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Cost Analysis - Essay Example
Author : damaris16
Pages 3 (753 words)
Company Analysis Cost Analysis Table of Contents Table of Contents 2 1.How much do US Airways profits fluctuate due to fuel volatility? 3 2. Why is fuel volatility bad for profits? Do a cost analysis alone, and then do a full profit maximizing analysis. 3 3.What is Express Operation’s operating cost per ASM?…
6 Works cited 8 1. How much do US Airways profits fluctuate due to fuel volatility? The quarterly report of 2013 of US Airways shows that, as compared to 2012, the net income earned by the company in the second quarter of 2013 has decreased, which has further lowered the Earnings per Share (EPS) available to the shareholders. The reason for this decrease in profits can be apportioned to the volatility in prices of fuel. As mentioned in the quarterly report of 2013, on a daily basis the prices of Brent crude oil had fluctuated between $110 per barrel to $97 per barrel in the month of April, and in the quarter end the price was found to be $102 per barrel. Although the U.S. airline Industry is facing moderate fuel prices in the second quarter of 2013, but in the 1st quarter of 2012, the industry faced higher volatility and uncertainty which have affected the business. The uncertainty in the prices of fuel has caused disruptions in the supply of aircraft fuel and has adversely affected the operating results and liquidity of the company. 2. Why is fuel volatility bad for profits? Do a cost analysis alone, and then do a full profit maximizing analysis. Volatility in the prices of fuel has serious affects on profits of the company. The volatility results in ups and downs in dividends and share prices which adverse affects global growth. ...