Trend analysis of FLights2
Share market performance4
The purpose of this investigation is to find out the better of two companies that Tom and Wendy should invest their money in; the two companies are Auckland International Airport Limited and Infratil Limited. A third alternative may be to invest in NZX50. Sources where information will be gathered from will be secondary and consist of NZX Deep Archive found in the library database, NZX.com, NZ Time Series and the websites of the two companies. The websites are highly reliable as new information is added regularly making it very up to date. As only the last 5 years will be looked at of the performance of both companies, the decision made will have to be a guess, a guess that will be backed up by data that happened in the past, the New Zealand economy has been fluctuating high and low for the past decade and any decision made will be based on past performances with no knowledge of events that will impact the New Zealand share market. Discussion
The airport industry is not as complex as it seems, they are everywhere and require constant attention and work that involves hundreds if not thousands of employees working around the clock. An airports status is determined by the number of airlines and the number of flights that enter the airport, as well as minor things such as facilities of shops and resting areas. The airport industry in New Zealand started in the 1930’s and steadily increased until 1965 where Auckland International Airport was completed and many long haul flights were made which caused an increase in the airport industry (Auckland International Airport Limited, 2008). Trend analysis of FLights
The trend of flights both arrivals and departures is seasonal when appendix 1B is looked at where the data in appendix 1A was collected from NZ Time Series (2008) and analyzed to show trends. There is an increase of flight numbers in around the month of January; this could be the case as it is the hot summer season and most Kiwis are on vacation and want to go overseas as it could be there only chance of the year. The low number or decrease in flights occurs around the month of May as it is winter and not many international arrivals take place with tourists that may want to go to a warmer country. This cyclic trend occurs every 12 months but is on the rise as numbers are increasing on the average, a forecast has been plotted on the graph of appendix 1B and shows a good outlook for the airport industry as numbers will continue to increase at a steady rate. Financial performance
Revenue and Net Profit are two key accounting elements that help distinguish a company in its performance. By examining appendix 2A and looking at the data and graphs it is apparent that Infratil has a much higher revenue, increasing 800% in 5 years, more than Auckland International Airport’s 33% increase. This would suggest that Infratil is doing much better than Auckland Airport but when the revenue is examined against the expenses, Infratil’s increases by 1 billion dollars, 818%, while Auckland Airports increased by only 28%. Surplus after tax or Net Profit is steadily increasing for both businesses in the long run, yet even though Infratil has higher revenue, almost 4 times that of Auckland Airport, Auckland Airport has a higher Net Profit on the other hand, more than twice that of Infratil. The net profit margin for Auckland Airport is at 66% for the year 2008 and 5% for Infratil in the year 2008 as shown in appendix 2B and 2C of the key ratios, Auckland Airport increased in the net profit margin...