The airline brand of Qantas work locally, internationally and regionally services, the diversified portfolio of Group of subsidiary based business such as Qantas Freight Enterprises and Qantas Frequent Flyer and so on (Qantas, 2018).
The Chief Executive Office of the Qantas which is an airline company based in Australia is Alan Joyce (Qantas, 2018).
The CEO of the Qantas has the pat structure of A$25m, CEO which is Alan Joyce is stated as the highest paid executive of airline throughout the world twice the annual structure to A$24.5m, subsequent to the turnaround at the airline of Australia.
In the year 2017, the profit after tax of the Group was $853m (Annual Report of Qantas, 2017).
|
Qantas Group |
|
|
Dividend |
0.22 |
|
Date |
September 12, 2018 |
In the year 2017, the total assets of the Qantas Airways were 18,026.
The Qantas Airways Limited in the year has employed 29596 employees with Australia inclusive of the employees from each and every subsidiary under the supervision of company (Qantas, 2017).
The Seek Limited suits the jobseekers and recruits with better future and career-related scope and associated online services. It also offers and distributes vocational based training and development with the best educational courses available. In addition, it also provides advertisement services as well as online based employment (Annual Reports.com, 2018). The products of the company are inclusive of TalentSearch, recommendations and Talent Search, alongside the service including employment and job Finder Company, integrated with the top-notch and renowned brands.
The Co-founder as well the Chief Executive Officer of the Seek Limited is Andrew Reuven Bassat (Seek, 2018).
The CEO of the Seek Limited have earns salary of AU$175,463 on a yearly basis approximately.
During the year the net profit after tax was $ 362.0m.
(Source: Yahoo Finance, 2018)
|
Qantas Group |
|
|
Dividend |
0.1 |
|
Date |
September 5, 2018 |
As on June 2017, the Seek Limited possessed the total assets of $3,683.0m wherein the 73% belonged to long-life intangible assets (Annual Report of Seek Limited, 2017).
The listing of Seek limited is done on the Australian Securities Exchange, wherein it is considered one of the 100 companies, having employees of more than 6000.
(Source: Yahoo Finance, 2018)
|
Date |
Open |
High |
Low |
Close |
Adj Close |
Volume |
|
Qantas Ltd |
||||||
|
13-08-18 |
6.64 |
6.71 |
6.585 |
6.61 |
6.506232 |
2326112 |
|
Seek Ltd |
||||||
|
13-08-18 |
20.37 |
20.51 |
20.07 |
20.14 |
19.93411 |
574503 |
b)
Figure 1: Share price movements of Qantas and Seek Ltd
Table 1: Statement showing share price movements
(Source: Yahoo Finance, 2018)
|
Date |
The closing price of Qantas ($) |
The closing price of Seek Ltd ($) |
|
13-08-18 |
6.61 |
20.14 |
|
14-08-18 |
6.6 |
20.65 |
|
15-08-18 |
6.61 |
21.29 |
|
16-08-18 |
6.74 |
21.97 |
|
17-08-18 |
6.62 |
22.31 |
|
20-08-18 |
6.76 |
22.06 |
|
21-08-18 |
6.83 |
21.93 |
|
22-08-18 |
6.72 |
21.88 |
|
23-08-18 |
6.53 |
21.33 |
|
24-08-18 |
6.35 |
21.63 |
|
27-08-18 |
6.39 |
21.96 |
|
28-08-18 |
6.45 |
22.17 |
|
29-08-18 |
6.57 |
21.88 |
|
30-08-18 |
6.44 |
22.37 |
|
31-08-18 |
6.43 |
22.40 |
|
03-09-18 |
6.42 |
22.68 |
|
04-09-18 |
6.37 |
22.52 |
|
05-09-18 |
6.25 |
22.21 |
|
06-09-18 |
6.15 |
21.51 |
|
07-09-18 |
6.19 |
21.29 |
Figure 2: Movements in All ordinary index
Table 2: Statement showing movements in all ordinary index
(Source: Yahoo Finance, 2018)
|
Date |
The closing price of All ordinary index |
|
13-08-18 |
6341.3 |
|
14-08-18 |
6386.2 |
|
15-08-18 |
6415.7 |
|
16-08-18 |
6412.6 |
|
17-08-18 |
6426.2 |
|
20-08-18 |
6435.1 |
|
21-08-18 |
6383 |
|
22-08-18 |
6373.8 |
|
23-08-18 |
6360.3 |
|
24-08-18 |
6357.9 |
|
27-08-18 |
6381.1 |
|
28-08-18 |
6413.6 |
|
29-08-18 |
6457 |
|
30-08-18 |
6460.5 |
|
31-08-18 |
6427.8 |
|
03-09-18 |
6416.5 |
|
04-09-18 |
6398.9 |
|
05-09-18 |
6339.2 |
|
06-09-18 |
6267.8 |
|
07-09-18 |
6252.3 |
c) Table 3: Comparison of movement of stock price and all ordinary index
(Source: Yahoo Finance, 2018)
|
Date |
Movements of Qantas stock |
Movement of All ordinary index |
Movements of Seek stock |
|
13-08-18 |
0 |
0 |
0 |
|
14-08-18 |
-0.01 |
44.90039 |
0.510001 |
|
15-08-18 |
0.01 |
29.5 |
0.640001 |
|
16-08-18 |
0.13 |
-3.1001 |
0.679998 |
|
17-08-18 |
-0.12 |
13.6001 |
0.34 |
|
20-08-18 |
0.14 |
8.899903 |
-0.25 |
|
21-08-18 |
0.07 |
-52.1001 |
-0.13 |
|
22-08-18 |
-0.11 |
-9.2002 |
-0.05 |
|
23-08-18 |
-0.19 |
-13.5 |
-0.55 |
|
24-08-18 |
-0.18 |
-2.3999 |
0.299999 |
|
27-08-18 |
0.04 |
23.2002 |
0.33 |
|
28-08-18 |
0.06 |
32.5 |
0.210001 |
|
29-08-18 |
0.12 |
43.3999 |
-0.29 |
|
30-08-18 |
-0.13 |
3.5 |
0.490002 |
|
31-08-18 |
-0.01 |
-32.7002 |
0.029999 |
|
03-09-18 |
-0.01 |
-11.2998 |
0.28 |
|
04-09-18 |
-0.05 |
-17.6001 |
-0.16 |
|
05-09-18 |
-0.12 |
-59.6997 |
-0.31 |
|
06-09-18 |
-0.1 |
-71.4004 |
-0.7 |
|
07-09-18 |
0.04 |
-15.5 |
-0.22 |
The Qantas Airways Limited share price is positioned at the 52-week increased, irrespective of the fact that the company is providing no news in the market presently (James, 2018). The lift in share price back to the various upgrades in brokers comprising from Goldman Sachs lately to a ‘buy’. However, in comparison to a market index, there is a contradictory trend but due to the lower beta performance of the company is overall good and it is expected that the price of the company will be increased in the near future.
The Seek Limited shares have forced increasing trend today and have arrived at high of very first time at $21.34. Further, these current earnings state that the shares of Seek have shown a tremendous rise of 30% seeing as this time last year (Motley Fool Staff, 2017). The company is performing far better than the market index as despite reduction in the index there is an increase in share price or less decline in price.
d) Table 4: Statement showing the computation of Gain or Loss on the portfolio in the tracking period
|
Initial amount of investment |
$5,000 |
$5,000 |
$10,000 |
|
Opening value of a share |
$6.61 |
20.14 |
|
|
No of share purchased (A/B) |
756 |
248 |
|
|
Closing value of share |
$6.19 |
$21.29 |
|
|
Value of investment |
$4,682 |
$5,286 |
$9,968 |
|
Gain or loss |
($318) |
$286 |
($32) |
|
Company |
Recommendation |
Justification |
|
Qantas Ltd |
Buy |
The share price of the company is declining, but the overall performance of the company is strengthening thus it is expected that there will be a hike in the long term in share prices of the company. |
|
Seek Ltd |
Sell |
The company is performing far better than the market index as despite reduction in the index there is an increase in share price or less decline in price which shows it is right time to sell the profits of the company to realise the gain. |
|
Qantas |
Seek limited |
|
|
Revenue / Sales |
16,057 |
1230.5 |
|
Interest Expense |
(189) |
(29.3) |
|
EBIT |
1,590 |
449.1 |
|
Net Profit Before Tax |
1,181 |
437.3 |
|
Net Profit After Tax |
853 |
362.0 |
|
Inventory |
||
|
Current Assets |
3,119 |
841.9 |
|
Total Assets |
6,355.8 |
3,683.0 |
|
Current Liabilities |
7,095 |
550.0 |
|
Total Liabilities |
13,681 |
1,643.1 |
|
Total Equity |
3,540 |
2,039.9 |
(Source: Annual report)
|
Liquidity ratios |
Formula |
Qantas |
Seek |
|
Current assets |
3,119 |
841.9 |
|
|
Current liabilities |
7,095 |
550 |
|
|
Stock |
351 |
0 |
|
|
Profitability ratios |
Formula |
Qantas |
Seek |
|
Sales |
16,057 |
1230.5 |
|
|
Operating profit |
1,590 |
449.1 |
|
|
Net profit |
853 |
362 |
|
|
Solvency ratio |
Formula |
Qantas |
Seek |
|
Debt |
13,681 |
1,643.10 |
|
|
Equity |
3,540 |
2,039.90 |
|
|
Total assets |
6,355.80 |
3,683.00 |
|
|
Debt to equity ratio |
Debt / equity |
3.86 |
0.81 |
|
Equity ratio |
Equity / total assets |
0.56 |
0.55 |
The profitability of the firm shows moderate performance, as compared to the profits of Seek Limited. However, the company has still scope of improvement so as to ensure a reasonable flow of operations and working capital with better profitability.
In terms of solvency ratio, the Qantas Group is performing well; the company has effectively managed both liability and assets, it has optimum utilized its total assets, while paid off the liabilities, reflecting the optimal management of working capital.
It can be said that the liquidity ratio the company is not matching the ideal ratio and required to be ideal in terms of the current ratio than 1:5, as because the company’s current ratio is showing minus trend.
The liquidity ratio of the company shows that the company has given more preference towards equity and less consideration towards debt, due to this there is the non-effective management of total assets. However, the company is required to stabilize the structure and make improvement in such areas. As, the company’s profits are increasing over time, so it is crucial for them to drive its ability to pay off its current liability by using its current asset
By considering the above table, it can be stated that company has improved its sales and revenues, and generated more profitability, overall, the company is performing good in the market, and is likely to perform much better in future times by focusing more on improvement areas.
The Seek limited has delivered excellent performance in terms of liquidity; the current ratio that is 1.53 is matching the ideal criteria. A good increase in the performance of the company has been noticed, reflecting the effective management of business operations and activities Stability ratio.
By considering the analysis it can be said that performance of Seek Ltd is comparatively better as they are having profitability and liquidity ratios. Therefore Seek Ltd is better option for investment.
References
Annual Report of Qantas, 2017. (pdf). Available from <https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2017AnnualReport.pdf >. [Accessed on 25 September 2018].
Annual Report of Seek Limited, 2017. (pdf). Available from < https://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_SEK_2017.pdf>. [Accessed on 25 September 2018].
Annual Reports.com, 2018. SEEK Limited (Online). Available from < https://www.annualreports.com/Company/SEEK-Limited>. [Accessed on 25 September 2018].
James, M, 2018. The SEEK Limited (ASX:SEK) share price just hit an all-time high: Too late to invest? (Online). Available from < https://www.fool.com.au/2018/06/12/the-seek-limited-asxsek-share-price-just-hit-an-all-time-high-too-late-to-invest/>. [Accessed on 25 September 2018].
Motley Fool Staff, 2017. Why the Qantas Airways Limited share price can’t stop climbing (Online). Available from < https://www.fool.com.au/2017/10/06/why-the-qantas-airways-limited-share-price-cant-stop-climbing/>. [Accessed on 25 September 2018].
Qantas, 2017. QANTAS GROUP FULL YEAR 2017 FINANCIAL RESULT (Online). Available from < https://www.qantasnewsroom.com.au/media-releases/qantas-group-full-year-2017-financial-result/>. [Accessed on 25 September 2018].
Yahoo Finance, 2018. Qantas Airways Limited (QAN.AX) (Online). Available from < https://in.finance.yahoo.com/quote/QAN.AX/history?period1=1534098600&period2=1536258600&interval=div%7Csplit&filter=div&frequency=1d>. [Accessed on 25 September 2018].
Yahoo Finance, 2018. SEEK Limited (SEK.AX) (Online). Available from < https://finance.yahoo.com/quote/SEK.AX/history?period1=1506327965&period2=1537863965&interval=div%7Csplit&filter=div&frequency=1d>. [Accessed on 25 September 2018].
Qantas, 2018. Our Company (Online). Available from < https://www.qantas.com/travel/airlines/company/global/en>. [Accessed on 25 September 2018].
Seek, 2018. SEEK Executives (Online). Available from < https://www.seek.com.au/about/executives/>. [Accessed on 25 September 2018].
Qantas, 2018. Our leadership (Online). Available from < https://www.qantas.com/in/en/qantas-group/acting-responsibly/our-leadership.html>. [Accessed on 25 September 2018].
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