Annual Report Delta Airlines, Inc. Caitlin Donato ACG2021 003 *ALL FIGURES IN MILLIONS - PowerPoint PPT Presentation

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Annual Report Delta Airlines, Inc. Caitlin Donato ACG2021 003 *ALL FIGURES IN MILLIONS

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Annual Report Delta Airlines, Inc. Caitlin Donato ACG2021 003 *ALL FIGURES IN MILLIONS Executive Summary Delta is in a rebuilding stage after filing chapter 11 ... – PowerPoint PPT presentation

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Title: Annual Report Delta Airlines, Inc. Caitlin Donato ACG2021 003 *ALL FIGURES IN MILLIONS


1
Annual ReportDelta Airlines, Inc.Caitlin
DonatoACG2021 003ALL FIGURES IN MILLIONS
2
Executive Summary
  • Delta is in a rebuilding stage after filing
    chapter 11 bankruptcy. Corporate has pulled money
    from salaries, pensions, and retirement benefits
    in the past two years in hopes to repay debts.
    The company still has an overall loss for the
    year.
  • www.delta.com

3
Part A. Introduction
  • CEO Gerald Grinstein
  • Home Office Atlanta Georgia
  • Ending date of last fiscal year
  • December 31st, 2004
  • Delta provides air travel around the world
  • Delta flies world wide to 244 Domestic cities, in
    40 different countries

4
Part A. Audit Report
  • Independent auditors Ernst Young LLP
  • A report on the consolidated financial statement
    for 2005 by Ernst Young LLP has not yet been
    released.
  • In their review for 2003 and 2004 the report did
    not include an adverse opinion. It did comment on
    the fact that Delta is still a growing concern.
    It also mentioned a change in methods in
    accounting for goodwill and other intangible
    assets.

5
Part A. Stock Market Information
  • Delta stock 1.30
  • Twelve month trading range of the companys stock
  • Dividend per share N/A
  • Date of above
  • October 9th, 2006
  • Buy Delta stock, price is low and has been
    increasing over the past two years.

6
Part B. Industry Situation and Company Plans
  • In my opinion Delta had to hit bottom in order to
    rebuild. I feel that they will become a
    successful company again in the years to come.
    The companys ratios have improved over the last
    two years, and there is no reason to think that
    improvement will not continue. The company is
    using their assets more wisely which will help
    them to bounce back from bankruptcy. Also
    receivables are becoming liquid.
  • Delta's Corporate info
  • www.shareholder.com

7
Part C. Income Statement
2005 2004
Gross Profit 6033 682
Loss From operations (2001) (3308)
Net Loss (3818) (5198)
  • The format of Deltas Income statement resembles
    like a multi-step Income statement.
  • Deltas expenses are decreasing which in turn is
    increasing their gross profit.

8
Part C. Balance Sheet
Year Assets Liabilities Stockholders Equity
2004 21801   16005 5796
2005 20039   10144 9895
  • From 2004 to 2005 Deltas long term debt
    increased. The accounts that changed the most was
    the postretirement, Pension and other related
    benefits. They dropped off completely.

9
Part C. Statement of Cash Flows
  • Cash flows from operations are more than net loss
    for the past two years. Net loss for 2004 was
    5,198, net loss for operations was 1,008. Net
    loss for 2005 was 3,818, cash flow for operations
    was 175.  
  • The company has suffered from its investing
    activities.
  • The primary source of financing was proceeds from
    DIP.
  • Overall, cash has increased over the past two
    years.

10
Part D. Accounting Policies
  • Delta prepares financial statements in conformity
    with GAAP
  • Topics of the Notes to the Consolidated
    financial statements
  • Revenue and Network Productivity Improvements
  • In-Court Restructuring.
  • Competitive Employment Costs
  • Notices to Creditors Effect of Automatic Stay.
  • Appointment of Creditors Committee.
  • Rejection of Executor Contracts.
  • Request for Adequate Protection.
  • Rejection of Collective Bargaining Agreements.
  • Payment of Insurance Benefits to Retired
    Employees
  • Magnitude of Potential Claims.

11
Part E. Financial AnalysisLiquidity Ratios
  • Working Capital for 2005 is (785),and for 2004 is
    (2335), this means that Deltas liabilities are
    not going to be paid from their assets.
  • Current Ratio for 2005 is .85, and for 2004 is
    .60 this means that Delta has .85 and .60
    respectively of current assets for each 1.00 of
    liability.
  • Receivable turnover for 2005 is (4.6), and for
    2004 is (7.6) which means that receivables were
    not turned into cash.
  • Average days sales uncollected for 2005 is
    (79.3), and for 2004 is (48) which means that the
    average turnover is every (79.3), and (48) days.
  • Inventory turnover is N/A because Delta provides
    a service not inventory.
  • Average days inventory on hand is N/A for the
    same reason.

12
Part E. Financial AnalysisProfitability Ratios
  • Profit margin for 2005 is (42) and is (29) for
    2004. This means that there was negative percents
    of sales dollars resulting in net income.
  • Asset turnover for 2005 was (.85) times, and for
    2004 was (1.44) times. This means that assets
    were not used effectively to produce sales.
  • Return on assets was 3.6 for 2005, and 4.2 for
    2004. This means that for every dollar invested,
    Deltas assets generated 3.6 cents of net income.
  • Return on equity for 2005 was (1.6) and (2.6) for
    2004. This means that stockholders were losing
    money for every dollar of stock.

13
Part E. Financial AnalysisSolvency Ratio
  • Debt to equity for 2005 was (53) and for 2004
    was (46). this means that Delta receives its
    financing from creditors.

14
Part E. Financial AnalysisMarket Strength Ratios
  • For the past two years, calculate and comment on
  • Price/earnings per share for 2005 is (.04) and
    for 2004 it was (.20). This is a measure of
    investors confidence in Delta.
  • Delta does not currently pay out dividends.
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