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Air Canada

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Justin Abante

on 29 May 2015

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Transcript of Air Canada

Company Background
- Air Canada was founded in 1938
- Air Canada provides scheduled and air transport for passengers and cargo to 178 destinations world wide
- Air Canada is also the largest airline in Canada
- Air Canada is also a founding member of the Star Alliance

Air Canada's CEO Air Canada's Chairman
Calin Rovinescu David I. Richardson
Balance Sheet
(2014) (2013) Amount Percentage
Other Long Term Liabilities
313 375 -62 16.5%
Income Statement
Air Canada
(2014) (2013) Amount Percentage
Property & Equipment
5998 5073 925 18.2%
The property & Equipment account increased by 925 or 18.2%. The main reasons for this is that the company has added new additions of aircrafts and spare engines. Air Canada also has a total of 28 aircrafts and 5 spare engines giving it a value of 5998 in millions.
The Other Long Term Liabilities account has went town by $62 or by 16.5%. The mean reason for this is because the proceeds contractual commitments has went down significantly. Contractual commitments represent non-refundable proceeds received , net of related costs and deposits.
(2014) (2013) Amount Percentage
11,804 11,021 $783 7.1%
The Passenger revenue account has went up by $783 or 7.1%. The reason for this is that there has been an increase of passenger's from 2013-2014.
(2014) (2013) Amount Percentage
502 474 $28 5.9%
The cargo revenue account has went up
by $28 or 5.9%. The reason for this is that
more cargo has been flown accross the
world from 2013-2014.
Balance Sheet
2013 2014
Amount Percentage Amount Percentage
Share Capital
$827 8.7% $835 7.8%
The account of share capital has went down by a percentage of 0.9 but has went up by $7. The reason the percentage went down is that the company had less total assets in 2013 compared to 2014.
2013 2014
Amount Percentage Amount Percentage
Aircraft Fuel Inventory
$712 0.75% $72 0.67%
Air craft fuel inventory has gone up slightly. It has increased by 0.08%. The reason for this is that there has been more flights in 2014 then there has been in 2013. The reason for it not going significantly high is that fuel prices in Canada have dropped in 2014.
Income Statement
2013 2014
Amount Percentage Amount Percentage
Aircraft Maintenance
$632 5.1% $728 5.5%
2013 2014
Amount Percentage Amount Percentage
Food.Beverages & Supplies
$289 2.3% $309 2.3%
The aircraft maintenance account has went up by 0.4%. The reason for this is that there has been a slight increase in flights from 2013-2014 this means that more money must be put in from maintenace of the airplanes.
The food beverages & supplies account did not change in percents as they both remained with 2.3%. However the amounts have changed with the account increase by $20. The reason the percentage did not change is that even though the company spent more money they also made more money based on revenues in 2014.
Current ratio is the measure of a company's liquidity and short-term debt-paying ability
Current Assets
Current Liabilities
2014 2013
3478 3288
3537 3190
= 0.98 = 1.03:1
The companies current ratio has went down from 2013 to 2014. This can be explained because the companies liabilities have increased more significantly than the companies assets.
Receivables turnover is used to measure the number of times on average that receivables are collected during the period.
Net Credit Sales
Average gross accounts receivable
2014 2013
13,272 12,382
658 669
= 20.1 = 18.5
Air Canada's receivable turnover has went up to 20.1 times a year. This is due to Net Credit sales going up.
Profit margin is used to measure the percentage of each dollar sales that results in profit.
Net Sales
2014 2013
105 10
11,804 11,021
= 0.89% = 0.09%

Profit margins for Air Canada have went up due to Profits and Net Sales going up
- Based on my research of Air Canada I would not recommend it to investors.
- Air Canada has a history with bankruptcy
- Air Canada's profit margins are really low with a profit margin of 0.89% even though it has increased from 2013 to 2014.
- Air Canada also has more competitors then before when they first started.
Company History
- Air Canada by federal legislation as a subsidiary of the Canadian National Railway and was under government control
- Air Canada was not called Air Canada until 1964 as it was called Trans-Canada Airlines before the name change
- In 2001 Air Canada acquired Canada's second largest air carrier, Canadian Airlines and became twelfth largest airline in the world
- In 2003 Air Canada filed for protection under the Companies' Creditors Arrangement Act
- Deutsche bank unveiled an $850 million financing package for Air Canada if they could cut $200 million in annual cost cutting in addition to the $1.1 billion that the unions agreed on in 2003.
Full transcript