Financial Analysis of Tui Travel Plc in the Year 2009

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Financial analysis

Assignment Title-Analysis of the annual report of HUI Travel Plc during the years 2009 &2008


The main aim of this assignment is to analyse the Annual report and Financial accounts of TUI Travel PLC and to compare the companies overall performance with its competitors (Thomas Cook Plc) of the years 2009and 2008 using the process called Ratio Analysis. Ratio analysis acts as powerful tool in analysing and interpreting the financial statements of a company. Ratios help as to find the relationship between different items appearing in the financial statements of a company. They are also used in examining various aspects of financial position and performance and are widely used for planning and control purposes (Peter Atrill, 2007 p-49) OVERVIEW AND STRUCTURE OF TUI TRAVEL PLC

TUI Travel PLC was formed in 3rd September 2007 by the merger of First Choice Holidays PLC and the tourism division of TUI AG.TUI is worlds leading travel leisure Company operating in more than 180 countries and handling 30 million customers a year. The company operates under 200 brands. Some well known brands of TUI are Thomson,Hayes&Jarris and Turchese.The whole management of TUI is organised and managed through four sectors-Mainstream(Northern ,Western and Central Europe),Activity Sector(Marine, Adventure, Ski, Student and Sport) Specialist and Emerging markets (Specific destinations and premium travel experiences), Accommodation and Destinations sector (travel agents and corporate clients). It is the only leisure travel company listed on the London Stock Exchange in the FTSE100. OBJECTIVES OF TUI Travel plc

* Making travel experiences special by providing TUI customers flexible and a wide range of travel choices which none of its competitors can provide. * Create an international database among TUI customers in order to support its sustainability and communication strategy. For achieving these goals better consumer understanding is needed about: I. Environmental impacts of holiday travels

II. The practice of sustainable holidays and willingness and barriers for booking. III. Credibility of ‘Green messages ‘in both private and public sector. * Continue as the global leader in tourism industry by various acquisitions and mergers and to cut the cost and expanding its business in to emerging markets. * In order to integrate more in to packaged holidays TUI will acquire companies Conducting local sight seeing

* Apart from concentrating on conducting tours TUI will use its skilful engineers to build leisure centres and shopping malls. * TUI is planning to widen its business in Africa and Australia to attract more customers. * Creating more innovative ideas to perform well in their under performing areas. One of the main objectives of TUI is protecting the environment during its business..Each year the company put some environmental and sustainability targets to its employees to reduce the pollution. RATIO ANALYSIS

In this assignment I used ratio analysis as the tool for calculating my company’s performance. Ratio analysis uses four methods depending upon the financial position of the company to measure its performance such as: 1. Profitability Ratio

2. Working capital position or Efficiency Ratio
3. Liquidity Ratio
4. Long Term Solvency Ratio
Profitability ratio
In order to measure the profitability of a company we need to relate its profits to sales, equity or stock value.Probitabilty ratios measures how a company is using its resources to make maximum profit and how well it is managed. The main profitability ratios are Return on Capital Employed (ROCE), Gross profit margin and net profit margin. (Lawrence J. Gitman, Carl McDaniel 2008, p-393) RETURN ON CAPITAL EMPLOYED The return on capital...
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