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Comment on qantas airways profitability

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Reference no: EM133184527

Question - The following table reports various financial ratios for Qantas Airways and Virgin Australia for 2018.

 

Qantas Airways

Virgin Australia

Return on Equity (ROE)

26.14%

-48.96%

Return on Assets (ROA)

5.44%

1.74%

Profit Margin

5.74%

-12.56%

Current ratio

0.49

0.78

Debt ratio

54.53%

70.11%

Required -

(a) Based on the ratios provided above, comment on Qantas Airways' profitability by comparing to Virgin Australia.

(b) Explain why Virgin Australia's ROA is positive, while its ROE is negative?

Reference no: EM133184527

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