hedges (37.4) 362.6 Net change in fair value of cash flow hedges transferred to profit or loss (184.1) (96.3) Effective portion of changes in fair value of cash flow hedges (time value of options) (71.9) (6.7) Net change in fair value of cash flow hedges transferred to profit or loss (time value of options) 45.0 45.1 Net change in fair value of cash flow hedges transferred to initial carrying value of hedged item - 19.3 Income tax (expense)/benefit on other comprehensive income 74.5 (97.2) Other comprehensive profit/(loss), net of tax (128.7) 226.5 Total comprehensive loss (444.1) (426.8) (477.8) (454.5) Attributable to: Owners of the Company Non-controlling interests F5 33.7 27.7 (444.1) (426.8) The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. Virgin Australia Group | Annual Report 2019 45 Consolidated statement of financial position As at 30 June 2019 Note 2019 $m 2018 $m Cash and cash equivalents E2 1,740.0 1,415.5 Receivables C1 268.7 281.6 Inventories C2 51.3 47.6 Current assets Derivative financial instruments E7 71.5 220.0 Other financial assets C3 31.2 12.1 Other C4 2.6 2.7 2,165.3 1,979.5 191.6 Total current assets Non-current assets Receivables C1 182.6 Derivative financial instruments E7 13.6 64.0 Other financial assets C3 255.7 284.2 Investment accounted for using the equity method F2 - 8.2 Deferred tax assets B5 57.8 - Property, plant and equipment D2 3,202.1 3,031.0 Intangible assets D3 580.7 617.0 Other C4 10.4 12.9 Total non-current assets 4,302.9 4,208.9 Total assets 6,468.2 6,188.4 Current liabilities Payables C5 929.1 807.5 Interest-bearing liabilities E3 771.9 295.1 Derivative financial instruments E7 14.8 6.6 Provisions C6 255.5 269.0 Unearned revenue C7 1,262.7 1,142.1 Other 2.9 3.6 3,236.9 2,523.9 C5 2.7 5.6 Interest-bearing liabilities E3 2,256.9 2,273.0 Derivative financial instruments E7 2.8 0.2 Provisions C6 339.8 277.6 Total current liabilities Non-current liabilities Payables Other 10.2 13.1 Total non-current liabilities 2,612.4 2,569.5 Total liabilities 5,849.3 5,093.4 618.9 1,095.0 2,238.9 Net assets Equity Share capital E4 2,238.5 Reserves E6 117.6 268.3 (1,766.4) (1,415.8) 589.7 1,091.4 Retained earnings Equity attributable to the owners of the Company Non-controlling interests F4 Total equity The consolidated statement of financial position should be read in conjunction with the accompanying notes. 46 Virgin Australia Group | Annual Report 2019 29.2 3.6 618.9 1,095.0
