Financing and Real Investment Essay Example | Topics and Well Written Essays - 1000 words

finance and Real Investment - Essay ExampleThe Ryan family of UK started the business with 1 15-seater Bandeirante aircraft and 25 staffs. Within the span of little than 30 years, it has become the best low cost line service provider in entire European grocery. It is operating in the European market with 8,896 staffs, 272 Boeing 737-800 serving more than 73,553,580 passengers annually. It has achieved tremendous growth in terms of finance, passengers and market share. Its no-frill scheme for low cost has made it to achieve cost leadership in their entire Europe (RyanAir, History of RyanAir). Competitive Position of RyanAir With rapid growth of passengers and market share, it is become the leader of low cost airline industry. Its effective no-frill strategy for low cost leadership has brought a revolution in the market. It has been able to achieve the upper hand position in the market by crack lowest prices, by serving the largest coverage and by achieving the highest traffic gro wth. The following figure presents a comparison of low cost competitors in the European market. ... Financing and Real Investment Activities in RyanAir With the change magnitude market share and increasing volume of operational business, RyanAir requires a significant amount of aircraft and other assets including plant, property and equipment. As per the reported consolidated balance sheet of 2011, RyanAir has increased its net value of plant, equipment and property by 619.5 million. The consolidated funds flow of RyanAir has presented the 897.2 million outflow of cash in 2011 comparing to 997.8 millions in 2010. However, 2011, RyanAir has made lower investment comparing to the previous years but, management has decided to invest in the real assets with increasing market share (RyanAir-c, p.3-8). The monetary activities of RyanAir also show a positive indication. The management has disclosed that within the last three years, RyanAir has returned 850 million to its shareholders bu t chill out its financial position is quite. In 2011, the net cash flow from financing activities has reduced in 2011 as it has repaid the long term borrowings of 280.7 million and also annoying dividend to shareholders of 500.0 million. This is good indication for the shareholders as in spite of paying 500.0 million of dividends its retained earnings stood at 1,967.6 million. Besides, the company has also made investments in financial assets and derivatives in the previous years and in 2011, it holds the Derivative financial instruments of 23.9 million and Available for sale financial assets of 114.0 million (RyanAir-c, p.3-8). A5 Introduction In order to mensurate the financial condition of any organisation, the financial analysis techniques are quite necessary important. However, for the financial analysis techniques, certain skills are required which is