TOPIC: Financial Statement Analysis CHAPTER LINK: Chapter 5 Fly-By-Night International Group: Can This Company Be Saved? Douglas C. Mather‚ Founder‚ Chairman‚ and Chief Executive of Fly-By-Night International Group (FBN)‚ lived the fast-paced‚ risk-seeking life that he tried to inject into his Company. Flying the Company ’s Learjets‚ he logged 28 world speed records. Once he throttled a company plane to the top of Mount Everest in 3 1/2 minutes. These activities seemed perfectly
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Fly By Night Fly By Night International was founded by Douglas C. Mather in the mid 1970’s. He started the company as a pilot training school. Then he branched out into government contracting. He used his “rent-an-enemy” fleet to the Navy and Air Force for use in fighter-pilot training. The company experienced great success during the first five years of its operations and the stock price almost doubled. However‚ in year 14 the company started a rapid descent. The company did not have enough
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Fly-By-Night International Group: Case Study After reviewing Fly-By-Night International Group’s financial statements there was a lot of evidence that signaled the cash flow problems experienced in mid-year 14. The first problem I encountered was the company’s accounts receivable had steadily increased‚ rising faster than sales from year nine through year 14. The inventories also increased during the same time period. When accounts receivable is rising faster than sales it indicates that Fly-By-Night
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\ a. What evidence can you observe from analyzing the financial statements that might signal the cash flow problems experienced in mid-Year 14? There are a few factors that attributed to the cash flow problem in year 14. First‚ one of the most important areas that shows how liquid of a position a company has is by analyzing the difference in the current ratio and quick ratio over a period of time. The current ratio is current
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Option A Yr 10 ($) Yr 11($) Yr 12 ($) Yr 13 ($) Yr 14 ($) Yr 15 ($) Yr 16 ($) Yr 17 ($) Yr 18 ($) Yr 19 ($) Yr 20 ($) Yr 21 ($) Yr 22 ($) Yr 23 ($) Yr 24 ($) Cost of planes 0.00 0.00 80‚000‚000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Revenue 150‚000‚000.00 157‚500‚000.00 165‚375‚000.00 185‚220‚000.00 194‚481‚000.00 204‚205‚050.00 214‚415‚302.50 225‚136‚067.63 236‚392‚871.01 248‚212‚514.56 260‚623‚140.28 273‚654‚297.30 287
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Introduction Question 1 Question 2 Question 3 Case Study 2 (Fly – by – Night Airlines) Introduction Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 4 4 6 7 8 10 10 11 12 13 15 15 15 4.0 Conclusion and Recommendation 15 5.0 Bibliography 16 6.0 Declaration by Student 17 1.0 EXECUTIVE SUMMARY This assignment consists of two case studies‚ the Simpson and Selph Ltd and the Fly – by – Nights Airlines. Case Study 1: The Simpson and Selph Ltd‚ a small
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page 3 4. Accounting data Number of planes page 4 Ticket revenue page 4 Operating Cost page 5 Deprecation page 5 Operating cash flows page 5 NPV page 5 5. Evaluation page 6-7 6. Appendix Introduction Fly-by-night Airlines is a major commercial
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that the collectability of the accounts receivables was problematic. It seemed as if Fly-by-Night had a good system of collecting their sales on account from year 9 to year 10 as the accounts receivable number decreased during those years. However‚ the accounts receivable account increased by more than six times through years ten and fourteen. Because of this poor system of collecting accounts receivable‚ Fly-by-Night’s cash flow would suffer. The same can be said about the inventory account.
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Fly-By-Night case 1. The biggest evidence I found about Fly-By-Night’s cash flow problems while looking at its financial statements was the reckless expenditures on fixed assets compared to their sales. As we can see‚ cash flow from investing went from ($5‚437) to ($52‚879) to ($34‚260) between the years 12‚ 13 and 14‚ while cash from operation went from $2‚110 to $16‚902 to $9‚883 between the years 12‚ 13 and 14. Even though there were large increases in long-term borrow during that time‚ long-term
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A). When looking at the balance sheet‚ the first noticeable signal among assets is the rapid increase in accounts receivable in years 12‚ 13‚ and 14. It means that there are more products sold in credit than in cash and direct useable funds. Another signal is the sudden increase in inventories in years 12‚ 13‚ and 14. The previous three years‚ inventories slightly decreased. Only from year 11 to year 12 inventories almost triples and keeps increasing significantly the next two years. It shows there
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