Example

Evaluating Financial Performance of Ryanair
I. Overview of The Company
1.1 The Company’s corporate and business strategies
1.2 The Company’s SWOT na!ysis
II. na!y"e #inancia! $erformance of the Company
III. To compare the Company’s performance with
Industry verage performance
I%. Compare the financia! performance of the Company
with the companies in the same industry.
%. Compare the Company with the c!osest competitor
1.& 'usiness (ode! and Strategy between two companies.
1.) Compare financia! $erformance of two companies.
%I. Conc!usion
1.* Overview of +yanair,
Ryan family launched Ryanair in 1985 as scheduled passenger airline services operating
between Ireland and the United Kingdom. he purpose of Ryanair is an alternative to !er
"ingus# a state monopoly carrier. !lthough there was a growth in number of passengers# the
$ompany faced a loss# accumulating to IR %&' m at the end of 199'. In early of 199's
Ryanair restyled itself to become low fare airlines. It was the first low fare airline in (uro#
based on the model of )outhwest !irline. ony Ryan and *ichael +,"eary were appointed
the board members of Ryanair. he new model brought new fortunes to the $ompany. In
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Evaluating Financial Performance of Ryanair
199-# the $ompany had flown floated in I.+ on the /ublin )toc0 (1change and in &''& the
$ompany listed in 2asda341''.
+n 5une 6'
th
# &'1'# Ryanair has serviced around 1#1'' routes throughout (uropean
$ontinental and raised the fre3uency of service on number of ma7or routes. In the fiscal year
&'1'# the number of Ryanair, passengers have reached to 88.5 millions. !t the end of 6'
th
#
&'1'# Ryanair owned &5' 9oeing -6-48'' aircrafts# and operated 155 airports and employed
8#''' people. he $ompany will raise its fleet to &-& by *arch &'16. :Ryanair,s annual
report &'1';.

1.*.1 +yanair’s corporate and business strategies
In the last few years# Ryanair has built its image as one of the leading low4fare carriers in the
(U with a variety of improvement and e1panding offerings of its low4fares service. hat has
brought Ryanair an advantage of increasing passenger percentage on routes. 9esides# that
Ryanair is continuously concentrating on efficiently control costs and operating has helped it
maintain appropriate low4fares strategy over competitors. )ome elements that are part of
Ryanair,s policy will be cited as follows<
Low fares<
"ow fares are to stimulate the demand. Unli0e other carriers# Ryanair focuses on one4way
tic0et policy# in which fare conscious targets li0e businessmen# travelers# who mainly use
other methods of transport such as trains# coaches or cars= this policy came into effect since
2ov4&''1. Rather# based on demands for particular flights and the time interval until the
planned date of departure# Ryanair designs suitable tic0et pac0ages to meet
passengers,purposes. Ryanair sells -'> of seats per flight at the minimum available for the
route that means Ryanair pursues ?more sales for more profit@ strategy by an increase in
occupied seats. Ryanair promoted a campaign ?fare for free@ in &''6 :e1clusive of
government ta1es and passenger services charges; for travelers between )eptember and
/ecember# 1-4&''6. In fact# this promotion largely improved its low4fare carrier imageA
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Evaluating Financial Performance of Ryanair
Tight focus on short-haul routes with particular demand
$ompared to flight time of other haulers# Ryanair,s average flight duration has been 1.1
hours with an average flight distance of -8B 0ilometers in &''6# helping raise its daily
average round trip to 1.9B per trip. $hoosing to e1ploit short4range trips has helped Ryanair
to cut unnecessary costs which pay ?frill@ services otherwise e1pected by customers on
longer flights. 9esides# the point4to4point flying policy reduces unnecessary costs such as
connection# barrage transfer# passenger transit between ranges. his is a one of main
differences between the $ompany and traditional carriers.
Smart route selection
Ryanair chooses secondary airports that have easy access to ma7or population hubs and local
airports li0e the center of a circle. 9y establishing convenient transfer centers li0e that#
Ryanair could increase its competitive edge# cut costs# minimiCe terminal delays and raise on
time departure rates and faster turnoveround times. he faster turnoveround times help the
$ompany to ma1imiCe aircraft utiliCation. It is estimated that at the end of fiscal year ended
*arch 61# &''6# the $ompany, turnoveround time was about &5 minutes. his permit
Ryanair to add two e1tra flights per day that is unable with a 8' minute turnovertime. 9y
decreasing turnovertime# it adds DB.B million in incremental revenue per aircraft per year.
Operating cost reduction:
Ryanair,s management believes that its operating costs are among the lowest of any
(uropean passenger carriers# which include< aircraft e3uipment and maintenance cost#
personal e1penses# customer service cost# airport charges. It could be cited amongst ma7or
rationales behind this<
Plane maintenance and equipment costs:
Ryanair once set its strategy for controlling aircraft purchasing costs through buying used
ones. 2evertheless# the policy has no longer wor0ed nowadays. It is using the state4of4the
arts generation of 9oeing -6-48''s# which shares some common spare parts with its running
aircraft team. It is believed that by using new aircrafts# Ryanair could avoid needless
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Evaluating Financial Performance of Ryanair
maintenance charges and spare parts as it used the older fleet. "i0ewise# limiting the fleet to 6
variants of a single aircraft made by a single ma0er :9oeing; should enable it to limit the
associated costs including pilot training# purchase# storage of new spare parts# e3uipment
costs and assuring a greater ability to managing crews and e3uipment.
*anagement the terms of the contracts of 9oeing aircraft purchasing are very affordable for
the carrier.
Personnel and administrative expenses:
Ryanair is poised to control its administrative costs by continuously bolstering 3uality of its
already highly4productive labor force. Incomes of its employees are based on productivity
and contributed wor0ing time. In particular# flight attendants, salary is based on on4board
sales of products while pilot payment is relied on flight numbers or sectors flown and cabin
crew payment is based on industry standards for minimum or ma1imum wor0ing hours.
Rather# employees are eligible to participate in annual ()+.s.
Cost of customer services:
Ryanair has rented third4party contractors at certain airport to do passenger# aircraft 7obs such
as boo0ing# guest handling and some services in order for more price competitive and cost
efficient. Ryanair also manage to maintain its competitive rates by signing mid4long term
contracts at reasonable price which are only ad7usted to inflation on periodic basis. he
development of online boo0ing facilities has helped elimination the firm,s travel agent
commissions. !lso# it is believed that online tic0eting will continuously contribute much
more to its sales while eliminating unwanted costs. It is estimated that direct telephone
reservations and sales through Ryanair, website generated appro1imately 8> and 9B> of its
scheduled passenger total revenues in fiscal year &''6.
Airport Access ees:
Ryanair chooses to use charge competitive airports to lower its operating costs. Ryanair see0s
to manage airport access and relates services fees by selecting airports with competitive cost
offers. Its management based on the fact that its high growth in volume of passengers
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Evaluating Financial Performance of Ryanair
travelling over years would bring it an advantage to negotiate with the airports for access to
their ground facilities. *oreover# Ryanair attempts to reduce those charges by choosing
cheaper gate locations and outdoor boarding stairs as well rather than e1pensive gateways.
Ancillar! Services:
Ryanair provides a spectrum of convenience# revenue boosting services that include on4board
merchandise# beverage and food catering# accommodation boo0ing services# car rentals#
ground travelling etcE Ryanair applies accommodation services# car rentals# and travel
insurance on its website and through traditional reservation offices as well. Ryanair,s leaders
believe that with full services pac0ages# Ryanair would be able to maintain high growth in all
of its business lines while increasing productivity and reducing costs.
Am"itious growth plan:
he very first success of Ryanair routed from the Ireland4UK mar0et# afterward# it began to
e1pand to operate into continental (urope# Ryanair is poised to pursue a sustainably high
growth plan targeting other potential (U mar0ets. Up to now# Ryanair has been severed a
total of 9B' routes in continental (U destinations.
Commitment to Safet! and #ualit! $aintenance:
Ryanair,s top focus is safety standards. hat includes the careful recruitment and training
processes for pilots and cabin crews while it annually spends a considerable amount of
capital on maintenance# long4term assets to meet the international air transport standards to
ma0e sure that it can deliver highest service 3uality at very affordable prices. )ince its
establishment# there has not been any incident regarding passengers or flight services 3uality
for Ryanair. It is a little strange that safety is one of the most crucial factors helping Ryanair
maintain its low4fare strategy. Fowever# Ryanair see0s to sign long4term maintenance# repair
services at fi1ed costs with third4party contractors to hedge rising e1pense that might hurt
long4term bottom4line prospect.
1.*.2 +yanair’s SWOT na!ysis
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Evaluating Financial Performance of Ryanair
Strengths %ea&nesses
• Gide operation base in the (uro
• "argest and most profitable "$$ in
(urope
• $ompetent# ambitious and efficient
management.
• +ptimal business model helping
coherently carry out low cost strategy.
• )econdary and regional airports drive
costs down and bring faster capital
turnover.
• Fealthy financial conditions coupled with
stable cash flows allow Ryanair to boost
its ability to participate in ambitious
growth plan in the short and longer term.
• $ompetitive edge on new aircraft
purchase.
• Figh seat occupancy rate and lowest cost
seat4mile in short4haul flights.
• )tandardiCed and modern fleet saves on
maintenance# training cost# enhance
safety and fuel efficiency.
• Figh rate on punctuality and low baggage
loss rate give reliability to the
organiCation.
• Figh rate of aircraft use increases gross
margin.
• /istance of secondary airports from ma7or
hubs reduces a portion of passenger
segment.
• "ac0 of appreciate fre3uency in certain
routes
• "ow4fare image might not be recogniCed
by new passengers
• (1posure to outsourcing might shave
Ryanair of close control of costs and
e1penses
• (1posure to various laws and regulations
governing environment# safety# security
may hamper Ryanair,s operations in mid4
long terms.
Opportunities Threats
• (uropean mar0ets are still potential for
low4fare carriers li0e Ryanair with the
(uropean open s0y agreement
• )ome flag carriers have attempted to
e1ploit low4fares segment by establishing
their own subsidiaries to better compete
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Evaluating Financial Performance of Ryanair
• U)/ wea0ness towards (UR empowers
Ryanair,s purchasing power for 9oeing
aircrafts.
• )table geo4political condition in the (U
helps reduce systematic ris0.
• Increasing demand for low4fare air
transport vs. other means of transport
amongst young population in the region.
• /ependence on oil mar0et condition#
which is a ma7or threat to inefficient
carriers
• $ompetition and alternatives from ground
means of transport such as buses# trains#
shipsE
• Increasing charges from secondary
airports when more low4fares carriers
choose to use them will hurt Ryanair,s
growth potential
Table 1: Ryanair’ SWOT Analyse
1.- na!y"e #inancia! $erformance of +yanair

Figure 4: Ryanair’s revenue, operating expenses and profit for finanial year
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Evaluating Financial Performance of Ryanair
Hirst of all# we ta0e a 3uic0 loo0 at financial performance of Ryanair in 5 year4period. It can
be seen from figure B# revenues increased significantly of -8.5> during the period due to an
increase of 91> in number of passengers# from 6B.8 million in &''8 to 88.5 millions in &'1'.
Fowever# the profits decreased negatively. It is because of considerably increasing in
operating e1penses of 95> during the same period. he reason of increasing in operating
e1penses is the negative fluctuation of fuel price during &''8 to &'1' and the growth of
airport and handing charges. In fiscal year &''9# it was the first year for long time Ryanair
made a loss in the profit. he loss# first# is because of an appro1imately 8'> increase in fuel
and cost e1penses from D-91.6 million fiscal year &''8 to D1#&5-.1 million in fiscal year
&''9. )econd# it is because of an impairment charge of D&&&.5 million on the available for
sale investment in !er "ingus# reflecting a significant decline in the !er "ingus share price
from *arch 61#&''8 to *arch 61#&''9 . In &'1'# the $ompany,s fuel and oil e1penses
decreased to D896.9 million# Ryanair achieved positive profits of D6'5.6 million.
iscal 'ear ended $arch ()*
+,), +,,- +,,. +,,/ +,,0
Total 1evenues 1''> 1''> 1''> 1''> 1''>
)cheduled Revenues --.8 -9.- 8&
8B 8B.89
!ncillary Revenues &&.& &'.6 18
18 15.61
Total Operating expenses 88.5 98.9 8'.&
-9 --.8B
)taff $osts 11.& 1'.5 1'.5
1' 1'.16
/epreciation and !mortiCation -.9 8.- 8.5
8 -.65
Huel and +il &9.9 B&.- &9.&
61 &-.6&
*aintenance# *aterials# and Repairs &.9 &.6 &.1
& &.&1
!ircraft Rentals 6.& &.- &.-
6 &.8'
Route $harges 11.6 9.8 9.5 9 9.-&
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Evaluating Financial Performance of Ryanair
!irport and Fanding $harges 15.B 15.1 1B.8
1& 1&.-8
+ther B.8 5.1 5.1 8
5.56
+perating .rofit 16.5 6.1 19.8
&1 &&.18
2et Interest Income :(1pense; :1.8; :1.9; :'.5;
+ther Income :(1pense; :'.5; :-.B; :6.1;
:1;
:&.1B;
.rofitI:"oss; before a1ation 11.B :8.&; 18.&
&' &'.'&
a1ation :1.&; '.B :1.8;
:1; :1.9';
.rofitI:"oss; after a1ation 1'.& :5.8; 1B.B
19 18.1&
Table !: Su""ary operating and finanial overvie# onsolidated ino"e state"ent data$
%Soure: Ryanair annual report !&1&, !&&', !&&()
)cheduled Revenues as percentage of total revenue has decreased during the period from
8B.88> in fiscal year &''8 to --.8> in fiscal year &'1'# primarily reflecting a decrease of
1B.&> in average fares from DB' in fiscal year &''8 to D65 in fiscal year &'1'. !lthough the
number of RyanairJs passengers soared appro1imately by 9'> from 65 million in fiscal year
&''8 to 8- million in fiscal year &'1'# it demonstrated that the company is successful in
opening new routes as well as attracting more customers in e1isting routes.
!ncillary Revenues as percentage of total revenue has increased gradually from 15.61> in
fiscal year &''8 to &&.&> in fiscal year &'1'. hey include revenues from non4flight
scheduled operations# car rentals# in4flight sales and Internet4related services.
+perating (1penses as a percentage of revenues# Ryanair,s operating e1penses have
increased from --.8B> in fiscal year &''8 to 88.5> in fiscal year &'1'. /ue to the increase
of fuel costs# this e1pense was &-> of total of revenue in fiscal year &''8 to increase to 6'>
of this total in &'1'. )pecially# in fiscal year &''9# the cost of fuel accounted B&.-> of the
$ompany, revenues. !ccording to the table above# airport and handing charges also are the
other ma7or e1penses that considerably increased as compared with total of revenues. In
fiscal year &''8# airport and handing charges were around 1&> of total revenues# however
the fiscal of &'1' was over 15>.
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Evaluating Financial Performance of Ryanair
In terms of profit and loss after ta1ation# there is a considerable drop in profit as a percentage
of revenues. It can be seen from the table# the $ompany ma0es a profit of 18.1&> as e3ual as
total revenue in fiscal year &''8# however# this figure declined to 1'.&> in fiscal year &'1'.
It is due to the increase in operating e1pense is higher than the increase in sale revenues.

Profita"ilit! ratio:
Figure *: +rap, of Ryanair’s RO-. and ROSF s,o#ing ,anges fro" previous years
!ccording to figure 5# Ryanair,s R+)H and R+$( were stable with high level during three
fiscal years from &''8 to &''8. Fowever# fiscal year &''9 of both shows loss in profit. he
0ey reason for this loss is surge increase fuel bill rose around 8'> to D1.59 billion# in &''8
oil prices were nearing K1B' a barrel. he bill accounted for B6> of company, operating
e1penses and compared to 6&> in previous years. Fowever# after fiscal year &''9 by using
derivative to hedge negative effect of fuel and the 7et fuel price was decreasing# therefore#
R+)H and R+$(,s Ryanair shows a positive recovery.
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Evaluating Financial Performance of Ryanair
2fficienc! 1atio
Figure (: T,e grap, of Ryanair’ Total asset turnover and fix asset turnover
!ccording to figure 8# it shows that there is a slight improvement of its total asset utiliCation
during 5 year periods. In fact# in &''8# Ryanair invested D1 in asset it generated D'.B in the
$ompany,s revenue# however# in &'1' D1 invested in total assets that created D'.B6 in the
$ompany,s revenue. In the same time# ratio for fi1 asset turnover rose from '.88 in &''8 to
'.-- in &''9.
In general# these ratios indicate that the company has utiliCed its assets effectively during the
five4year period. !lthough Ryanair has invested heavily to raise its aircrafts from 1'6 in &''8
to &6& in &'1'# the fi1 asset turnover ratios are stable and slight increase. It indicated that
new aircrafts are efficiently used to immediately generate the company,s revenue.
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Evaluating Financial Performance of Ryanair

Figure /: Ryanair’s average trade reeivable olletion period and average trade payable pay"ent period
Ge can see from the graph# the trend of average trade payables period increase slightly from
1-.1 days in &''8 to 18.81 days in &'1'. he increase can be e1plained by the company
using advantage of the business of scale and scope to raise the time payable for its suppliers.
In other words# it is using more free finance provided by suppliers. In contract# because of
more competition in this industry# Ryanair has police to credit for its customers to encourage
the demand and increase its sales. herefore# average trade receivable collection period
increased from 6.&8 days in &''- to 5.B1 days in &'1'.
inancial gearing:
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Evaluating Financial Performance of Ryanair
Figure ': T,e grap, of Ryanair’ finanial gearing s,o#ing ,anges fro" previous years
In terms of gearing# Ryanair uses more borrowing to fund its business during the period. It
can be seen form the graph# in &''8# 5B > of financial resource came from borrowing#
however# the figure in &'1' rose to 8'>. It means Ryanair relies on e1ternal finance to run
its business. It can be seen that in case of interest cover# in &''9 operating income were
negative# it is because of the financial crisis and surge increase fuel price# therefore it could
not cover its interest# all of other years for this periods# interest cover were around 5 and 8
times. It shows that the $ompany strong ability to pay its debts.
3nvestment 1atios
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Evaluating Financial Performance of Ryanair

Figure 0: T,e grap, of Ryanair’ .1S s,o#ing ,anges fro" previous year
(.) ratio is useful method to measure the performance of a business,s share. he assessment
of potential investment can be performed by e1amining the trend in earnings per share.
!ccording to the graph# the earnings generated by Ryanair, business has decreased during the
period. It seems that the prospect of Ryanair,s share was not good.
Figure 1&: T,e grap, of Ryanair’ 1rie and 12. s,o#ing ,anges fro" previous years
.I( ratio presents the e1pectation of investors to the future of a business. he firms have a
higher .I( ratio# it shows the investors are more confidence in the future prospect of the
business. !s a result# investors are willing to pay more present cash flow in e1change for the
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Evaluating Financial Performance of Ryanair
future earnings stream from the business.It can be seen form the graph# trend in .I( dropped
considerably during the period from &''- to &''9 and has recovered after &'1'. his
recovery in &'1' of .I( ratios shows that investors e1pect a better prospect of the Ryanair,s
business.
1!anair4s 5ividends Polic!
)ince 1998# the $ompany has not announced or paid dividends to its shareholders. Fowever#
in 5anuary &'1'# Ryanair announced to intend a pay special dividend of D5'' million# to be
performed on +ctober &'1'. It also declared a plan to pay other dividend of D5'' million
before the end of fiscal year &'16. he company has police that may pay dividends from
time to time or may not pay any dividends at all. Its profitability is used to purchases further
aircraft and other significant capital e1penditures.
1.. To compare +yanair’s performance with Industry verage
performance,
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Evaluating Financial Performance of Ryanair
Scheduled Passergers Carried
3nternational
1an& Airline Thousands
1 Ryanair 71,229
2 Lufthansa 44,460
3 easyJet 37,665
4 Air France 30,882
5 Emirates 30,848
6 ritish Air!ays 26,320
7 "L# 22,787
8 $e%ta Air Lines 21,029
9 American Air%ines 20,356
10 &athay 'acific air!ays 19,723
Table 3: World ’largest international s,eduled airlines
6Source: he International !ir ransport !ssociation :I!!; &'1'78
!ccording to the International !ir ransport !ssociation# Ryanair is the world,s largest
international airline. he number of Ryanair, customers reached to over -1 million in &'1'.
his number is much higher with the second biggest international airline "ufthansa with over
BB#B million and the closest competitor in low4fare airline company easy5et : 6- million;.
Average fares
Ryanair (44
EasyJet (66
Air er%in (82
Aer Lin)us (94
Lufthansa (235
Air France (267
ritish Air!ays (324
Table 4: Airlines’ average fares
%Soure: 4ased on !&&' publis,ed annual reports)
!ccording to table above# it can be seen that# there is a wide the gap between Ryanair
average fares and other (uropean airline competitors. Ryanair drives down air fares for
customers all over (urope to encourage the demand and growth of its traffic. Ryanair
uni3uely guarantees ?no fuel surcharges@ regardless of how high oil prices rise# while many
of carrier competitors continue to levy un7ustified fuel surcharges. herefore# Ryanair,
average fares is lower in comparison with other airline companies. In fact# in &''8 Ryanair,s
customers pay average DBB per tic0et while the price offered by other low4fair carrier (asy5et
was D88. In contrast# traditional airlines such as "ufthansa# !ir Hrance and 9ritish !irways
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Evaluating Financial Performance of Ryanair
charge their passengers for very high price. "ufthansa, passengers paid average D&65 per
tic0et and 9ritish airways was D6&B per tic0et.
Airline Average 1ay
Ryanair 5 *&,3**
Air Frane2678 5 40,*&4
7uft,ansa 5 44,33*
4ritis, Air#ays 5 4&,&&/
Table *: Airlines’ Average 1ay
%Soure: 4ased on !&&' publis,ed annual report)
Airlines4 passengers per 2mplo!ee
1!anair -*0/-
2as!9et 0*//+
:ristish Airwa!s /(;
Air rance<=L$ /);
Lufthansa 0+>
Table (: Airlines’ passengers per ."ployee
%Soure: 4ased on !&&' publis,ed annual reports)
!ccording to airline average pay, table# Ryanair,s pay is among the highest of any ma7or
(uropean airlines. In &''8# each employee in average of Ryanair receives over D5'#''' that
is much higher than that of 9ritish !irway,s employee about DB'#'''. In addition# he
$ompany 0eeps continuing to manage its rosters in order to ma1imiCe its people,s
productivity. he company,s productivity remains high. !ccording to !irline4.assengers per
(mployee# in &''8 Ryanair carried almost 1'#''' passengers per employee# a figure that is
some ten times better than our principal competitors across (urope.
1./ Compare the financia! performance of +yanair with ir!ine
companies
1!anair
?ntied
=ingdom
2uropean
?nion
2uropean
?nion6@on-
2uro7
%orld
.I( 1'.88 16.BB 8.BB &-.'6 15.59
(.) '.&5 4 '.56 4 4
/iv yield :>; ' '.88 '.B9 '.59 1.-6
R+( :>; 1&.88 11.&1 45'.-9 8.'B 41-.9-
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Evaluating Financial Performance of Ryanair
.I9oo0 1.55 &.&& 1.9B 1.9B &.-&
.I)ales 1.&8 '.59 '.6B 1.&B 1.15
*ar0et $apitaliCation :million; 8#5&-.'& 1#6B8.8' &#'88.&1 1#''B.8' 1#-8'.16
Luic0 Ratio 1.89 1.1B 1.&8 '.8- '.9
$urrent Ratio 1.89 1.B8 1.66 1.19 1.5
Interest $over 5.1 5.&6 4-.16 4'.5 1.8-
"ong term debtI(3uity 1.1& '.86 '.95 '.'5 &.1&
"ong term debtI$apital '.5& '.6& '.6- '.51 '.65
"iabilityI(3uity 1.91 &.'9 5.69 4'.68 B.8
"iabilityIotal !ssets '.88 '.81 '.- '.-1 1.'&
Table /: Su""ary finanial perfor"ane of Ryanair and region of airline
%Soure: Reuters Finanial 9atabase in !&11)$
!s shown in the above comparative table# the performance of Ryanair is better than
the industry average performance in many places in the world. R+( of Ryanair is 1&#89>
meanwhile the ratio for other regions such as (uropean Union and Gorld suffered a loss or
0eeping low rates (uropean Union :2on4(uro; and United Kingdom were 8.'B> and
11.&1> respectively.
he short4term li3uidity ratios are used to measure the ability of firm in converting
the current asset into cash when it has some urgent financial obligations to be settled in a
short4term period. Ryanair, current ratio and 3uic0 ratio has remained at 1.89>. $omparing
to the airline industry in many places in the world# Ryanair has maintained a higher in
average both current ratio and 3uic0 ratio than its competitors. In other words# Ryanair has a
better position than average airline industry to meet its short4term financial obligations.
In terms of mar0et capitaliCation# Ryanair is more than 6 times larger comparing
airline industry company average.
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Evaluating Financial Performance of Ryanair
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Evaluating Financial Performance of Ryanair
1!anair Southwest 2as!9et
l!"e
Aroup
9et:lue
Birgin
:lue
Aol Air :erlin Air Asia %est 9et @orwegian

61I6I&'11 61I1&I&'1' 6'I9I&'1' 61I6I&'11 61I1&I&1' 6'I8I&'1' 61I1&I&'1' 61I1&I&'1' 6I1&I&'1' 61I1&I&'1' 61I1&I&'1'
Compan! 1eport 3tems
Revenue
6#8&9.5' 8#88'.BB 6#B&8.-1 81-.58 &#55'.1- 1#858.'8 6#1B6.6B 6#-&6.58 958.98 1#8'6.15 1#1'6.61
+perating $osts
6#1B1.6' 8#6'8.&6 6#&18.55 8-6.'6 &#5-5.58 1#996.5& &#8&9.'- 6#-88.89 898.98 1#--'.B9 1#'-8.6B
.reta1 .rofit and loss
B&'.9 558.8& 1--.5 4B.8- 1&'.66 &6.55 1-B.'- 41B1.8& &88.65 1B-.B6 61.&
a1
B8.6 &16.-8 6-.89 49.1- B-.86 8.9& --.8 4BB.B8 9.'8 BB.9B 9.&-
.rofit after ta1
6-B.8 6B6.'8 169.81 B.6 -&.5 1B.8& 98.B- 49-.18 &5-.&8 1'&.B9 &1.96
otal !ssets
8#598 11#55-.&6 B#816.1- B88.8B B#9&-.89 &#858.'5 B#'8&.'9 &#6-'.1& 6#&'9.66 &#8-'.96 8B9.59
otal "iabilities
5#8B&.1' 8#895.8& &#886.5' 6B8.56 6#891.B- &#'1-.65 &#-8&.88 1#88B.-8 &#6&8.-9 1#5B'.88 819.1&
)hareholders, (3uity
&#956.9' B#881.81 1#-&9.88 1&&.11 1#&68.&& 8B'.-1 1#619.&1 5'5.6B 88&.5B 1#16'.&5 &6'.B8
Table ': :ey finanial ite"s for lo# ost airline !&1& and !&1
%Soure:Retuers)
Page &'
Evaluating Financial Performance of Ryanair
Hrom the table above# )outhwest is the low cost airline which has the highest revenue# D8.8
billion. he following is !ir 9erlin and Ryanair which Revenue are appro1imately D6.-& and
D6.8 billion. )o it can be said that# Ryanair is ran0ed of the third largest low cost airline in
respect of revenue. In addition# Rynair is the second biggest low cost airline in terms of
.reta1 .rofit and loss# and the biggest low fair airline in aspect of .rofit after ta1#
appro1imately D6-B.8 million that is higher than the profit after ta1 of )outhwest. )outhwest
is the biggest airline in terms of total assets# while Ryanair is the second biggest that owns
assets near double to compare the rest of low fare airlines.
Page &1
Evaluating Financial Performance of Ryanair
1!anair Southwest 2as!9et
l!"e
Aroup
9et:lue
Birgin
:lue
Aol Air :erlin Air Asia %est 9et @orwegian
61I6I&'11 61I1&I&'1' 6'I9I&'1' 61I6I&'11 61I1&I&1' 6'I8I&'1' 61I1&I&'1' 61I1&I&'1' 6I1&I&'1' 61I1&I&'1' 61I1&I&'1'
Profita"ilit! ratios
Return on (3uity
1&.88 -.68 8.'8 6.5& 5.88 &.&8 -.61 419.&6 &9.15 9.'- 9.5&
Return on otal !ssets
B.8B 6.'9 6.18 1.'& 1.B8 '.59 &.B5 4B.'8 8.8& 6.8- &.9B
Return on $apital (mployed
-.88 1'.8B 8.8& '.B1 -.69 6.'9 1'.88 4&.58 9.8 1'.B 5.59
+perating *argin
16.B5 8.51 8.'- '.15 9.-8 &.88 1' 4'.9& &-.1- 1'.&9 &.BB
Return on Hi1ed !ssets
-.-9 B.15 5.19 1.9- 1.89 '.-8 6.B- 48.18 1'.88 5.88 B.-B
Aearing ratios
"ong term debtI(3uity
1.1& '.B8 '.-& '.8& 1.-& 1.85 1.18 1.8 &.'1 '.5- 1.'9
"ong term debtI$apital
'.5& '.6& '.B '.6B '.86 '.81 '.56 '.81 '.8- '.68 '.5&
Luic0 Ratio
1.89 1.&& 1.'9 1.&1 1.56 '.89 1.55 1.5 '.81
$urrent Ratio
1.89 1.&9 1.B& 1.1& 1.&5 '.-8 1.86 '.96 1.58 1.5& '.86
Interest $over
5.1 8.86 -.-8 '.61 1.85 '.96 &.65 4'.51 &.81 B.11 1'.8-
Liquidit! and Asset 1atios
otal !ssetsI(mployees :milliom;
1 '.66 '.86 '.18 '.51 '.&& '.&- '.88 '.69 '.B
otal !ssetsI(3uity
&.91 &.B8 &.8- 6.8B 6.99 B.15 6.'9 B.89 6.8B &.68 6.89
)alesI!ssets
'.B5 '.-8 '.-- 1.B- '.5& '.-5 '.8 1.58 '.6& '.88 1.B8
)alesIReceivables
&8.68 B6.&8 16.8B -.69 1B.86 &'.55 1&.-8 11.-& 6.55 5-.&6 1'.&8
)alesIGor0ing $apital
&.6 1B.19 8.86 4B5.&9 1'.B- 48.&- 1&.-8 48B.&& 5.1& 8.'1 468.66
Table 0: :ey finanial ratio for lo#;fare airlines, !&1& and !&11
%Soure: Reuters)
Page &&
Evaluating Financial Performance of Ryanair
It can be seen from the table above# Ryanair,s financial performance is better in comparison
to that of other low cost airlines as a whole# in terms of profitability. +nly profitability ratios
of !ir !sia are better than that of Ryanair. In fact# !ir !sia, R+$(# R+)H are 9.8> and
&9.15> respectively. *eanwhile# R+$( and R+)H of Ryanair are lower -.88> and 1&.88>.
Fowever# the siCe of !ir !sia is much smaller compared with Ryanair. he largest low cost
airline in the Gorld# )outhwest# presents lesser success than Ryanair. )outhwest, R+$( and
R+)H are 1'.8B> and -.68>.
Ryanair is the best low fair airline in ability to its short term debts. Ryanair,s $urrent Ratio is
1.89 while that of )outhwest and !ir !sia are 1.&9 and 1.58 respectively. (ven though each
employee of Ryanair uses around D1 million in assets# the ratio salesIassets is lower than
other main low fair airlines. It means Ryanair utiliCes its assets less effectively than others. In
fact if Ryanair invests D1 in assets# it generates only D'.B5 pence. Fowever if )outhwest
invests D1 in assets# it generates D'.-8 pence# and that for (asy5et is D1 investment in assets#
it generates D'.-- pence.
1.0 Comapre +yanair and 1asy2et,
1.0.1 'usiness (ode! and Strategy between two companies,
hough operating as low4fare airlines# there some difference between the two carriers<
(asy5et tends to use central# primary airports# so carrying higher costs and charges. $learly# it
targets business class customers. !irports used by easy5et are to be named< $harles de
Maulles of .aris# )chiphol in !msterdam# +rly of .arisE
In &''&# easy5et ac3uired 1&' planes from !irbus in a contentious move to ?diversifying the
fleet@. Fowever# it was seen that the mi1ed team of !irbus and 9oeing would drive costs of
pilot training# maintenance and operation of its fleet up. +therwise# Ryanair continued to use
it pure 94-6- fleet. Up to now# 94-6- is still the wor0horse of various low4fare carriers as the
first choice. In spite of signing with !irbus on crew training# spare parts supplies# (asy5et
still bear a %5 million on training for operating its new !irbus aircrafts.
Page &6
Evaluating Financial Performance of Ryanair
hat the (U goes against state subsidy for airports will come more badly for Ryanair than for
(asy5et since (asy5et already concentrates on central# primary airports that always charge
higher and (asy5et,s fares are fully reflected by the costs and charges.
In term of e1pansion# Ryanair is somewhat more successful than (asy5et. In the *N! deal to
ac3uire Mo# Ryanair paid only a net D1million on a carrier with B million passenger base
while (asy5et spent DB'' million on another potential 5 million passenger airliner.
!nother time# easy5et failed to buy /eutsche 9!# after being unable to reach a nearly
feasible deal with the Merman carrier,s pilot and cabin crews to wor0 in its business model.
)imultaneously# Ryanair succeed in persuading 9uCC personnel to sign on its employment
terms to operate in 16 new routes to the (U# including Mermany.
=e! Statistics:

igure )): Comparison of Scheduled passengers "etween 2as!9et and 1!anair
It can be seen from the figure 6# there was a slight difference between numbers of passengers
between two airline companies in &''8. (asy5et serviced 66 millions of passengers and the
number of Ryanair was 6B.8 million. /uring the 5 years period# the speed increase in
numbers of customers of Ryanair is much higher than that of easy5et. In fact# &'1' the
Page &B
Evaluating Financial Performance of Ryanair
number of Ryanair,s passenger reached to 88.5 million# however# the number of easy5et was
about B9 million. It is because of Ryanair rapider opening new routes and purchasing new
aircrafts to grow the number of passengers.
Figure 1!: Comparison of total routes "etween 2as!9et and 1!anair
+pening new routes# in &''8 two airline companies had the same number of routes :&8&;#
however Ryanair, routes was nearly double to compare with easy5et in &'1'# the number of
Ryanair, route was 9B' compared to that of easy5et about 5'9. 9eside that# Ryanair was
more than double number of aircraft after 5 year4period from 1'6 in &''8 to &6& aircrafts in
&'1'. !lthough in &''8 easy5et, fleets was 1&& higher than Ryanair# in &'1' was 198.

Figure 13: -o"parison of total airrafts bet#een .as<=et and Ryanair
Page &5
Evaluating Financial Performance of Ryanair

Figure 14: -o"parison of nu"ber of e"ployees bet#een .asy=et and Ryanair
/uring the time# Ryanair has the smaller number of employees of is smaller than easy5et.
Fowever# in &'1' the number of Ryanair, employees was over the number of easy5et.
Page &8
Evaluating Financial Performance of Ryanair
1.0.2 Compare financia! $erformance of +yanair and 1asy2et,
Profita"ilit! ratio anal!sis
1OC2:

Figure 1*: -o"parison of .asy=et’ RO-. and Ryanair’
he return on capital employed ratio is a fundamental measure of business performance. his
e1presses the relationship between the operating profit generated during a period and the
average long4term capital invested in the business during that period. In the graph# Ryanair
and (asy5et,s R+$( have decreased between &''8 and &'1' due to a considerable increase
in operating profit. It is because of the negative effect of the financial crisis and surge
increasing fuel price. In general# Ryanair,s R+$( is better than that of (asy5et all of the
time. +nly in &''9 Ryanair,s R+$( is negative 46.8> while that of (asy5et,s is &.1>.
1OS:

Figure 1(: -o"parison of .asy=et’ ROSF and Ryanair’s
Page &-
Evaluating Financial Performance of Ryanair
he Return on shareholder, fund ratio :R+)H; shows us how much profit that shareholders
can earn from their investments. Hrom the graph# we can see that# R+)H of Ryanair and
(asy5et have increased between &''8 and &''-# but the situation has changed in &''8. R+)H
of Ryanair and (asy5et has reduced. It is due to increasing operating e1penses. R+)H of
Ryanair is larger than (asy5et all most the period of time e1ception &''9# Ryanair,s R+)H
was negative 48.98> while (asy5et,s is 5.B5>.
@et Profit $argin:

Figure 1/: -o"parison of >et 1rofit 8argin bet#een .asy=et and Ryanair
he trends of 2et .rofit *argin for both Ryanair and (asy5et have decreased as a result of
the faster increase of the operating profit than that of revenue. Hurthermore# (asy5et, 2et
profit margin is much smaller than that of Ryanair.
o sum up# financial performance of Ryanair is better in comparison to that of (asy5et,s as a
whole# in terms of R+$(# R+)H and 2et .rofit *argin.
Page &8
Evaluating Financial Performance of Ryanair
2fficienc! ratios and Liquidit! ratios anal!sis
ixed asset turnover:

Figure 1': -o"parison of fixed Assets turnover bet#een .asy=et and Ryanair
he fi1ed4asset turnover ratio e1presses how ability a company uses its fi14asset to generate
revenue. In the graph# (asy5et, fi1ed assets turnover is higher than that of Ryanair during the
period. In other words# (asy5et has been more effective in utiliCing its fi14assets to generate
sale revenue than Ryanair. In fact# in &'1' if (asy5et invested D1 in fi14assets# it would
generate D1.& in revenue. Fowever if Ryanair invested D1 in fi14assets# it would generate
only D'.88 in revenue.
Trade 1eceiva"les collection period:
Figure 10: -o"parison of trade reeivables olletion days bet#een .asy<et and Ryanair
Page &9
Evaluating Financial Performance of Ryanair
! company always attempts to 0eep the amount of its receivables at a minimum level to
avoid shortage of cash flow. he company,s cash flow can be strongly affected by how well
the company manages its credit policy. he average settlement period for trade receivables
ratio measure how long# on average# credit customers ma0e a payment to the firm that
provides them goods and services on credit.
It can be seen from graph# while Ryanair,s trade receiables collection days stay low level
around 5 to 8 days# while that of (asy5et are very high over &' days in &''9. It means
Ryanair needs around 5 to 8 days to collect money from their customers= meanwhile (asy5et
needs more than &' days to withdrawn. It shows that the ability to management of Ryanair,
cash flows much better than that of (asy5et.
Trade pa!a"le pa!ment period:

Figure !&: -o"parison of trade payable pay"ent period bet#een .asy<et and Ryanair
he average settlement period for trade payables ratio calculates how long# on average# the
firm ma0e a payment to suppliers who provide them goods and services on credit. In the
graph# the number of days that Ryanair ta0e to pays for its suppliers is longer than (asy5et all
of these years. In other words# Ryanair has been more and more using free source of finance
provided by its supplier than (asy5et. It primarily due to Ryanair,s is bigger of the business
scale and it achieves the favorable conditions from its suppliers. In addition# both companies
have trend increasing the use of free source of finance provided by suppliers to their
business.
Page 6'
Evaluating Financial Performance of Ryanair
Current ratio:

Figure !1: -o"parison of urrent ratio bet#een .asy=et and Ryanair
$urrent ratio e1presses the firms,s ability to pay its short4term debt in time. Hrom the graph#
there is decrease in ability to pay the debt in both companies during the period between &''8
and &'1'. In fact# in &''8 Ryanair had O&.B6 in li3uid assets for every O1 it owes. Fowever#
in &'1' Ryanair had only O1.98 in li3uid assets for every O1 it owes. he figural for (asy5et
was much lower in &''8 O&.11 in li3uid assets for O1 borrowing and in &'1' O1.B& for O1 it
owes. Fowever# the ratio of both is 3uite good# and it does not have short4term debt problems
in both companies. Hurthermore# the graph shows Ryanair, ability to pay its short4term
liabilities better than (asy5et all the time.
Page 61
Evaluating Financial Performance of Ryanair
Aearing ratio:
Figure !!: -o"parison of gearing bet#een .asy=et and Ryanair
In term of gearing ratio# during the period Ryanair and (asy5et, gearing ratio is similar. he
gearing ratio of (asy is slight higher than that of Ryanair. In can be seen from the graph# in
&''8# 5B> of financial resource of Ryanair came from borrowing# however# the figure in
&'1' rose 8'>. In the same time# the figure for (asy5et was 5B> in &''8 and 86> for &'1'.
o sum up# both Ryanair and (asy5et are being more relied on e1ternal financial to run them
business
Shareholder returns:
3nvestment ratio anal!sis
2PS:
Page 6&
Evaluating Financial Performance of Ryanair

Figure !3: -o"parison of earning per s,are ratio %.1S) bet#een .asy=et and Ryanair
he earnings per share is important ratio that helps to assess potential of an investment
opportunity in a firm. It measures the earning that each share of firm generates during a
particular period. )hareholders usually pay most attention to earning per share because that
indicates firms, capability in creating cash flows for shareholders. In the graph# the trend in
earnings per share of Ryanair decreased from B' pence per share in &''8 to 411.BB pence per
share in &''9 and then recovered to &'.88 pence in &'1'. In contrast# there was a fluctuation
in earning per share of (asy5et between 18.9 pence per share and 6B.8 pence per share during
this period of time. o sum up# (.) of (asy5et is more stable than that of Ryanair. )o the
prospect of (asy5et seems to be more stable than Ryanair,s.
P<2 ratio:
Page 66
Evaluating Financial Performance of Ryanair

Figure !4: -o"parison of 1rie earning per ratio %12.) bet#een .asy=et and Ryanair
.rice earnings ratio can e1press the relationship between the capital value of the share and its
current level of earnings# and it can affect the mar0et confident in the future of a company# so
it is very useful. wo airline companies, .I( was fluctuation during 5 years period.
herefore# the confidence of two airline companies, shareholders varies. Fowever# in &'1'
Ryanair,.I( is higher than that of (asy5et# so it may indicates investors will e1pect a better
future prospect of Ryanair.
2mplo!ee ratio:
(mployee ratio demonstrates the productivity of the company, employees.

Figure !*: -o"parison of turnover per e"ployee bet#een .asy=et and Ryanair
Page 6B
Evaluating Financial Performance of Ryanair
he average settlement period for trade payables ratio calculates how long# on average# the
firm ma0e a payment to suppliers who provide them goods and services on credit.
his ratio is most useful when compared against other companies in the same industry.
Ideally# a company wants the highest revenue per employee possible# as it denotes higher
productivity. In the graph# turnover per employees ratio of (asy5et is higher than that of
Ryanair all of the time. It means that easy5et,employees is higher productivity in comparison
to that of Ryanair in terms of generating revenue.

Figure !(: -o"parison of profit per e"ployee bet#een .asy=et and Ryanair
Fowever# in case of profit per employee# each employee of Ryanair generates more profit
than (asy5et,s during 5 years period. It due to Ryanair is better off reducing unnecessary
operating e1penses.

Figure !/: -o"parison of total Asset per e"ployee bet#een .asy=et and Ryanair
Page 65
Evaluating Financial Performance of Ryanair
2 Conc!usions
his paper analyCes Ryanair,s financial performance between &''8 and &'1' by ratio
analysis. Ryanair,s performance and strategies are evaluated and compared with low cost
airline industry average performance as well as strategies with the closest competitor
:(asy5et;. 9ased on my research results# I find that<
2.1 +yanair’s financia! performance between 233- and 2313,
Hinancial performance of Ryanair in 5 year4period from &''8 to &'1' is not very impressive.
!lthough revenues increased significantly of -8.5> during the period# the profits have
decreased. It is because of considerably increasing in operating e1penses of 95> during the
same period.
In terms of profit and loss after ta1ation# there is a considerable drop in profit as a percentage
of revenues. $ompany ma0es a profit of 18.1&> as e3ual as total revenue in fiscal year &''8#
however# this figure declined to 1'.&> in fiscal year &'1'. It is due to the increase in
operating e1pense is higher than the increase in sale revenues.
Profita"ilit! ratio:
Ryanair,s R+)H and R+$( were stable with high level during three fiscal years from &''8
to &''8. Fowever# fiscal year &''9 of both shows loss in profit. he 0ey reason for this loss
is a surge in fuel bill# which rose around 8'> to D1.59 billion. In &''8 oil prices were
nearing K1B' a barrel.
2fficienc! 1atio
It shows that there is a slight improvement of its total asset utiliCation during 5 year periods.
In fact# in &''8# Ryanair invested D1 in asset it generated D'.B in the $ompany,s revenue#
however# in &'1' D1 invested in total assets created D'.B6 in the $ompany,s revenue. In the
same time# ratio for fi1 asset turnover rose from '.88 in &''8 to '.-- in &''9.
Page 68
Evaluating Financial Performance of Ryanair
In general# these ratios indicate that the company has utiliCed its assets effectively during the
five4year period. !lthough Ryanair has invested heavily to raise its aircrafts from 1'6 in &''8
to &6& in &'1'# the fi1 asset turnover ratios are stable and slight increase. It indicated that
new aircrafts are efficiently used to immediately generate the company,s revenue.

inancial gearing:
Ryanair uses more borrowing to fund its business during the period. In &''8# 5B > of
financial resource came from borrowing= however# the figure in &'1' rose to 8'>. It means
Ryanair relies on e1ternal finance to run its business. In case of interest cover# in &''9
operating income were negative# it is because of the financial crisis and surge increase fuel
price# therefore it could not cover its interest# all of other years for this periods# interest cover
were around 5 and 8 times. It shows that the $ompany has strong ability to pay its debts.
3nvestment 1atios
he earnings generated by Ryanair, business has decreased during the period. It seems that
the prospect of Ryanair,s share was not good. In term of .I(# trend in .I( dropped
considerably during the period from &''- to &''9 and has recovered after &'1'. his
recovery in &'1' of .I( ratios shows that investors e1pect a better prospect of the Ryanair,s
business.
2.2 The comparison between the performances of +yanair with
industry average,
he performance of Ryanair is better than the industry average performance in many
places in the world. R+( of Ryanair is 1&#89> meanwhile the ratio of airlines in other
regions such as (uropean Union and Gorld suffered a loss or 0eeping low rates (uropean
Union :2on4(uro; and United Kingdom were 8.'B> and 11.&1> respectively.
Ryanair, current ratio and 3uic0 ratio has remained at 1.89>. $omparing to the airline
industry in many places in the world# Ryanair has maintained an average high level in both
current ratio and 3uic0 ratio than its competitors. In other words# Ryanair has a better
position than average airline industry to meet its short4term financial obligations.
Page 6-
Evaluating Financial Performance of Ryanair
In terms of mar0et capitaliCation# Ryanair is more than 6 times larger comparing
airline industry company average.
)outhwest is the low cost airline which has the highest revenue# D8.8 billion. he
following is !ir 9erlin and Ryanair which Revenue are appro1imately D6.-& and D6.8 billion.
Ryanair is the biggest low fare airline regarding profit after ta1# appro1imately D6-B.8
million that is higher than the profit after ta1 of )outhwest. )outhwest is the biggest airline in
terms of total assets# while Ryanair is the second biggest that owns assets nearly double to the
rest of low fare airlines.
Ryanair,s financial performance is better in comparison to that of other low cost
airlines as a whole# in terms of profitability. +nly profitability ratios of !ir !sia are better
than that of Ryanair. In fact# !ir !sia, R+$(# R+)H are 9.8> and &9.15> respectively.
*eanwhile# R+$( and R+)H of Ryanair are lower -.88> and 1&.88>. Fowever# the siCe of
!ir !sia is much smaller compared with Ryanair.
RyanairJs ratio salesIassets is lower than other main low fare airlines. It means
Ryanair utiliCes its assets less effectively than others. In fact if Ryanair invests D1 in assets# it
generates only D'.B5 pence. Fowever if )outhwest invests D1 in assets# it generates D'.-8
pence# and that for (asy5et is D1 investment in assets# it generates D'.-- pence.
2.& The comparison between +yanair and 1asy2et,
The comparisons the difference strategies:
Ryanair and (asy7et are operating as the same mode< low4fare airlines# there some
difference between the two carriers<
4 (asy5et tends to use central# primary airports# so carrying higher costs and charges.
Ghile Ryanair uses secondary and regional airports.
4 (asy5et uses the mi1ed team of !irbus and 9oeing that would drive costs of pilot
training# maintenance and operation of its fleet up. *eanwhile# Ryanair continued to use it
pure 94-6- fleet.
4 In term of e1pansion# Ryanair is somewhat more successful than (asy5et. In the
*N! deal to ac3uire Mo# Ryanair paid only a net D1million on a carrier with B million
passenger base while (asy5et spent DB'' million on another potential 5 million passenger
airliner.
Page 68
Evaluating Financial Performance of Ryanair
The Comparison financial performance "etween 1!anair and 2as!9et:
Profita"ilit! ratio anal!sis
1OC2C 1OS:
Ryanair and (asy5et,s R+$( and R+)H have decreased between &''8 and &'1' due to a
considerable increase in operating profit. It is because of the negative effect of the financial
crisis and surge increasing fuel price. In general# Ryanair,s R+$( and R+)H are better than
that of (asy5et all of the time. +nly in &''9 Ryanair,s R+$( is negative 46.8> and 48.98>
while that of (asy5et,s is &.1> and 5.B5>.
2fficienc! ratios and Liquidit! ratios anal!sis
ixed asset turnover:
(asy5et, fi1ed assets turnover is higher than that of Ryanair during the period. In other words#
(asy5et has been more effective in utiliCing its fi14assets to generate sale revenue than
Ryanair. In fact# in &'1' if (asy5et invested D1 in fi14assets# it would generate D1.& in
revenue. Fowever if Ryanair invested D1 in fi14assets# it would generate only D'.88 in
revenue.
Trade 1eceiva"les collection period:
Ryanair,s trade receivables collection days stay low level around 5 to 8 days# while that of
(asy5et are very high over &' days in &''9. It means Ryanair needs around 5 to 8 days to
collect money from their customers= meanwhile (asy5et needs more than &' days to get the
receivables settled. It shows that the ability to management of Ryanair, cash flows much
better than that of (asy5et.
Trade pa!a"le pa!ment period:
he number of days that Ryanair ta0e to pays for its suppliers is longer than (asy5et all of
these years. In other words# Ryanair has been more and more using free source of finance
provided by its supplier than (asy5et. It primarily due to Ryanair,s is bigger of the business
scale and it achieves the favorable conditions from its suppliers. In addition# both companies
have trend increasing the use of free source of finance provided by suppliers to their
business.
Page 69
Evaluating Financial Performance of Ryanair
Current ratio:
here is decrease in ability to pay the debt in both companies during the period between &''8
and &'1'. In fact# in &''8 Ryanair had O&.B6 in li3uid assets for every O1 it owes. Fowever#
in &'1' Ryanair had only O1.98 in li3uid assets for every O1 it owes. he figural for (asy5et
was much lower in &''8 O&.11 in li3uid assets for O1 borrowing and in &'1' O1.B& for O1 it
owes. Fowever# the ratio of both is 3uite good# and it does not have short4term debt problems
in both companies. In addition# Ryanair, ability to pay its short4term liabilities is better than
(asy5et all the time.
Aearing ratio:
he gearing ratio of (asy is slightly higher than that of Ryanair. In &''8# 5B> of financial
resource of Ryanair came from borrowing# however# the figure in &'1' rose 8'>. In the same
time# the figure for (asy5et was 5B> in &''8 and 86> for &'1'. o sum up# both Ryanair
and (asy5et are being more relied on e1ternal finance to run their business
3nvestment ratio anal!sis
2PS:
he trend in earnings per share of Ryanair decreased from B' pence per share in &''8 to
411.BB pence per share in &''9 and then recovered to &'.88 pence in &'1'. In contrast# there
was a fluctuation in earning per share of (asy5et between 18.9 pence per share and 6B.8
pence per share during this period of time. o sum up# (.) of (asy5et is more stable than
that of Ryanair. )o the prospect of (asy5et seems to be more stable than Ryanair,s.
P<2 ratio:
wo airline companies, .I( fluctuates during 5 years period. herefore# the confidence of
two airline companies, shareholders varies. Fowever# in &'1' Ryanair,s .I( is higher than
that of (asy5et# so it may indicates investors will e1pect a better future prospect of Ryanair.
2mplo!ee ratio:
urnover per employees ratio of (asy5et is higher than that of Ryanair all of the time. It
means that easy5et,employees is higher productivity in comparison to that of Ryanair in
terms of generating revenue.
Fowever# in case of profit per employee# each employee of Ryanair generates more profit
than (asy5et,s during 5 years period. It due to Ryanair is better off reducing unnecessary
operating e1penses.
Page B'
Evaluating Financial Performance of Ryanair
Overall Conclusion:
o sum up# although Ryanair is e1panding its businesses# in terms of number of pasengers#
new routes# fleets# employees# the financial perfomance of Ryanair during &''8 to &'1' is
not so impressive. It is because of negative effects such as surging oil price as well as strong
competition in airline industry. Fowever# the financial performance of Ryanair is much better
than the closest competitor (asy7et as well as other low fair airlines as a whole.
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Evaluating Financial Performance of Ryanair
& +eferences and 'ib!iography
&*R*"+thari,2004-* Research meth+.+%+)y/ #eth+.s an. techni0ues* 1e! A)e 2nternati+na%*
'er3e4 5* 5rnhau) " ,2010-* Research meth+.s in 6usiness stu.ies* F7 'rentice 8a%%*
J+se9h F*8air,Fr*, Arthur 8*#+ney, 'hi%%i9 :am+ue%, #i;e 'a)e,2007-/ Research #eth+.s
f+r 6usiness* <est 5ate/ J+hn <i%ey= :+n Lt.*
$a3i. A%e>an.er, Anne ritt+n, Ann J+rissen* ,2007-* 2nternat+na% Financia% Re9+ritin) an.
Ana%ysis* L+n.+n/ 7h+ms+n Learnin)*
5e+r)e 7*Frie.%+6, Ly.ia L*F*:ch%eifer ,2003-* Essentia%s +f financia% ana%ysis* 1e!
Jersey/J+hn <i%ey = :+ns*
$anny #i%%er,1988-* Re%atin) '+rter?s usiness :trate)ies t+ En3ir+nment an. :tructure/
Ana%ysis an. 'erf+rmance 2m9%icati+ns* Ace.emy +f #ana)ement J+urna% 1988 @+%*31 1+ 2,
280A308*
5erry J+hn "e3an :ch+%es an. Richar. <hittin)t+n ,2005-* E>9%+rin) &+r9+rate :trate)y/
7e>t an. &ases* Esse>/ 'ears+n E.ucati+n Limite.*
'hi%i9 B?Re)an*,2006-* Financian% 2nf+rmati+n Ana%ysis* L+n.+n/ J+hn <i%ey = :+ns Lt.*
'au% <ether%y an. $+rr+n Btter ,2011-* 7he usiness En3ir+nment/ 7hemes an. 2ssues*
B>f+r./ B>f+r. Cni3ersity E>9ress*
:i+han &reat+n,2004-* Ryanair/ h+! a sma%% 2rish air%ine c+n0uere. Eur+9e* L+n.+n/
Aurum 'ress Lt.*
&reat+n an. :i+6han,2007-* Ryanair/ 7he fu%% st+ry +f the c+ntr+3ersia% %+!Ac+st air%ine*
L+n.+n/ Aurum 'ress Lt.*
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Evaluating Financial Performance of Ryanair
'eter Atri%% ,2009*- Financia% mana)ement f+r .ecisi+n ma;ers* /F7 'rentice 8a%%*
<en.y #c"en4ie ,2010- Csin) an. inter9retin) c+m9any acc+unts* /F7 'rentice 8a%%*
'au% &ashian ,2007-* Ec+n+mics, strate)y an. the firm* 8am9shire/ 'a%)ra3e #ac#i%%inan*
'at 8an%+n ,2007-* 5%+6a% air%ines/ &+m9etti+n in a transnati+na% in.ustry* B>f+r./
E%se3ier Lt.*
Atrill and McLaney (2008). Accounting and Finance for Non-Specialists. FT rentice !all.
Ryanair annua% re9+rts 2006, 2007, 2008, 2009, 2010 are a3ai%a6%e +n%ine at
htt9/DD!!!*ryanair*c+mDenDin3est+rD.+!n%+a.D
EasyJet annua% re9+rts 2006, 2007, 2008, 2009, 2010* are a3ai%a6%e +n%ine at/
htt9/DDannua%re9+rt*easyEet*c+mD
Ray 'r+ct+r ,2009-* #ana)eria% Acc+untin) f+r 6usiness .ecisi+ns* Esse>/ 'ear+n
E.ucati+n Limite.*
Jae "* :him an. J+e% 5*:ie)e% ,2007-* 8an.6++; +f financia% Ana%ysis, F+recastin), an.
#+.e%in)* &hica)+/ &&8*
:te9hen 8+%%+!ay ,2003-*:trai)ht an. Le3e%/ 'ractica% Air%ine Ec+n+mics* 8am9shire/
:te9hen 8+%%+!ay*

Ri)as $+)anis ,2001-* 7he air%ine usiness in the 21
st
century*L+n.+n/ R+ut%e.)e*
:te9hen :ha! ,2011-* Air%ine #ar;etin) an. #ana)ement* B>f+r.shire/ Ash)ate 'u6%ishin)
Limite.*
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Evaluating Financial Performance of Ryanair
J+hn 5*<ens3een,2007-* Air 7rans9+rtati+n/ A #ana)ement 'ers9ecti3e* 8am9shire/
Ash)ate 'u6%ishin) Limite.*
Richar. .e 1euf3i%%e an. Ame.e+ B.+ni ,2003-* Air9+rt :ystems/ '%annnin), .esi)n an.
#ana)ement* 1e! F+r;/ the #c5ra!A8i%% &+m9anies* s
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