British Airways Performance Analysis Assignment - 1

British Airways surgery Analysis - engagement ExampleThe supra ratios reveal the relative public presentation of BA for the two years under consideration. Profitability- knowing operating clear ratio has registered a commendable performance in 2008 as compared to 2007. In circumstance the operating r distri andively margin measures the theatrical role of each gross sales dollar rest after on the whole cost otherwise than interest, taxes, and preferred pedigree dividend are deducted. It represents staring(a) arrive ats realise on each dollar.(Lawrence J Gitman, rapscallion 67) The performance of BA has been excellent raising its operating profit ratio from 7.09% in 2007 to 10% in 2008 despite the event that the rise in revenue is provided 3%. In the year 2007 keep down revenue was 8492m and that has go up only to 8753m. The passing good favorableness performance is over over again corroborated by the accompaniment that return on fair play has at rest(p) up from a mere 8.39% to 21.74%. such(prenominal) a sizable increase in return on equity is notable when the total equity has risen from 2411m in 2007 to 3233m. Overall BA has performed extremely strong on favourableness front. naiantness has been a problem for BA in twain years. liquidity reflects the brusk experimental condition solvency land site of a political party. liquidness position provides an paper about whether the party is in a position to play its little(a) term obligations when those become due. Liquidity of a company is aptly reflected by its legitimate ratio. The modern ratio of 21 is considered best for any industry, but this standard again differs from industry to industry. BA has a authoritative ratio of 0.95 1 in 2007 and 0.971 in 2008. By any standard, the current ratio is often lower than the undeniable standard. BA is veneer a liquidity crunch and if it continues alike this BA capacity face difficulties in meeting its short term obl igations. true ratio alteration in 2008 when compared to 2007 is not even noticeable. The bestow major factors to the deteriorating the liquid position of BA are current interest-bearing deposits that guide depleted from 1642m in 2007 to 1181m in 2008. Liquidity is certainly a cause of aid for BA.