Analysis And Investment In British Airways And Carrefour Finance Essay

I am a Thai national people and rarely put the vast of money before in my life except Thailand Government bonds and have been closed with the excess dividend in two old ages ago. Although I ‘m merely pupil and really immature but I besides need to measure the hazard appetency of constitution that I need to cover with. At my immature age of 22 old ages old, I am really dynamic individual and ne’er frighten about investing if I confident to make so under my animal, whether it is a long-run investing but I foresee would be great in term of dividends when I get older.

I have knowledge in air power industry. I used to be clients of air hose and supermarket, British Airways and Carrefour severally. Personally, I decided to go forth some sum of money in the UK bank history say salvaging in short-run period on salvaging history to protect myself in instance of recession. Thus, I invested to Lloyds TSB Bank.

“ Leaving your money in the bank is good because it will increase involvement finally ” ( Eberts, et. Al. 2005 ) . However, if we truly want to gain, it is better to put instead than lodging it to the bank. Although there is a high hazard when you invest, there is besides a high opportunity of gaining. Hence, I decided to look for companies that would be in my best involvement.

In order to make so, I gathered fiscal information of British Airways every bit good as Carrefour prior to my determination of puting to the any of those companies or put to both. Therefore, fiscal high spots of the said company were gathered for analysis.

II. My aspiration against investing

In an investing, there is a hazard whether the money that you invest will finally return or non. Therefore, holding 300,000 US dollars it would be handful to lodge at least 100,000 US dollars to the bank to guarantee that there is an involvement to gain. Since, lbs is much higher currency than dollars, it is advisable to open an history and sedimentation in this currency. If I will put to the bank like in the Lloyds TSB bank ( I ‘m presently holding a salvaging history with them ) , the money that I have will certainly increased in conformity to its involvement.

Table 2.1 Lloyds TSB Bank Interest Rate

Term Deposit – 6 Month Term Deposit

Amount Invested

Annual Option

Monthly Option

AER/Gross %

Internet %

AER/Gross %

Internet %

?10,000+

1.15

0.92

1.15

0.92

?2,000 to ?9,999

1.15

0.92

1.15

0.92

Term Deposit – 3 Year Term Deposit

Amount Invested

Annual Option

Monthly Option

AER/Gross %

Internet %

AER/Gross %

Internet %

?10,000+

4.10

3.28

4.10

3.28

?2,000 to ?9,999

4.10

3.28

4.10

3.28

Beginning: Lloyds TSB Bank

In a short-run sedimentation in Lloyds TSB Bank, puting will increase the money by every bit much as 4.1 % . Having $ 300,000 US dollars in this rate will increase at least $ 12,000 yearly. In some point, it is better to lodge the sum wherein the money will certainly increase in involvement. In few old ages, this will increase by 20 % .

Prior to investing, it is advisable to hold an addition sum prior to investing ( Siciliano, 2003 ) . The cardinal measure in investing is to lodge in a bank, so take a company to put via fiscal analysis, finish the demands to put and so wait until you gain the net income.

III. BA Analysis

When it comes to air hose companies in UK, British Airways is one of the well-known companies. This air hose operated in different continent of the Earth like in America, Middle East and South Asia, Asia Pacific, Africa, and Europe. This air hose company is runing about 150 metropoliss. The company is besides on continues strategic development to farther increase the operation capacity of the company. It latest fiscal study shows how the company is making its concern by the Numberss.

Table 3.1 BA Income Statement ( Source: British Air passages )

A

A

Group

A

Company

? million

A

2009

2008

Restated

A

2009

2008

Restated

Cash flow from operating activities

A

A

A

A

A

A

Operating ( loss ) /profit

A

( 220 )

878

A

( 165 )

862

Operating loss from discontinued operations

A

A

( 2 )

A

A

A

Depreciation, amortization and damage

A

694

692

A

670

672

Operating hard currency flow before working capital alterations

A

474

1,568

A

505

1,534

Motion in stock lists, trade and other receivables

A

32

96

A

( 28 )

89

Motion in trade and other payables and commissariats

A

( 136 )

( 325 )

A

( 132 )

( 276 )

Payments in regard of restructuring

A

( 64 )

( 32 )

A

( 62 )

( 30 )

Cash payment to NAPS pension strategy

A

A

( 610 )

A

A

( 610 )

Payment to DOJ in colony of competition probe

A

A

( 149 )

A

A

( 149 )

Other non-cash motion

A

1

3

A

7

( 32 )

Cash generated from operations

A

307

551

A

290

526

Interest paid

A

( 177 )

( 182 )

A

( 163 )

( 169 )

Tax

A

3

( 66 )

A

26

( 108 )

Net hard currency flow from operating activities

A

133

303

A

153

249

Cash flow from puting activities

A

A

A

A

A

A

Purchase of belongings, works and equipment

A

( 547 )

( 596 )

A

( 528 )

( 592 )

Purchase of intangible assets

A

( 24 )

( 33 )

A

( 24 )

( 32 )

Purchase of portions in associated projects

A

A

( 54 )

A

A

A

Returns from sale of other investings

A

7

A

A

7

A

Returns from sale of belongings, works and equipment

A

5

11

A

10

11

Insurance recoveries for write-down of Boeing 777 aircraft

A

12

51

A

12

51

Purchase of subordinate ( net of hard currency acquired )

A

( 34 )

A

A

( 144 )

( 1,016 )

Cash influx from disposal of subordinate company

A

A

1

A

A

A

Interest received

A

105

117

A

53

123

Dividends received

A

17

3

A

6

4

Decrease in other current interest-bearing sedimentations

A

202

458

A

356

1,238

Net hard currency used in puting activities

A

( 257 )

( 42 )

A

( 252 )

( 213 )

Cash flows from funding activities

A

A

A

A

A

A

Returns from long-run adoptions

A

377

172

A

377

172

Refunds of adoptions

A

( 66 )

( 68 )

A

( 55 )

( 57 )

Payment of finance rental liabilities

A

( 402 )

( 356 )

A

( 411 )

( 355 )

Exercise of portion options

A

1

4

A

1

4

Dividends paid

A

( 58 )

A

A

( 58 )

A

Distributions made to holders of ageless securities

A

( 17 )

( 14 )

A

A

A

Net hard currency used in funding activities

A

( 165 )

( 262 )

A

( 146 )

( 236 )

Net lessening in hard currency and hard currency equivalents

A

( 289 )

( 1 )

A

( 245 )

( 200 )

Net foreign exchange differences

A

8

( 29 )

A

31

( 29 )

Cash and hard currency equivalents at April 1

A

683

713

A

433

662

Cash and hard currency equivalents at March 31

A

402

683

A

219

43

Harmonizing to its one-year study, the company has a entire gross ?8,992m in 2009 compared to ?8,758 last 2008. However, when it comes to loss before revenue enhancement, the company suffered a gross loss of ?401 million from its 2008 to 2009 operation as compared ?922 million prior to the given twelvemonth. On the contrary, when it comes to runing loss, the company was able to cut down operating loss to ?220 million as compared to its ?878 prior to the given twelvemonth.

Table 3.2 BA Balance Sheet ( Source: British Air passages )

A

A

Group

A

Company

? million

A

2009

2008

Restated

A

2009

2008

Restated

Non-current assets

A

A

A

A

A

A

Property, works and equipment:

A

A

A

A

A

A

Fleet

A

5,996

5,976

A

5,805

5,794

Property

A

971

977

A

920

924

Equipment

A

266

310

A

258

301

A

A

7,233

7,263

A

6,983

7,019

Intangibles:

A

A

A

A

A

A

Good will

A

40

40

A

A

A

Landing rights

A

205

159

A

163

159

Software

A

22

22

A

22

22

A

A

267

221

A

185

181

Investings in subordinates

A

A

A

A

2,356

2,207

Investings in associates

A

209

227

A

A

A

Available-for-sale fiscal assets

A

65

80

A

27

24

Employee benefit assets

A

340

320

A

340

320

Derivative fiscal instruments

A

3

51

A

3

51

Prepayments and accumulated income

A

25

19

A

9

9

Entire non-current assets

A

8,142

8,181

A

9,903

9,811

Current assets and receivables

A

A

A

A

A

A

Inventories

A

127

112

A

125

109

Trade receivables

A

530

586

A

517

574

Other current assets

A

268

308

A

382

371

Derivative fiscal instruments

A

40

241

A

40

241

Other current interest-bearing sedimentations

A

979

1,181

A

43

399

Cash and hard currency equivalents

A

402

683

A

219

433

A

A

1,381

1,864

A

262

832

Entire current assets and receivables

A

2,346

3,111

A

1,326

2,127

Entire assets

A

10,488

11,292

A

11,229

11,938

Stockholders ‘ equity

A

A

A

A

A

A

Issued portion capital

A

288

288

A

288

288

Share premium

A

937

937

A

937

937

Investing in ain portions

A

( 9 )

( 10 )

A

( 9 )

( 10 )

Other militias

A

430

1,847

A

10

1,444

Entire stockholders ‘ equity

A

1,646

3,062

A

1,226

2,659

Minority involvement

A

200

200

A

A

A

Entire equity

A

1,846

3,262

A

1,226

2,659

Non-current liabilities

A

A

A

A

A

A

Interest-bearing long-run adoptions

A

3,074

2,751

A

3,333

2,971

Employee benefit duties

A

191

330

A

182

322

Commissariats for deferred revenue enhancement

A

652

1,075

A

592

1,017

Other commissariats

A

256

210

A

215

185

Derivative fiscal instruments

A

123

4

A

123

4

Other long-run liabilities

A

204

168

A

169

132

Entire non-current liabilities

A

4,500

4,538

A

4,614

4,631

Current liabilities

A

A

A

A

A

A

Current part of long-run adoptions

A

689

423

A

689

421

Trade and other payables

A

2,796

2,875

A

4,045

4,036

Derivative fiscal instruments

A

471

20

A

471

20

Current revenue enhancement payable

A

4

4

A

4

3

Short-run commissariats

A

182

170

A

180

168

Entire current liabilities

A

4,142

3,492

A

5,389

4,648

Entire equity and liabilities

A

10,488

11,292

A

11,229

11,938

As an investor, you are most likely interested to cognize the basic loss per portion. The company suffered 32.6 pence basic loss per portion but gained 61.9 net incomes per portion. There is about 1 is to 2 ratio between the loss and net incomes of rudimentss per portion. Likewise, looking at the overall public presentation of the company from its web, the company public presentation of 53 % Network-wide Ready to Travel compared to the old twelvemonth with merely 34 % .

Looking at the company high spots, it is rather considerable to put in this company cognizing that the company is really competitory in the air hoses industry. With the continuity of strategic development, there is no uncertainty that this company will sooner or subsequently derive the top of the competition.

IV. Carrefour Analysis

If there are competitory industries to dispute for, the retailing industry is one of the interesting sectors to analyze. Wal-mart ( ASDA ) is the leader among the retail shops in the universe. However, there is strong rival that is seeking to maintain in measure with Wal-mart, and that the Carrefour. This company, which means hamlets, is really active in food markets, ware every bit good as services. Overall, the company operates for 15,400 shops in different names, from hypermarket, supermarket, convenience shops, and price reduction shops and from any types of shops that you could believe of. Overall, the company extended its operation for approximately 30 states in different continent of the universe.

Figure 4.1 and 4.2 Net Income from Procuring Operations Group Share and Earnings per Share4

Reviewing its fiscal high spots, the company was able to make 86,967 million Euros in 2008 as compared to 82,148 1000000s Euros in 2007. Despite of the addition, the company ‘s net income from repeating operations Group decreased from 1,868 million Euros in 2007 down to 1,256 million Euros in 2008. This affects the net incomes per portion for the stockholders wherein the 2008 net incomes per portion besides decreased from 2.67 in 2007 to merely 1.83 net incomes per portion in 2008.

Figure 4.2 Carrefour Amalgamate Net Gross saless

From the stockholder ‘s position, it is dismaying that the net incomes per portion by about 25 % from 2007 to 2008. However, if we look at the type of industry, this is still a competitory industry to put. Personally, the decreased may be because of the economic recession wherein people are seeking to salvage every bit much as they can but still the company managed to hold positive net incomes.

V. Comparison and determination devising

With all the fiscal information on manus, I ‘m now ready to compare to what extent that the other company have the advantage to do a determination for investing. Looking at the physical characteristics of the two companies, they are runing in different industry. British Airways is runing for air hoses industry while Carrefour is for retailing sector. In footings of demands, we all by and large know that people travel fastest in the air that is why they are taking the air hoses ( Keuleneer, et. Al. 2001 ) . On the other manus, Carrefour provides day-to-day demands of the people with the merchandises they are offering. In add-on, both companies are strategically located at different continents.

The best manner to make up one’s mind to put is through the return of investing in conformity to their fiscal public presentations ( Chorafas, 2000 ) . Consequently, British Airways has increased gross in 2009 by 2.6 % . On the other manus, Carrefour managed to increased gross revenues in 2008 by 5.5 % . There is a somewhat difference in the increased of gross. Looking at the net incomes per portion, British Airways ‘ stockholders are happy to derive over loss basic portions, 61.9 pence over 32.6 pence. On the other manus, despite of the net incomes in 2008, Carrefour has a high lessening in the net incomes for per portion.

“ British Air passages suffered from operating loss despite of the increased in portions. Operating loss was non been highlighted by the Carrefour knowing that this was in their advantage. The operations public presentations of the two companies are rather singular despite of the recent recession ” .

VI. Decision

British Airways public presentations over the old ages is singular even though different industries in the universe suffered from recession which as felt by the Carrefour. Despite of this, the company has some losingss particularly in the operating loss. Carrefour on the other manus is still able to acquire an increased in net incomes per portion. This is a good point for Carrefour cognizing what they have assortment of goods and services to offer.

In taking the company to put, the Numberss is rather of import to make up one’s mind where to set your money. If you see there is no net incomes it will convey it is better to set it in the bank. However, with these two companies, it is of import to observe that there is really promising net incomes delaies. Both companies are in demand with the merchandises and services they are offering hence that the hazard of non gaining is really low.

From the Numberss that I have, it is more advantageous to put in British Airways. The company has a strategic development that is apparent in the company. Then once more, we can non ignore Carrefour, because as can be seen from all of information, it has a great trade of advantage when covering with recession since it has a assortment of merchandises and will non wholly be affected when any recession arise.