Comparing the financial performance of Qantas and Woolworths. Discuss the aspects of the financial information that may be insufficient or misleading.

Essay by leannlsmUniversity, Bachelor's June 2004

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I have chosen Qantas Airways Limited & Woolworths Limited to be examined in this literature. Qantas is Australia's leading domestic carrier and one of the world's premier long haul airlines. Qantas is also one of Australia's most recognized brand names, with a reputation for excellence in safety, operational reliability, engineering and maintenance, and customer service. Woolworths' Supermarket is Australia's leading food retailer which provides customers with the best-priced and widest range of fresh produce, dry groceries and other merchandise, underpinned by its quality assurance commitment.

However, from January 2003 onwards, due to the tumultuous events of 9/11, the bombings in Bali, the war in Iraq and the devastating outbreak of Severe Acute Respiratory Syndrome, all areas of Qantas were affected, including the profitability of the company throughout the year. Qantas recorded an EBIT of $567 million, down from $112.3 million last year after being severely impacted by the effects of the SARS virus on international air travel.

( Contrasting with Woolworths, it achieved an EBIT with increase of 13.7% to $945.7 million, reflecting the excellent sales and profit growth accomplished in the market with further reductions in the operation costs. (

In comparing the financial performance of both the companies, Qantas and Woolworths generated a return of 2% and 8.15% on total assets respectively and a return of 6.5% and 49.34% on owners' equity respectively. This shows that Woolworths performs better in terms of both the return on total assets and return on owners' equity than Qantas, allowing us to say that Woolworths appears to be performing significantly better in the efficiency of the use of assets and in making returns for the shareholders.

There is a large contrast between the financial performance of Qantas and Woolworths. According to the annual report, all key performance measures, such as EPS before...