Compare two public Australian companies in a similar industry namely, Qantas (https://www.qantas.com/travel/airlines/about-qantas/global/en) and Virgin Australia Holdings (www.virginaustralia.com). This means that the companies are listed on the Australian Securities Exchange (www.asx.com.au) and their annual reports can be downloaded from the ASX or company web-sites.
a. For each company, prepare a table summarising three years of financial statements (the income statement, balance sheets and cash flow statements) and prepare a ratio analysis of each company’s financial position and performance. Submit this as an Appendix with your assignment (10 marks)
b. Report #1: Based on the financial statements and the ratios you have calculated, prepare a report to the board of directors of one of the two companies, outlining relevant risk and return issues and offering any recommendations you feel are appropriate. (Maximum of 750 words) (20 marks)
c. Report #2: Your sister has no knowledge of accounting but wants to start investing in the share market. She asks you whether she should invest in one or both of the companies you analysed. Compare and contrast the two companies, drawing on the financial statements, the ratios you have calculated and any other relevant information you have found, to identify and explain whether your sister should (or should not) invest in one or both of the companies. (Maximum 500 words)
More about this task:
The paper will include a comparison of two public Australian companies which include Qantas and Virgin Australia Holdings. This will be achieved by providing a summary of three years of financial statements as well as a ration analysis of each company. The will include a report that outlines the relevant risk and returns issues based on the financial statements of one company. Recommendations will be provided where appropriate. The last part of the paper will include exploration for probability of investing in Qantas or Virgin Australia Holdings or both of the companies. The arguments and conclusions in the investment choice will depend on the financial statements provided by the two companies.
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