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Qantas Airways Financial Modelling And Dividend Policy Case Solution

Solution Id Length Case Author Case Publisher
1738 313 Words (2 Pages) Angelo Aspris Ivey Publishing : W18661
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Qantas Airlines was greatly hit by the recession during 2012 and 2013 which adversely affected the company and resulted in it making the greatest loss in its history in 2014. The increase in the number of competitors also placed great pressures on the company to cut costs and to stay competitive. 

Case Analysis for Qantas Airways Financial Modelling And Dividend Policy

Furthermore, its current ratio significantly declined from 0.9 to 0.65 in 2014 which shows that its liquidity position deteriorated. This further placed it in a difficult situation to raise funds from foreign and domestic investors since its rating was downgraded which restricted its options of getting investments to finance its operations to make them cost efficient. Thus it shifted towards debt which raised its debt to EBITDA ratio to 5.1 in 2013 which further increased in 2014. Thus its leverage ratio was high which made it more prone to bankruptcy which again justifies its declining credit ratings. Also, it was involved in share buy backs to give a return to its investors but they were not much attracted by it.

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