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A. Profitability (Ability at Generating Profits) Return On Capital Employed (ROCE)
A. Profitability (Ability at Generating Profits) Return On Capital Employed (ROCE)
2628
10 0
9676
ROCE 2015=27.15
ROCE 2014=
859
10 0
7924
ROCE 2014=10.84
ROCE 2013=
300
10 0
7294
ROCE 2013=4.11
B. Liability ratios
Current Ratio (CR)
Current Assets
CR=
Current Liabilites
CR2015=
3400
=0.59:1
5700
CR2014=
3583
=0.61:1
5824
CR2013=
2915
=0.62 :1
4627
Current AssetsInventory
Current Liabilites
3400139
=0.57
5700
3583133
=0.62
5502
2915110
=0.60
4627
Interest cover
Interest Cover =
2628
=17.87
147
859
=6.09
141
300
=1.70
176
Pestel analysis
Political factors
British Airways is one of the most important international airline company which operates on more
than 400 destinations worldwide. Political factors can have a significant impact on the BA company.
These factors can easily affect the stability of the organization or the perception of safety the
population. A tremendous negative impact has the terrorist attack from Brussel Airport in March
2016. This political factor gave rise to the decline of British Airways owner, International Airlines
Group (IAG), share price by 1.5 per cent. (theguardian.com, 2016)
Furthermore, the airline company seems to be engaged in a political debate for claiming a third
runway at Heathrow Airport from the UK government. The chief executive of BA's parent company
IAG has warned that he could search to expand the company overseas if the Government will not
give them the permission. (The telegraph, 2015)
Economic factors
Currency exchange, inflation rate and the overall economic climate from the UK has influenced
directly the performance of British Airways. The cost
The cost of fuel is another significant economic factor for British Airways, since the
Group used approximately 5.7 million tonnes of jet fuel in 2015 only.[3] For
example, in 2015, British Airways expenses on fuel decreased by 484 million, or
13.8 per cent compared to the previous year despite the increasing scope of
operations[4]. Accordingly, a decrease of the prices of fuel proved to be an
important economic factor that greatly benefited the business.