Ryanair Company Financial Analysis Report

Ryanair Company Financial Analysis ReportRyanair is an Irish air lane business company which was launched in 1985 by Ryan family in Dublin. It is the first low-f be airline in European nations. likewise it is considered as most successful airline in terms of benefit. In addition, it is excessively famous for number of flights and passengers flown. Moreover its business is expanded to 44 bases, more than 1200 routes, 160 airports and 27 countries.Ryanair Holding Private limited company is leading curriculum airline in Europe. The aim of this report is to use economic managing formula to give a general idea of Ryanair Holding Plc. It has well financial vex in direct to help another company to provide. In this report, given over many information of different companies guide to improve the financial position and grooving of managing power of the organization. besides it can utilitarian to give forecast development and future danger difficulty.In recent time, there was a big ev ents happened in the company. Which is effecting on companys profit and passing game account that given in the report. So proportionality analysis is very important to improve companys financial situation. After the balance analysis given some recommendations can help to improve organizations strength and growth and also to make batter financial position of the company.BACKGROUNDEuropes biggest financial budget airline is mane of Ryanair Holding plc. It has gone a very high distance in space journey a service in the UK. It is follow to operate on the basis of Southwest Airlines system. These airlines always create travel to twice or triple on the way it comes. In this airline, 7m passengers utilize to fly in a year. Uses of internet which helped mover slice expenses of the sharing part.In the commencement, Decan, Cathal and Shane Ryan established Ryanair with 1m from their father, Dr. Tony Ryan, chairman CEO of Guinness Peat Aviation, the aeroplane letting huge. Ryanair made r outes betwixt Ireland and United Kingdom at starting of flying in June 1985. Entering in Dublin-London area the after that spring, finishing with British Airways and Dan Air moreover Aer Lingus. (www.fundinguniverse.com).In 2009 Ryan airs common cost per traveller was EUR 36 as compared as to EUR 68 for its curve rival Easyiet. From the years of 2007 to 2009 Ryanair arranged low cast to passengers by 13%. Ryanair has raised its numbers of passengers by 14% in 2010 and made more routes. This growth will continue next years. (www.ryanair.com).ANALYSISINTRODUCTION OF RATIOS AND IMPORTANCESproportions are mostly used as a part in understanding of financial statements. The selected symmetrys and finding info which are depend on the requirement of the data which are using. When the share price is reach on its higher level, at that situation want to do and choose the very good condition to consider shares. Due to this, the investors will control the performance of organization.Mostly t he ratios could be designed from the data given by the financial statements. It is used in evaluate trend. Also it is used to make balance of the financial condition to select of other condition. The ratio analysis may be used in some flake of future bankruptcy. (www.netmba.com).RATIOS ANALYSISFirstly, in the ratios analysis classified different types which depend on given information. Most important types are given below,Financial ratios gainfulness ratiosFinancial ratiosCurrent RatioThe received ratio is specify as the ratio of authoritative assets to current liabilitiesCurrent Ratio = Current Assets / Current Liabilities old age201020092008Current Assets2,725,5152,360,0591,898,175Current Liabilities1,378,6831,279,9351,238,204Current ratio1.981.841.53AnalysisThe relation amidst current assets and current liabilities is given in this ratio analysis.Assets is only transformed raise in cash for little period and cash are included in current assets. The ratio was 1.53 in 2008 bu t after that 1.84 and 1.98 in 2009 and 2010 respectively. It is useful for quality as well as quantity in financial analysis. liquid RatioLiquidity ratios give the data about an organizations capability to join forces its the short term requirements of finance. To the organization, they are take part in interest of that extends small period acknowledgment to the organization.It is define as the ratio of current assets to current liabilitiesLiquidity ratio = Current Assets / Current LiabilitiesAlso in some case,Liquidity Ratio = (Current Assets-Inventory) / Current LiabilitiesYears201020092008Current Assets2,725,5152,360,0591,898,175Current Liabilities1,378,6831,279,9351,238,204Liquidity Ratio1.981.841.53AnalysisIt is helpful to known for relationship between current assets and current liabilities. In the comparison of last three, the ratios of the organization were 1.53, 1.84 and 1.98 in 2008, 2009 and 2010 respectively. So ratios were increased when passed the years.Shareholders Liquidity RatioIt shows the relation between shareholder funds and long term debt.It is the defined as the ratio of shareholder funds to long term liabilitiesShareholders indebtedness Ratio = shareholders funds / shareholders liabilitiesYears201020092008Shareholders Funds2,534,4072,250,5371,989,677Long Term Liabilities2,816,0872,388,2491,803,617Shareholders Liabilities Ratio0.900.941.10AnalysisIn this analysis, ratios were decreased when passing the years. Those ratios were 1.10, 0.94 and 0.90 in 2008, 2009 and 2010 respectively.Gearing Gearing is defined as the long term liabilities plus overdraft to shareholders funds in percentage. It shows organizations permanents assets shareholders money and fully loan of it. The higher geartrain means good borrowed money to self.It is mensurable by following formulaGearing (%) = (Long Term Liabilities + Overdraft) - 100 / Shareholders FundsYears201020092008Long term liabilities + Overdraft2,816,087+236,2162,388,249+188,3361,803,617+291,670Sha reholders funds2,534,4072,250,5371,989,677Gearing120.43114.49105.31AnalysisIn the gearing ratio analysis, ratios were increase when passing the years. Those ratios were 105.31, 114.49, and 120.43 in 2008, 2009 and 2010 respectively.Working Capital Per Employee(Unit)It is defined as the ratio of working capital to number of employees and it is calculated by given formula in bellow,Working capital per employee = working capital / number of employeesYears201020092008Working capital95,36782,41474,042Employee703263695262Proportion-13,563-12,940 14,071AnalysisIn this analysis, ratios decreased between 2008 and 2009 and then increased between 2009 and 2010. Those ratios were -14.071, -12,940 and -13,563 in 2008, 2009 and 2010 respectively. turn a profitability RatiosProfitability ratios give many different method of the achievement of the organization at make profits.Profit MarginIt is defined as the ratio of profit before tax to turnover in percentage. Throughout the year scope in success on sells will differ since business to business. The reasonably change of the proportion in investigate and sometime may be stable. Purpose for vary could be deal sells worth or growing in the sales rate.It is calculated by formula which is given bellowProfit Margin = (Profit before tax) - 100 / employee turnoverYears201020092008Profit before tax303,389-167,498349,023Turnover2,658,5212,730,2412,157,958Profit margin11.41-6.1316.17AnalysisIn this analysis shows company failed in loss after 2008. Those ratios were 16.17, -6.41 and 11.41 in 2008, 2009 and 2010 respectively. buckle under on shareholders fundsIt is defined as the ratio of profit before tax to shareholders fund and it is given by following formula hap on shareholders funds (%) = (Profit or Loss before Tax) - 100/ Shareholders FundsYears201020092008Profit or loss before tax303,389167,498349,023Shareholders funds2,534,4072,250,5371,989,677 come down on shareholders funds (%)11.97-7.4417.54AnalysisIn this analysis shows, c ompany faced loss in 2009 financial year. Those ratios were 17.54, -7.44 and 11.97 in 2008, 2009 and 2010 respectively. translate on total assets (%)It is defined as the ratio of profit or loss before tax to total assets in percentage. Also it is calculated by following formulaReturn on total assets (%) = (profit or loss before tax) - 100 / total assetsYears201020092008Profit or loss before tax303,389167,498349,023Total assets6,729,1785,928,14,1475,031,497Return on total assets4.51-2.836.94AnalysisCompany faced loss in 2009 financial year in this analysis. Those ratios were 6.94, -2.83 and 4.51 in 2008, 2009 and 2010 respectively. gratify controlInterest cover is the ratio of profit or loss before interest to interest paid. Calculation is given by following formulaInterest cover = profit or loss before interest / interest paidYears201020092008Profit or loss before interest36,53646,349426,225Interest paid64,148121,14977,202Interest cover5.73-0.385.52AnalysisIn interest cover ratio analysis shows loss in 2009. Those ratios were 5.52, -0.38 and 5.73 in 2008, 2009 and 2010 respectively.Debtors TurnoverDebtors turnover is defined as the ratio of turnover to trade debtors. Its calculation is given belowDebtors turnover = turnover / trade debtorsYears201020092008Turnover2,658,5212,7157,9582,157,958Trade debtors39,41438,78327,177Debtors turnover67.4570.4079.40AnalysisIn this analysis, ratios were 79.40, 70.40 and 67.45 in 2008, 2009 and 2010 respectively.Ratios decreased when passing after the years.Net assets turnoverNet assets turnover is defined as the ratio of turnover to total assets less current liabilities. Also it is calculated by following formulaNet assets turnover = turnover / total assets less current liabilitiesYears201020092008Turnover2,658,5212,7157,9582,157,958Total assets less current liabilities5,350,4944,648,2123,793,294Net assets less current liabilities0.500.590.57AnalysisIn this analysis indicates ratios decreased in 2010. Those ratios were 0.5 7, 0.59 and 0.50 in 2008, 2009 and 2010 respectively. flash-frozen assets turnoverFixed assets turnover is defined as the ratio of turnover to fixed assets. It is calculated by following formulaFixed assets turnover = turnover / fixed assetsYears201020092008Turnover2,6558,5212,730,2412,157,958Fixed assets4,003,6623,568,0873,133,322Fixed assets turnover0.660.770.69AnalysisIn this analysis shows ratios increased in 2009 and then decreased in 2010. Those ratios were 0.69, 0.77 and 0.66 in 2008, 2009 and 2010 respectively.The pertain of eventsThe events of the company were flight cancellations by volcanic ashes during18 days in between April May in 2010 and ATC (Air Traffic Controller) strike during the year of 2010.During April May, cancellation of 9400 flights, so cost of company was 32m and deletion of 1400 flights and more than 12000 flights late, so the loss may be 32mThose two events had main impact of 100m loss in six months.ConclusionsIn conclusion, Ryanair Holding plc is lo w make out and biggest financial budget airline in the world. It has 160 airports, 44 bases business to expanded, more than 1200 routes and 27 countries. It is known as most successful airline in terms of profits, flights numbers and flown of passengers. During the ratio analysis, this company has good financial position in terms of profit, but in 2010 events occurred by volcanic ashes and ATC strike. Due to evens, cancellation of 9400 flights mare than 12000 flights delayed. So events had an major impact of 100m loss in that 6 months. Also those are affected on companys profit and loss account and net profit of Ryanair Holding plc.RecommendationsRyanair holding plc has stiff period in last year, as the organization was making loss. Now Ryanair is reverse to good position by building profit in the starting of this year. in the analysis their revenues are well financial position in last year but the events were create some effects. It is one of biggest Irish airline in the UK as we ll as in the world. After making some change in tickets and facilities, it can become more low fare airline and improve its financial position batter than past. It is the recommended part to be Ryanair airline so its future opportunity is bright batter than past situation.