Business Related Topic (see page 9 on attachment) Case Study

Business Related Topic (see page 9 on attachment) - Case Study Example Recognizing that the financial analysis will be maximized by more data, it uses 2005 as a comparative year for 2006. Lastly, this paper will also compare the financial data and ratios of British Airways Plc, its key competitors, and industry through a benchmarking analysis. The report concludes with the identification of the airline's financial strengths and weakness. The British airline is rapidly evolving due to external environmental forces. The industry has been faced with a dismal outlook with the onset of economic downturn in the world led by the business cycle in the United States (Sorensen 2006). Furthermore, the emergence of low cost carriers in the European airline industry is a living example of how the strategic directions of business organisations are strongly affected by the changes, trends, and developments and their external environment. It is apparent that the European airline industry has progressed from being dominated by large, business class air carriers to one which is increasingly controlled by the proliferation of low cost airlines (Sorensen 2006). The wide popularity and acceptance of budget air travel puts pressure on large carriers like British Airways (BA) Plc. to implement more aggressive market strategies in order to compete in the marketplace. With this backdrop, it has been expected that the performance of business class air carriers like BA have declined while budget airlines take center stage. This, in turn, is expected to be reflected in the financial performance of the business organization. Financial analysis has become one of the most popular techniques utilized in order to ascertain the health and well being of a business organization. Financial analysis enables decision makers to uncover trends in business performance and compare different business organizations (Keown, et. al 2005). In line with this, it becomes important to analyse the financial situation of the BA in order to understand how it copes with its weaknesses and faces various threats. 2.1. AIMS AND OBJECTIVES Based on its annual reports, its key competitors, and the whole airline industry, this report generally intends to examine the financial situation of British Airways Plc. This report aims to accomplish the following objectives: 1. Determine the trend of growth of BA's key income statement and balance sheet accounts; 2. Evaluate the performance of BA in terms of profitability, liquidity, solvency, and financial leverage through the use of financial ratio analysis; 3. Compare the performance of BA with its main competitor by benchmarking; and 4. Reveal the business organization's areas of financial strengths and weakness. 2.2. RESEARCH QUESTION Based on the aforementioned research aims and objectives, the research question in consideration can be adequately stated as follows: What is the general assessment on British Airways