Allegiant Report Essay Example | Topics and Well Written Essays - 500 words

Allegiant Report - Essay ExampleIn 2007 the net margin (net income / sales) of the companion was 8.74%. Based on the company yearly growth prediction of an above 10% the company was not able to meet its profitability targets, but it serene perform better than the industry average of about 2% (Bachman).One of the weaknesses of the companys growth strategy is that it does hedge adequately against the hazard of higher(prenominal)(prenominal) fuel costs. In the article the readers of the material learned that the company utilized a fleet that was on the average 18 years aging. The utilization of old inefficient planes hurt the companys operating efficiency. A company that takes great pride in its ability of lower costs has an inherent and domineering deficiency in its cost structure. Gasoline represents the second largest costs for a typical airline after only the cost labor of the airplanes crews and administrative personnel. other business risk of the company is its dependence on middle class as its primary business prospect. The firm is forgetting about the virtues of targeting business travelers. A higher retention rate of business clients could help the company create value over time.Ratio analysis is a financial diagnostic tool that push aside help an business analyst determine the financial performance of a particular common stock or privately owned business. In pecuniary year 2007 the debt to equity ration of Allegiant was 0.93. The metric is good because the company has more total equity than total debt. In comparison with the industry specimen of 1.48, the company has a more flexible capital structure that can be utilized in the future to acquire capital and spur foster growth (Dun & Bradstreet). The firms quick ratio (current assets / current obligations) is even better at 1.75. A low current ratio decreases the business risk for an investor because it provides assurances that the company can meet its current obligations. The company most likel y issue corporate paper at such as