Qantas Airways Financial Modelling And Dividend Policy Case Solution

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.