Question 5 The following table reports various financial ratios for Qantas Airways and Virgin Australia for...
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Question 5 The following table reports various financial ratios for Qantas Airways and Virgin Australia for 2018. Qantas Airways Return on Equity (ROE) Return on Assets (ROA) Profit Margin Current ratio Debt ratio 26.14% 5.44% 5.74% 0.49 54.53% Virgin Australia -48.96% 1.74% -12.56% 0.78 70.11% Required: (a) Based on the ratios provided above, comment on Qantas Airways' profitability by comparing to Virgin Australia. (5 marks, maximum 140 words) (b) Explain why Virgin Australia's ROA is positive, while its ROE is negative? (4 marks, maximum 120 words) (Total: 9 marks) Question 5 The following table reports various financial ratios for Qantas Airways and Virgin Australia for 2018. Qantas Airways Return on Equity (ROE) Return on Assets (ROA) Profit Margin Current ratio Debt ratio 26.14% 5.44% 5.74% 0.49 54.53% Virgin Australia -48.96% 1.74% -12.56% 0.78 70.11% Required: (a) Based on the ratios provided above, comment on Qantas Airways' profitability by comparing to Virgin Australia. (5 marks, maximum 140 words) (b) Explain why Virgin Australia's ROA is positive, while its ROE is negative? (4 marks, maximum 120 words) (Total: 9 marks)
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Solution a Profitability position of Qantas Airways and Virgin Australia Qantas Airways shows a prof... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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