Financial Analysis of the Hainan Airlines

Abstract

The goal of this thesis is to give financial analysis to Hainan Airlines company, which is one of the largest airlines in China, by applying basic financial methods and provide information about its business situations during year 2010 to 2014. The thesis can be divided into six chapters. Chapter 1 is the introduction of the thesis’s main purpose and its structure while chapter 6 is the conclusion that summaries whole thesis. In chapter 2, is the description of all financial methods that will be used in chapter 4, including principles and formulas that will be used in analyzing the situation of Hainan Airlines based on its financial data. In chapter 3, is the overview of Hainan Airlines including its history, development, logo and culture. In chapter 4, is the application of financial analysis to Hainan Airlines. This chapter is also the most important, core chapter of this thesis. Applying methods introduced in chapter 2 to show the company’s value and business situations with four parts in total. First part in this chapter is applying common-size analysis to three basic financial statements of Hainan Airlines, the second part is the financial ratio analysis including four aspects which are profitability ratios, liquidity ratios, leverage ratios and activity ratios, the third part is about pyramidal decomposition and influence quantification and the last part is the sensitivity analysis. In chapter 5, is the industry analysis and comparison which mainly focus on the comparison between “Hainan Airlines” and “China Southern Airlines”. Comparisons are made by accessing Solvency data, Operating data and profitability of these two companies.

The goal of this thesis is to give financial analysis to Hainan Airlines company, which is one of the largest airlines in China, by applying basic financial methods and provide information about its business situations during year 2010 to 2014. The thesis can be divided into six chapters. Chapter 1 is the introduction of the thesis’s main purpose and its structure while chapter 6 is the conclusion that summaries whole thesis. In chapter 2, is the description of all financial methods that will be used in chapter 4, including principles and formulas that will be used in analyzing the situation of Hainan Airlines based on its financial data. In chapter 3, is the overview of Hainan Airlines including its history, development, logo and culture. In chapter 4, is the application of financial analysis to Hainan Airlines. This chapter is also the most important, core chapter of this thesis. Applying methods introduced in chapter 2 to show the company’s value and business situations with four parts in total. First part in this chapter is applying common-size analysis to three basic financial statements of Hainan Airlines, the second part is the financial ratio analysis including four aspects which are profitability ratios, liquidity ratios, leverage ratios and activity ratios, the third part is about pyramidal decomposition and influence quantification and the last part is the sensitivity analysis. In chapter 5, is the industry analysis and comparison which mainly focus on the comparison between “Hainan Airlines” and “China Southern Airlines”. Comparisons are made by accessing Solvency data, Operating data and profitability of these two companies.