Cathay Pacific Analysis

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  • Topic: Cathay Pacific, Hong Kong, Hong Kong International Airport
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  • Published : April 27, 2011
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Financial numbers past five years:
1. Total Sales (US$M)
| 2009| 2008| 2007| 2006| 2005|
Sales| 8587| 11098| 9661| 7793| 6527|
Sales comprises revenue and surcharges from transportation services, airline catering, recoveries and other services provided to third parties. As we can see, the whole trend is increas with a peak in 2008 of US$11098, and a big down in 2009 with US$8587. 2. Total Comprehensensive Profit

| 2009| 2008| 2007| 2006| 2005|
Profit| 729| (1209)| 924| 548| 445|
The most notable thing is that highes sales in 2008 generate a lowest profit with a minus US$1209. Besides the effect from international economic climate, there maybe something wrong in cost control. 3. Total Asset

| 2009| 2008| 2007| 2006| 2005|
Asset| 12668| 14710| 15083| 13217| 10032|
Total asset includes:
Non-current assets Fixed assets
Intangible assets
Investments in associates
Other long-term receivables and investments
Current assets Stock
Trade and other receivables
Liquid funds
Year 2008 rank No.1 in this index. And asset in 2009 is less than that in 2007, annual report adress that during the depression, Cathay Pacific tried to kept its profit by cutting expenditure and selling assets. We cannot judge the performance through a sole number. Fewer assets means less capacity or smaller scale, however, fewer assets also results in less cost and efficient operating. 4. Total Liability

| 2009| 2008| 2007| 2006| 2005|
Liability| (8495)| (9781)| (8580)| (7357)| (5513)|
Total liability includes: Long-term liabilities;
Related pledged security deposits;
Net long-term liabilities;
And so on
Comparing five years’ number, liability in 2005 and 2006 is much fewer than that of year 2007, 2008 and 2009, but the profit growth between those three years is less than rate between 2005, 2006 and 2007. 5. Total Equity

| 2009| 2008| 2007| 2006| 2005|
Equity| 4173| 4929| 6503| 5860| 4519|
It equals to total asset minus total liability. So, total equity is total net asset. Fortunately, figures are all positive and fluctuating form US$4519 to US$4173 with a peak US$6503 in 2007. 6. Cash Flow (Cash and cash equivalents at 31st December)

| 2009| 2008| 2007| 2006| 2005|
Cash Flow| 1294| 903| 868| 739| 547|
Operating cash flow equals to net income plus amortization and depreciation minus capital expenditures and dividends. Free cash flow is the amount of cash that a company has left over after it has paid all of its expenses, including investments. To some degree, cash flow measures porfermance of a company, which means the more the better. But if company put large amout cash in investment, their cash flow will be small. So it’s hard to say which year performs well only via this index. 7. Share price (Year-end, US dollar)

| 2009| 2008| 2007| 2006| 2005|
Share price| 1.86| 1.13| 2.62| 2.46| 1.74|
Share price is an overall indicator which is affected by market share, reputation, performance and potential. So, in normal state, the high share price is the better their performance is. Obviously, 2008 is a turning point with low price and share price is getting higher again from 2009. 8. Earning Per Share

| 2009| 2008| 2007| 2006| 2005|
EPS| 0.15| (0.28)| 0.23| 0.15| 0.16|
It equals to earning divided by shares. Like GDP and GDP per capita, EPS even more indicates situations. It is clear that share price of 2006 is much higher than that of 2009 while the EPS are the same, that is to way increment of shares is main reason for higher price.

The accounts are prepared and presented in HK$, the functional currency. The US$ figures are shown only as supplementary information and are translated at HK$7.8

Major Financial Statement Ratios
1. Profit/loss Margin
| 2009| 2008| 2007| 2006| 2005|
Margin | 7.0%| (9.9%)| 11.2%| 8.0%| 7.4%|
Profit margin indicates the...
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