Easy Jet is a Europe's leading airline, based at London Luton Airport and the largest in the United Kingdom, operates on over 600 routes across more than 30 countries. Easy Jet employs over 8,000 people including 2,000 pilots and over 4,500 cabin crew. In 2013 they flew over 60 million passengers. Easy Jet has strong positions in key markets: No. 1 at London Gatwick, London Luton, London Southend, Bristol, Edinburgh, Milan Malpensa, Naples, Venice, Nice, Basel and Geneva; No. 2 at London Stansted, Paris Orly, Paris Charles De Gaulle, Lisbon, Lyon, and Rome Fiumicino with over 300 million people within a one hour drive of an easy Jet airport. Its chief executive officer is today Carolyn McCall.
Easy Jet’s values 1. Safety : We never compromise on safety. 2. Simplicity : We cut out the things that don’t matter to keep us lean and make it easy. 3. One team Together we’ll always find a way. 4. Integrity : We stand by our word and do what we say. 5. Passion : We have a passion for our customers, our people and the work we do. 6. Pioneering : We challenge to find new ways to make travel easy and affordable
Consolidated balance sheet Easyjet
Extracts annual report 2014 Financial performance 1. Quick ratio/acid ratio = (cash + cash equivalents + Accounts/Receivables) / current liabilities (in million £) = ( ) / 1420 = 0.44
3. Current ratio = current assets / current liabilities (in million £) = 1261 / 1420 = 0.89
The current ratio is higher than the quick ratio. This shows that the company’s assets are more dependent on its inventory. The current ratio is slightly less than 1 which suggests that the company could not meet its obligations if they came due at the time of the balance sheet. On the other hand, the quick ratio measures the short-term solvency. For EasyJet we could say that it does not have the strongest liquidity position, because the quick ratio is rather low.
2. Equity ratio = shareholders’ equity / total assets (in million £) = 2172 / 4482 = 0.48
Half of the total assets consists of shareholder’s equity. The result of the equity ratio shows that the company has relatively many debts. The percentage is not so high, thus the risk is quite high.
4. Earnings per share = after-tax profit / numbers of shares outstanding = 113.2
The ratio earning per share shows that every share that a shareholder owns, is worth £ This seems good, but we must compare this with the price of the share in order to evaluate the proceeds of the share.
5. Gearing = total liabilities / shareholders’ equity (in million £) = 2310 / 2172 = 1.06
The gearing of the company is not that high, but still point to a high dependence on borrowing and long term financing.
Conclusion: After checking the ratio’s from easyjet the conclusion is that the company does well financially but his liquidity position is not very strong and neither is his capability of meeting his obligations and cover his debts at the time of the balance sheet.