How Profitability ratios measure DFW’s performance by increasing revenues and controlling cost

Questions:

1. When did DFW Fiscal Year 2019 end?

2. How did the ground and facility lease revenues change in FY 2019 in comparison to FY 2018? And explain the reasons. (Using information from management’s discussion and analysis)

3. What is included in the contract services cost? How did the contract services cost change in FY2019 in comparison to FY2018? And explain the reasons. (Using information from management’s discussion and analysis)

4. Please find the following numbers from the report.

1. 1. DFW’s total current asset in the end of FY2019:______ DFW‘s total current liability in the end of FY2019:______ DFW’s total cash and cash equivalents in the end of FY2019 (both unrestricted and restricted) ____
   2. DFW’s long-term debt in the end of FY2019:_____ DFW’s total net position in the end of FY 2019_____
   3. DFW’s depreciation and amortization cost in FY2019_____ DFW’s EBITDA in FY 2019_____ DFW’s EBIT in FY 2019_______
   4. DFW’s net income in FY2019 ______(NOTE. the net income before capital distributions is regarded as the net income here)
   5. The amount of money DFW used in construction in FY 2019_______ (Information can be found in Notes to the Basic Financial statements (5))

5. Use at least two profitability ratios to measure DFW’s performance in increasing revenues and controlling cost. Compare the results with LAX’s performance in FY 2019 (which can be found in week 5 lecture slides)

6. Use at least one ratio to measure DFW’s solvency and compare it with LAX’s performance in FY 2019 (which can be found in week 5 lecture slides).

7. Use at least two ratios to measure DFW’s liquidity and compare them with LAX’s performance in FY 2019 (which can be found in week 5 lecture slides).

8. Suppose DFW plans to invest in one of the following two projects (Project A and Project B). The cost of capital is 8%.

1. Calculate the NPV of Project A and Project B.
2. Calculate the IRR of Project A and Project B.
3. What is your suggestion about which project DFW should invest in? Explain the reasons.

9. DFW plans to use the self-benchmarking method to evaluate its financial performance in terms of the ability to fulfill its short-term and long-term financial obligations (solvency and liquidity). Please

1) pick a combination of Core KPI and Key KPI from the ACRP Report 19A: Resource guide to airport performance indicator for this benchmarking evaluation (at least two Core KPIs and 1 Key KPI).

2) Explain how to calculate each KPI you select.