FANANCIAL ACCOUNTING

Leanway

来自某欧洲工商界学院的关于具体公司的财务方面的分析，哪位家人有兴趣吗？ ------------------------------------------------------------------

Instructions

Go to the securities exchange commission website: www.sec.gov click on "search for company filings" Click on "companies and other filers" Enter in the CIK box the number 27904 Locate the company’s latest 10K and the latest 10Q prepare a 2 page report which answers the following questions, quote figures from the company’s statements to support your answers.

1. Profitability Is this a profitable company? Has it been profitable in the recent past? Do you think it will be profitable in the near future? Based on last year’s 10k and this year’s latest 10Q, how much do you estimate net income will be this year?

2. Solvency Is this company solvent? What is its liquidity position? Is it generating cash?

3. Business factors What are the main business risks this company faces? Look at the company’s statistical summary and recent revenue trends: what do these figures tell you? Look at the company’s own website; does this give you any additional useful information?

[此贴子已经被作者于2005-11-15 9:38:53编辑过]

Leanway

再次强烈建议家人接触和讨论现实的公司/管理方面的英语材料，这样对学习和工作都有很大的好处！

Leanway

The company with CIK# 27904 is DELTA AIR LINES, INC., which is a USA-based major air carrier that provides scheduled air transportation for passengers and cargo throughout the United States and around the world. Based on calendar year 2004 data, it is the second-largest airline in terms of passengers carried, and the third-largest airline measured by operating revenues and revenue passenger miles flown.

Below we will analyze the financial status and the general information about this company/industry based on the documents it provide to Securities and Exchange Commission.

1. Profitability

The company lost money each year since year of 2001, last year is the worst one, and the past 6 months (ended June 30,2005) loss is up to 1453 million USD. We still can not say that the company has survived from the crisis, below table show the detailed data.

Period

Six Months Ended June 30,2005

2004

2003

2002

2001

2000

Net income (loss) before cumulative effect of change in accounting principle

-1,453

-5,198

-773

-1,272

-1,216

928

Note: years ended December 31 of each calendar year; money in millions of USD.

Considered of the company and the industry general information, we can not say it will be profitable in the near future. Based on the past half-year financial data, we estimate that the company will lose about 3 billion USD this year.

Leanway

2. Solvency

Based on the latest 10Q report, we can summarize below assets and liabilities data in the table about the company.

Consolidated Balance Sheets

(In Millions, as of June 30,2005)

ASSETS

Total current assets

3,786

Total property and equipment, net

16,376

Total other assets

1,399

Total assets

21,561

LIABILITIES

Total current liabilities

6,921

Total noncurrent liabilities

20,852

Total deferred credits

497

Total liabilities

28,270

From this table we can find that the total assets is 21561 million USD, yet the total liabilities is up to 28270 million USD, so we can say that the company is not solvent now.

As for its liquidity position, the total current assets is 3786 million USD, yet the total current liabilities is 6921 million USD, so the total current assets can not cover the total current liabilities, they have substantial liquidity needs and face significant liquidity pressure, the company need try its best to get more financial support such as loan. Actually the company’s interest expense (half-year, ended June 30 of 2004 and 2005) jumped from 391 million USD to 556 million USD, it means that the company got some money support already.

Also from the 10Q report of the past 6 months, the total operating revenues is 4185 million USD, the total operating expenses and other expense is 4585 million USD, so the loss before income taxes is 400 million USD, the company is not generating cash but losing money now.

Leanway

3. Business factors

The main business risks this company faces is that the price and availability of aircraft fuel, yet they can not increase the sell price of their products (passenger flight ticket and cargo), so they lose money every year.

From above chart of the company’s statistical summary and revenue trends of the past 5 years, we can say that the yearly revenues are quiet stable, but the operating expenses increased greatly.

Aircraft fuel expense increased 51%, or $986 million, to $2.9 billion, with approximately $820 million of the increase resulting from higher fuel prices which remain at historically high levels. Their fuel costs represented 16%, 13% and 11% of our operating expenses in 2004, 2003 and 2002, respectively. The trend of fuel costs keep increased.

The industry of civil aviation is a high competitive one with low entry cost, Delta airlines earn only gross profit rate of 10% even in the boom year of 2000, also the industry is restricted by many national acts and regularities. We can not expect a jump for the operation improvement.

I feel good when I access the company’s own website – www.delta.com, it is customer-focused, I can make a ticket booking to arrange my personal trip and check the order status easily even I am new customer.

For the whole loop of personal or business trip, airline services is just a part of it, so it is very important that diversity and deep cooperation with others such as travel agency, hotel, etc. Airline companies should not think they are transportation service provider only, they need keep a big picture in their mind to achieve customer satisfaction, and add value to customer from a high level.

Leanway

我自己的作业，可惜图表显示的有点问题。

希望看到家人的作业或指点。