Business and Financial Evaluation of BA and BT
... Performance of organisations can only be monitored if both business and financial perspectives are employed. ... Other factors that effect airlines include such issues as the severe bad weather that has effected most of the United Kingdom over the past few years, and serious computer systems failure that BA had to contend with in the previous year. ... From the discounted airline ‘go’, to offering business class flights, BA has a broad customer base. ... Impact of Macroenvironmental factors for BT The accelerated growth of mobile telephony and the expansion of Internet use have all added to the sharp increases in demand for telecommunications. ... To be able to succeed in this business, companies must be able to move with these changes in technology. Innovation in new designs, technological improvements are all factors that impact the business. Impact of Microenvironmental factors for BT British Telecom have a number of competitors, including mobile networks such as Orange, One 2 One and Vodafone. ... BA has better return on their capital employed, whereas BT has a poor have a poor return in 2001. CHECK CAPITAL EMPLOYED FIGURES Ratios for British Airways for 2001 / 2000 Financial ratio analysis is an integral part of the assessment and improvement of company’s performance. They help direct attention to areas of the business that need additional analysis and provide some measure of the company’s profitability and cash position. Liquidity Ratios Liquidity ratios are vital for a business to show whether they are able to pay their debts as and when they are due, thus being able to remain in operation. ... From the ROCE ratio, we can see an increase from 2000 to 2001 indicating a slight increase in profitability of the business from the increased investment. This ratio is a fundamental measure of the profitability of BA and how well the management has utilised total assets. ... The other possible suggestion would be that the business has increased the volume of trade compared to the capital employed. ... Stock turnover shows how quickly goods move through the business. ... A falling debt collection may mean that the company is successfully reducing bad debts and eliminating poor risks, indicating that BA maybe tightening up there debt collection to gain more control. ... Ratios for BT for 2001 / 2000 Liquidity Ratios 2001 2000 Current ratio = current assets Current liabilities 9590 = 0. ... 72 The ROCE ratio has significantly declined from 2000 to 2001, indicating a decrease in profitability of the business from its investments. ... This could possibly indicate that BT are losing control of its debtor collection or that it has purposely allowed debtors more time to pay to increase sales and attract new customers. ... The creditors turnover period shows that BT are taking longer to pay its suppliers than it did in 2000 – 11 days later. This could damage relations with suppliers if they are not careful, but it also shows how BT are using creditors to finance some of its business operations. These ratios together show that BT have a poor turnover rate in 2001 when compared with 2000. ... Compared with BA’s current liabilities of £3,308,000,000.00, BT’s stand at £20,733,000. ... It is evident from these figures of just how high BT’s current liabilities are in comparison.