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Case Study: Qantas Add in library

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Questions:

Part A

Review the statement of cash flows for the most recent year and indicate the following:

a) net cash inflow (outflow) from operating activities
b) net cash inflow (outflow) from financing activities
c) net cash inflow (outflow) from investing activities
d) net increase (decrease) in cash during the year

Analyse the Cash Flow Statements for the last 2 years and comment on the cash position of the company.

Part B

Review the stockholders' equity section in your chosen company's most recent year-end balance sheet and compare that with the previous year-end balance sheet. Compare percentage increase or decrease.

List the stockholders' equity account balances and number of outstanding shares from these two balance sheets and compute the increase or decrease for each during this past year.
 
 

Answers:

Part A

a) Net Cash Inflow/Outflow from operating activities

It can be observed from the cash flow statement of Qantas from 2012-2013 that net cash generated from operating activities in 2013 is $1417 million whereas in 2012 it was $1810 million. Thus it can be concluded that Qantas more cash in 2012 than in 2013. Moreover, the interest received by the company is higher in 2012 that is $170 million against 2013 that has $110 million. On the other hand, the cash payment in the course of operation is way higher to $15185 million in 2013 which was lower in $14795 million (qantas.com.au, 2015).

b) Net Cash Inflow/Outflow from investing activities

From the investing activities, it can be understood that total cash used is more in 2012 that is $2282 million which is down in 2013 to $1045 million. On the other hand, the payment made for plant, property, equipment and intangible assets is higher to $2129 million in 2012 whereas payment made in 2013 is low to $1247 million (Reuters.com, 2015).

c) Net Cash Inflow/Outflow from financing activities

In the financing activities section, it can be found that in 2012, Qantas generated net cash of $370 million whereas in 2013 the company used cash to $953 million. Therefore, it can be concluded that performance of the company was better in 2012 than in 2013. The repayment of borrowings is way larger in 2013 to $1494 million in comparison to 2012 that has only $566 million. On the other hand, proceeds from sale and leaseback were higher in 2012 to $283 million against 2013 that has $83 million.

d) Net Increase/Decrease in cash during the year

It can be seen from the cash flow statement that Qantas registered more decrease in their net cash in 2013 to 2829 million whereas in 2012, the company had 3398 million.

 

Part B

It can be noted from the balance sheet of Qantas is that the total shareholder in 2013 is $5954 million whereas in 2012, it was $5889 million. Therefore, it can be concluded that shareholder’s equity is lesser in 2012 against 2013. The equity has been increased by 1.09 percent. The issued capital of the company was $4729 million in 2012 whereas issued capital in 2013 was $4693million but the retained earnings of the company is higher in 2013 to $1171 million. On the other hand, the retained earnings were $1162 million for the year of 2012 (Gurufocus.com, 2015).

Apart from that, the number of outstanding share of the company in 2013 was $2265 million whereas in 2012, the outstanding share was $2368 million. Therefore, it can be considered that company was able to decrease their outstanding share in 2013. The company was able to reduce by 4.54% outstanding share. It can be found out that the company bought back the shares from 2012 to 2013 (ltd, 2015). Therefore, it can be analyzed that almost $36 million shares was brought back in 2013 and due to that balance of equity at the end of 2013 was higher.

 

References

Gurufocus.com, (2015). Qantas Airways Ltd (ASX:QAN) Shares Outstanding. [online] Available at: https://www.gurufocus.com/term/Shares+Outstanding/ASX:QAN/Total%2BShares%2BOutstanding/Qantas%2BAirways%2BLtd [Accessed 30 Jan. 2015].

ltd, q. (2015). QANTAS AIRWAYS LTD (QAN:Australian Stock Exchange Ltd): Stock Charts - Businessweek. [online] Businessweek.com. Available at: https://www.bloomberg.com/research/stocks/charts/charts.asp?ticker=QAN:AU [Accessed 30 Jan. 2015].

qantas.com.au, (2015). Qantas: Annual Report. [online] Available at: https://www.qantas.com.au/infodetail/about/investors/2013AnnualReport.pdf [Accessed 30 Jan. 2015].

Reuters.com, (2015). Qantas Airways Ltd (QAN.AX)  Financial Statement | Reuters.com. [online] Available at: https://www.reuters.com/finance/stocks/incomeStatement?stmtType=BAL&symbol=QAN.AX [Accessed 30 Jan. 2015].

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