Research & Analysis

Report
Oxford Brookes University
Emirates Airline|
An Analysis of Financial and Business Performance Over Period of
Three Years|

Shairaz Naseeb| Registration No. 2261882

Topic Selection, Entity & Other
Details
• Selected Topic is ‘An Analysis &
Evaluation of the Business and Financial
Performance of Emirates Over a Three
Years Period’.
• Selected Company is Emirates Airlines.
• Financial and Business analysis
Performed.
• New Skills & Learning developed during
RAP.
Research Tool Used
• Financial Ratio’s
• SWOT Analysis
• PEST Analysis
Research Objectives
• Know how successful it has been in generating earning and
covering/ controlling costs in relevant period by analyzing
profitability of the company.
• Analyzing short term liquidity of the company during the
financial crunch.
• Analyzing company activities impact on its working capital
management.
• Understanding the impact of its operations on the investor’s
confidence.
• Obtain an understanding of the impact of external pressure on
the internal operations and policies.
• Examine the competitive pressure being faced by the
company.
Research Questions
• What sources of information will I access to gain information?
• What model will be used in order to achieve objective of my
RAP?
• Which ratio’s will be calculated and interpreted for the
financial analysis?
• What models should be used to target my objective for
business analysis?
• What ethical problem I might face during my research?
• What is the company’s performance in the last three years? Is
the performance comparable to its competitors?
• What are the technological, economic, social and political
factors which are being confronted by Emirates Airline?
Moreover, what is the understanding which the company has
developed for these factors and how well they can shape out
their strategies considering these factors?
Research Approach
• Systematic Way
• Ratios, SWOT and PEST Analysis
• Harvard Referencing
Ratio Analysis
• Profitability Ratio’s
• Liquidity Ratio’s
• Investment Ratio’s
• Leverage Ratio’s
Profitability Analysis
• Turnover Growth
• Operating Profit Margin
• Net Profit Margin
• ROA
• ROE
• ROCE
Analysis Table
Description 2013 2014 2015
Turnover 9% 13% 7%
Growth
Operating 3.99% 5.28% 6.79%
Profit
Net Profit 3.21% 4.03% 5.25%
ROA 2.41% 3.20% 4.09%
ROE 9.91% 12.78% 16.10%
ROCE 5.31% 6.71% 8.09%
Analysis Graph
PROFITABILITY ANALYSIS
2013 2014 2015
18.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
Operatin Profit Net Profit ROA ROE
 Competitor Analysis
Turnover Analysis - Net Profit Margin
%age 2015
30%
27% 2014
20% 24%
19%
10% 13% 2013
9% 7%
0%
0.00% 5.00% 10.00%15.00%20.00%25.00%
FY 2013 FY 2014 FY 2015
Etihad Airways Emirates Airline
Emirates Airline Etihad Airways

40% Operating Profit Margin

30%

20%

10%

0%
2013 2014 2015
Emirates Airline Etihad Airways
Liquidity/ Investment/ Leverage
Ratio’s
• Current Ratio
• Quick Ratio
• Dividend Cover
• Interest Cover
• Operating Gearing Ratio
Analysis Table
Description 2013 2014 2015
Current Ratio 1.12 0.84 0.80
Quick Ratio 1.07 0.79 0.75
Dividend 3.09 3.94 2.10
Cover
Interest 3.61 3.80 4.17
Cover
Operating 175.63% 171.59% 171.8%
Gearing
Analysis Graph
4.50

4.00

3.50

3.00

2.50

2.00

1.50

1.00

0.50

0.00
Current Ratio Quick Ratio Dividend Cover Interest Cover
2013 2014 2015
Analysis Graph
Operating Gearing Ratio
176.00%

175.00%

174.00%

173.00%

172.00%

171.00%

170.00%

169.00%
Operational Gearing Ratio
2013 2014 2015
SWOT Analysis
STRENGTHS
 Strong Customers Bonding
 Echo Friendly
 Brand Image
 Government owned Entity
 Largest Airline
 More Stations
 Timely Flights
OPPORTUNTIES
• Different Partners
• Resources Availability
• Government Support
• Can Expands operations in
other countries
• Reduce ticket price
WEAKNESS
• High Ticket Price
• No Focus on Middle & Lower
Class
• Unfavorable Labor Policies
THREATS
• Jet Fuel Price
• Competition
• Volatile market
• Unexpected flight delays
PEST Analysis
Political Analysis Economic Analysis
• Government owned • Higher inflation
company • Exchange rates fluctuations
• Effect of Govt. polices
• Tax and duties

Social Analysis Technological Analysis

• Customers • Quality control
• Higher class Attraction • Improved infrastructure
• Latest Software's
Conclusion
• Emirates Airline is a Large Reputable Organization.
• Have Credibility.
• Revenue grew by 21.8%.
• Government Policies have direct impact on Company.
• Higher funds needed to improve technology & Fleet
size.
• Financial issue can face because of High Finance Cost
Recommendations
• Try to reduce operating cost through better management.
• Hedge against currency risk.
• Maintain investors’ confidence by stabilizing dividend payout ratio for
long term stability of the company.
• Manage their lease arrangement and borrowings to reduce finance cost
(major outflow).
• Ensure that political issues are not effecting company performance.
• Keep satisfied their key employees by revising their labor policies.
• For marketing and advertisements, company should hire brand
ambassadors such as famous personalities like sports players.
• Maintain their existing structure instead of focusing on continues
development to avoid any down fall of economy effects.
• Ensure Revenue Growth through different Strategies such as gifts
vouchers.
• Affordable ticket pricing rates are definitely demanded for middle class
population.