Ryanair Capital Structure
Essay by 123.ie • April 5, 2017 • Essay • 1,242 Words (5 Pages) • 2,008 Views
Capital Structure
Ratio | Formula | 2016 € Millions | 2015 € Millions |
Debt ratio | Total Liabilities Total Assets | 4252.0 = 37.9% 11,218.3 | 4804.3 = 39.4% 12,185.4 |
Debt/Equity | Total Liabilities Total Equity | 7621.5 = 2.12 3,596.8 | 8150.3 = 2.02% 4,035.1 |
Interest Cover | Profit before Interest and Tax Interest Payable | 1721.9 = 4.47 384.9 times | 982.4 = 2.34 419.7 times |
Stock Market Measures
Ratio | Formula | 2016 € Millions | 2015 € Millions |
Earnings per Share (EPS) | Net Profit Number of Ordinary shares issued | 1559.1 = 116.26 1341.0 cent | 866.7 = 62.59 1384.7 cent |
Price Earnings ratio | Market Price of share Earnings per share | 83.79 = 0.72 116.26 years | 63.43 = 1.01 62.59 years |
Dividend per share | Earnings per share Dividend per share | 116.26 = 3.95 29.4 cent | 62.59 = 1.67 37.5 cent |
Dividend Yield | Dividend per share x100 Market Price per ordinary share | 29.4 x100 = 35.09% 83.79 | 37.5 x100 = 59.12% 63.43 |
Capital Structure
Debt Ratio
A lower debt ratio indicates a stable business with the potential for a long life, this is implied where a lower ratio also means a lower overall debt. There is a realistic benchmark of 0.5 which most companies try to live up to. It is seen that if a company has a 0.5 debt ratio they have twice as many assets compared to liabilities and Ryanair are exceeding the 0.5 benchmark with their 0.68 in 2016. Unfortunately for Ryanair their debt ratio decreased from 0.69 in 2015 to 0.68 in 2016. Ryanair are viewed as a highly geared company, which insinuates they have to sell off their assets to accompany for the liabilities.
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