Flight Centre Analysis

6875 words 28 pages
5/23/2013 | By Peou Prak, Rina Nugraha, Alice Yang | Flight Centre Limited | Flight Centre Limited Fundamental analysis |

Flight Centre Limited | Flight Centre Limited Fundamental analysis |

Contents

Objective 3 Introduction 3 Business and Strategy Analysis 4 Accounting Analysis 12 Financial Analysis 16 Prospective Analysis 18 Conclusion and Recommendation
Appendices………………………………………………………………………………………………………………………………………26-31
No table of contents entries found.

1.0 Objectives
The purpose of this report is to provide a fundamental analysis of Flight Centre Limited (Ltd) and provide recommendation for investors wishing to invest in this company. The recommendation was made based on a number of critical
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Hence it will benefit those listed companies that have stocks on ASX.
The impact of this relative low Australian dollar on FLT will have mixed views on the revenue growth and its operation. It would negatively impact on the outbound travelling especially in Australia as it accounted for 55.75% of the total revenues. This is because the fall in Australian dollar against major foreign currencies would make overseas travels become relatively more expensive than before. Conversely, this will benefit the offshore operations which now accounts for around 40% of revenues and still growing. Also, FLT would be expected to increase its revenue as there will be a shift to domestic travelling. In a nutshell it can be seen that the low value of Australian dollar does not cause a major concern at this stage.
2. Interest rate fluctuation
FTL has a global presence in their operation therefore changes to the cash rate would adversely affect its revenues. A recent reduction in the Australia variable rate by 0.25% would stimulate the Australian economy and reduce the provision of loan interest expense by FLT. therefore, a fall in the variable rate will positive impact on the company’s net margins as Australia accounted more than 55% of the group revenues.
3. Recovery of China economy
According to the UNWTO,

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