Finance Case Study on QANTAS

Resource Description

A table of finance content relating to the case study QANTAS

Abstract from the document

influences on financial management 

• Internal sources of finance

Qantas uses retained profits as a source of internal finance as they invest back onto the (Qantas) business. As of recently high profitability, Qantas has been able to retain more profit recently.

• External sources of finance

Qantas intends to buy more Boeing or Airbus planes by the end of 2020 to renew its domestic fleet which is estimated to cost more than $5 billion. Qantas has already started to replace older planes with new Dreamliner’s in 2020 and has 99 Airbus A321 aircrafts order for Jetstar.

Qantas can find funds for this in external sources of finance such as Debt both long and short and Equity finance

Debt Finance: Qantas uses mostly debt both long and short term and in 2019 had a debt portfolio totalled $4.7 billion. Qantas has recently taken advantage of the low-interest rates and a higher credit rating saving it millions of dollars in interest payments.

Equity Finance: Qantas uses equity finance through the selling of shares on the ASX. Qantas’ last equity raising was in 2009 when it raised $500 million in an issue of new shares to combat the effects of the global financial crisis. Pays off its dividends with its high profitability.

• Financial institutions

Qantas taps into financial institutions/intermediaries to invest their surplus funds and obtain finance particularly from banks and investment