This is a poor use of the company's capital, since the global economy remains weak and since Qantas faces intense competition on numerous fronts. While increasing the debt component of the capital structure would lower the overall cost of capital, it would also increase the risk that the company faces. The operating environment is turbulent, not just from competition but from high fuel costs as well. This implies that any additional risk would compromise the security that Qantas currently has with respect to meeting its debt service obligations.
While Qantas' balance sheet looks remarkably unchanged as the result of the global economic crisis, this is only because of the proactive measures the company took at the outset of the crisis. The equity issue allowed the company to maintain its capital structure at a time when profits (and therefore retained earnings) were declining sharply. The company also made a number of tactical operational moves that helped it weather the crisis. When the airline business was stronger in the mid-00s, it invested heavily in Jetstar and that unit propped up the flagship brand, which suffered as its international routes saw declines in demand. The response of the company to the crisis was excellent, and in light of that and the current operating environment there is no need at all to alter the capital structure of Qantas.
Works Cited:
de Bruyn, C. (2009). Global airline industry to suffer $4.7 billion loss this year. Engineering News. Retrieved October 9, 2011 from http://www.engineeringnews.co.za/article/global-airline-industry-to-suffer-47bn-loss-this-year-iata-2009-03-24
Business Plan: Bridal Salon Business Products and services Keys to Success Company description Vision Statement Mission Statement Company background Products and Industry Product Description Industry Description The Market Market and Target Customer Market Segmentation Target Market Strategy Competition and Competitive Advantage Curbing Local Competition Curbing Regional Competition Marketing Strategy Overall Strategy Sales Plan Competitive Plan Research and Development (Growth Plan) The Organization Legal and Organization Structure Key Personnel Related Service Providers Location The Financials Critical Risks Income Statement Cash Flow Projection Balance Sheet Assumptions References Executive Summary Introduction Pace-setter is a bridal salon that rides on the theme of 'experience'. It creates an environment in which
Business Description Definition of the Market Description of the Products Organization and Management Descriptions Marketing Strategies Financial Management This paper presents business plan for a new leather garment manufacturing and retailing business. The business is being set up with an initial capital outlay of $53 million. The paper starts with a brief description of the business; its target market and product offerings, and then proceeds by proposing organizational and management strategies, marketing strategies, and financial management
Business Plan GBSGreen Building Solutions Company Description Product & Service Description Marketing Strategy & Plan Environmental Analysis (SWOT/PEST) Competitive Analysis Products and Services Pricing Promotion People Financial Analysis & Projections Profit and Loss Risks and Assumptions GBSGreen Building Solutions Business Plan According to the Environmental Protection Agency (EPA) the impact of commercial buildings on the physical and social environment are such that there is "not questioning the vast impact…" (Environmental Protection Agency, 2006) Commercial Buildings are reported by the U.S. Department of Energy's Energy Information Administration
[2: www.med.govt.nz/business/business.../structure-and-dynamics-2011.... ] The primary research of the Auckland market presents the following sectors for consideration for the new venture: The demographics in the target market include: college going and married women with children who either are working mothers or stay-at-home mothers; this makes the age group anywhere between 25 to 55; the overall annual income of the household is more than AUS $100,000; the property owned by the target individual
As part of the research triangle, Raleigh has a significant portion of its population that fits the target market. For the Farmery to succeed, it only needs to capture a small portion of the market share. This is especially true because the store has a small footprint, and has the flexibility to set up on vacant lots without the costs of either renting or developing fixed real estate. The
Business Plans Investment Decisions An Analysis of Three Business Plans in Regards to their Riskiness This paper will examine three separate business plans and rate these plans based on the level of risk and the cost of capital that should be awarded to these plans. Of the three plans considered, a plan for an expansion of a coffee production facility in South America carries the least risk. An investment opportunity for a truck
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now