Financial Analysis for BA
Revenue Analysis
Total and Operating Revenue: BA experienced fluctuations in its operating revenue over the analyzed periods. The revenue increased from $17.92 billion in 2023-03 to $19.75 billion in 2023-06, reached $22.02 billion by 2023-12, and then saw a minor decrease to $16.57 billion by 2024-03. These variations indicate market volatility or changes in BA’s business operations that impacted sales performance.
Gross Profit Margins: Gross profit followed a similar trend as revenue, peaking at $2.70 billion in 2023-12 before reducing to $1.88 billion by 2024-03. The gross profit margins notably varied, reflecting the company’s differing ability to manage costs of goods sold effectively.
Cost Management
Cost of Revenue: The cost of revenue was notably high, consistently making up a large proportion of the total revenue. The cost of revenue peaked at $19.32 billion in 2023-12 before decreasing to $14.69 billion by 2024-03.
Operating Expense: Operating expenses were consistent, with a slight increase observed over the periods. For instance, from $2.05 billion in 2023-03 to $2.03 billion in 2024-03.
Total Expenses: Total expenses largely aligned with trends in operating revenue and cost of revenue, peaking at $21.74 billion in 2023-12 and then decreasing to $16.72 billion by 2024-03.
Profitability Analysis
EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) showed recovery from negative figures in 2023-09 to a positive $1.07 billion by 2023-12 but decreased to $633 million by 2024-03. These trends suggest volatile operational efficiency.
Operating Income: Operating income varied significantly, from a low of -$836 million in 2023-09 to a positive $281 million in 2023-12, reflecting improvements in operational management or changes in cost structures.
Pretax Income: Pretax income also reflected heavy losses, particularly with -$1.10 billion in 2023-09, carrying a slight recovery trend in subsequent quarters.
Net Income: Net income figures were consistently negative, indicating ongoing challenges in achieving profitability. From -$1.64 billion in 2023-09, there was a slight improvement to -$343 million by 2024-03.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation expenses were consistently above $440 million, illustrating significant charges related to the depreciation of assets.
Interest Expense: Interest expenses remained high, reflecting substantial debt levels, with figures around $600 million across the periods.
Taxation
Tax Rate: The tax rate varied across the periods, ranging from 0.143 to 0.21, which likely reflects different tax benefits or obligations incurred during each fiscal period.
Tax Provision: The tax provision reflected benefits in certain periods, such as a -$251 million charge in 2023-06, possibly due to deferred tax assets or credits.
Tax Effect of Unusual Items: There were notable tax effects related to unusual items, like a $9.45 million in 2023-06, suggestive of specific one-time events affecting the tax calculations.
Shareholder Metrics
Diluted and Basic EPS: Both diluted and basic Earnings Per Share (EPS) mirrored the financial difficulties, displaying negative values throughout most periods, hitting as low as -$2.7 in 2023-09.
Average Shares: The number of shares remained relatively steady around 610 million, providing a stable base for EPS calculations.
Net Income Available to Common Stockholders: The net income available to common stockholders was consistently negative, aligning with the overall net income trends.
Conclusion
The analysis of BA’s financial data over the past three fiscal years reveals substantial challenges in profitability, cost management, and cash flow. Despite gross revenue increases in some quarters, net losses and operational inefficiencies depict a company grappling with internal and possibly external pressures. BA may need to focus on strategic cost reduction, enhancing operational efficiency, and possibly restructuring financing strategies to manage its debt load more effectively.