Airline Finance: Funding Sources and Financial Statements
Airline Finance
Sources of Funds
Internal Sources:
- Net Earnings
- Depreciation
- Deferred Taxes
External Sources:
- Debt Financing
- Equity Financing
- Leasing
- Vendor Financing
- Venture Capital
Net Earnings
The best and most desired source of funds is net earnings.
- Net earnings = Gross revenues – (taxes + interest + depreciation + other expenses)
If it is a publicly traded company with floating stocks in the capital market, then the company’s board of directors decides how much of the earnings should go to owners (stockholders)
Read MoreEconomic Principles: GDP, Growth, Fiscal Policy, and Trade
Chapter 8: GDP
GDP (Gross Domestic Product) is the dollar amount of all final goods and services produced within a country’s borders in a year. It is a monetary measure and avoids multiple counting by only including final goods (excluding intermediate goods).
Formula: GDP = C + Ig + G + Xn
- C (Personal Consumer Expenditure): Spending by households on goods and services.
- Ig (Gross Private Domestic Investment): Net private domestic investment plus depreciation.
- G (Government Purchases): Government spending
Estimating and Costing: Methods, Formats, and Examples
Estimating and Costing Definitions
- Estimating: It is the process of calculating the approximate quantity of materials, labor, and cost required for a project before starting the work.
- Costing: It is the process of calculating the total expenditure of a project based on the estimated quantities, including material cost, labor cost, and other expenses.
Modes of Measurement in Construction
Item | Mode of Measurement |
a) Brickwork | Measured in cubic meters (m³) for walls and structures. |
b) Skirting | Measured |
State Intervention in the Economy: Types and Impacts
The State’s Role in the Economy
The state intervenes to correct injustices, inefficiencies, and imbalances to increase social welfare.
Reviews of the Economic Role of the State
- Neoliberals: Advocate for a reduction in the public sector, arguing that state intervention has negative effects on the economy.
- Keynesians: Support public intervention in the economy.
Objectives of Public Intervention
- Efficiency: Maximum use of resources.
- Distributional Equity:
- Horizontal: Equal opportunities and treatment of persons.
Understanding IS-LM Model & Key Economic Concepts
Key Economic Concepts
Income: All the profits that are added to the total budget of an entity, public or private. Income encompasses the monetary and non-monetary elements that accumulate and consequently generate a consumption-profit cycle.
Interest Rate: The price that must be paid to obtain money once a loan is approved. It is expressed as a percentage; the more money requested, the higher the interest.
Nominal Interest Rate: The interest rate before taking inflation into account.
Real Interest Rate:
Read MoreEconomic Activities, Concepts, and Agents
Types of Economic Activities
In any human community, there is a division of labor, which benefits all its members. There are three types of economic activity: primary, secondary, and tertiary.
According to the hypothesis of the three sectors, the more advanced or developed an economy is, the greater the importance of the service sector and the smaller the importance of the primary sector. Economic activity is different from the economic act.
Primary Economic Activities
These activities are dedicated
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