3 Year Financial Analysis of a Company

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  • Topic: Financial ratio, Balance sheet, Annual report
  • Pages : 34 (8408 words )
  • Download(s) : 377
  • Published : November 14, 2011
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Acknowledgement

This work is dedicated to my family, for their continued support, guidance and unending concern.

I acknowledge and thank my project mentor for taking time off his busy schedule to mentor this project. I am most grateful to GOD, through whom I am able to do all things

Contents:
Part 1
Project objectives and overall research approach
1.1 Topic chosen and reasons for choosing topic4
1.2 Reasons for choosing organization4
1.2.1 Historical background of KQ5
1.2.2 Awards and achievements:5
1.2.3 Vision and Mission6
1.2.4 Authorized Capital6
1.2.5 Group structure7
1.3 Project objectives7
1.4 Overall research approach8

Part 2
Information gathering and Accounting/Business techniques
2.1 Sources of Information:9
2.1.1 Primary source:9
2.1.2 Secondary sources:9
2.2 Description of the methods used to collect information10 2.2.1 Interviews10
2.2.2 Annual reports and ACCA manuals11
2.2.3 Online access11
2.3 The limitations of information gathering11
2.3.1 Primary source11
2.3.2 Secondary sources12
12.4 Ethical issues that arose during information gathering:13 2.5 The accounting / business techniques used13
2.5.1 The Balanced Scorecard (BSC)13
2.5.2 Accounting techniques15

Part 3
Results, analysis, conclusions and recommendations
3.1 Description of the results16
3.1.1 Limitations of the results16
3.2 Presentation of results17

3.3 Analysis of Data by use of Balanced Scorecard.......................................................19

3.3.1 Customer perspective…………….....………………………………………………19 3.3.2 Internal perspective...................................................................................…….20 3.3.3 Innovation and learning…..................................................................................21 3.3.4 Financial22

Profitability ratios:22
Liquidity ratios:25
Capitalization/financial leverage ratios28
Investor ratios33
3.4 KQ’s operational performance analysis.36
3.5 Challenges facing KQ37
3.6 How it overcomes the challenges38
3.7 Conclusion39
Business performance39
Profitability39
Liquidity39
Capitalization/ Leverage40
Investment40
3.8 Recommendations40
List of references42
Bibliography46
Appendix A Ratio Analysis and Computation……………….………….…………………..47 Appendix B: Sample Financial Statements(KQ)….…………….………...........................48 Appendix C: Sample Financial Statements(SAA)………………..………..…………….…49 Appendix D: Formulae Audit Trail for KQ………….………………………………….........50 Appendix E: List of Acronyms……………………….……………………………………….51 Part 1

Project objectives and overall research approach

1.1 Topic chosen and reasons for choosing topic

The topic chosen is “The business and financial performance of an organization over a three year period”

The reason for choosing the topic was that, during the author’s ACCA studies; especially in Paper P5 (Advanced Performance Management), he came to realize that collecting management data and going on to merely calculate accounting ratios without explaining the trend over time was meaningless to management.

Consequently; an interest arose in the author to embark on an exercise that involved collecting and critically analyzing data to make conclusions regarding the performance of the selected organization; in a quest to add substance to the lessons he had learnt in his ACCA studies.

1.2 Reasons for choosing organization

The author chose to research on Kenya Airways (here in after known as KQ) due to its outstanding reputation in passenger and cargo carriage in the country (Kenya), the East Africa region and the African continent at large. Besides, KQ faces stiff competition both locally and internationally from South African Airways (here in after known as SAA) among many other airlines which include Fly Emirates, Virgin Atlantic and Fly 540, thus the author embarked on an...
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