Airlines financial report
Financial reports are documentations that provide insight into the financial standings of a company. The information contained in these reports is utilized both internally and externally for a variety of purposes.
Internal company members utilize financial reports to gauge operations performance for the current fiscal year. External members utilize financial reports to gauge whether or not investing in a company is a sound financial decision. Current external investors utilize the reports to determine the amount of return on investment will be received at fiscal year end.
Financial report disclosures come in two formats. The first is standard financial statements of balance sheet, income statement, statement of cash flows and stockholders equity statements. The second format is non financial disclosure in the format of a letter from the president or chairman of the board, a press release or environmental and social actions taken by a company.
Airlines financial reports are released on a quarterly and annual basis. This is primarily due to the fact that the airline industry is a common public entity that is regulated by the government. Government monitored agencies are required to disclose financial information more frequently than the standard once a year reporting requirement of other industries.
The balance sheet presentation on the quarterly report details financial standings at the end of each quarter period. Assets are listed along with stockholder equities and the two numbers must match one another for the airline to have a solid financial standing at the end of each quarter.
The income statement reflects airline financial earnings from passenger flight revenue, freight flight revenue and other sources. The other sources may or may not be disclosed. That is left up to the discretion of the individual airline. Operating expenses for airline financial reports include things such as fuel, aircraft rental, maintenance, landing fees and depreciation.
The cash flow statements reflect income from operations, investments and financing activities. Operations income includes air traffic liability and aircraft operations. Investment income for airlines comes from any smaller airline a larger airline may conduct business with. For example, Southwest airlines receive investment income from ATA airlines. The smaller airline, ATA, runs a taxi service for the larger company and pays a portion of each ticket income to Southwest airlines. Financing activities for airlines include amortization of the cost of airplanes utilized in operational fleets.
Other airline financial reports include the annual report made to stockholders. Financial disclosures are made detailing various financial analysts who follow the airline course of business. As the SEC makes changes to airline standards or inquires into an individual airline operations, a disclosure is made to answer that inquiry.
The final piece of airline financial reports is the section detailing any possible accounting practices that do not meet generally accepted accounting principle standards.
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