We as financial consultants decided to pick 3 law cost airlines as a result a number of people flying more and more today and this industry will grow. This industry should be good for investment. Profitability
Total revenue in 2011 was £3.452 million and grew by 16.8% in compare to 2010. This was achieved despite a significant increase in passenger taxes and economic instability around the world. This is a very healthy figure which might grow within the next years as a result of more and more people flying by budget airlines and positive image of Easyjet. Net profit also significantly increased by 60.8 % comparing to last year which is a healthy figure and mainly a result of improved total revenue figure and can result in any future investments in order to generate more profits. Return on capital employed increased by 3.9 percentage points to 12.7 driven by improved levels of profit. It shows that shareholders earnings are not at risk and the rate is higher than companies borrowings. Liquidity
Current ratio of 1.47 stayed the same since last year and tends to be satisfactory. Quick ratio improved since last year and also satisfactory. It shows that Easyjet is on good financial strength and shows that this company capable of paying its obligations. Efficiency
For every £1 of net assets, Easyjet generates £2.02 of sales revenue which is a good result and competitive against other airlines. Debtor days improved since last year and Easyjet tends to convert credit sales into cash slightly quicker. Creditor days on the other hand tend to be law however slightly higher than debtor days and showed an improvement since last year by 3,65 days. This means that Easyjet pays to their creditors after they collect the debts from their debtors. Gearing
Gearing or leverage remains law at 28% and went down from last year by 4%. This figure shows that Easyjet does not have significant debt behind them and shows that Easyjet is financially strong. Interest cover...
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