Year Return On Capital Employed Net profit before interest and tax Fixed assets turnover ratio Gearing

Ratio Interest cover Price Earnings Ratio Dividend Yield

2009 10.29%

AirAsia Bhd 2010 16.45%

2011

2009 59.81%

Tiger Airways 2010 2011 7.37% 10.09%

31.83%

47.49%

-12.52%

4.27%

0.39 times

0.42 times

3.03 times

1.52 times

72.95% 2.66 times 0.059 times 0

68.05% 2.42 times 0.046 times

-38.36% -139.23 times

46.85% 26.54 times 0.26 times

68.14%

0.18 times

11.96%

0

0

0

ROCE has increased by 6.16%, from 10.29% to 16.45%. Separating this ratio into its component parts, we can see that there has been improvement in the profit before interest and tax ratio, from 31.83% to 47.49%. The fixed assets turnover ratio also increased from 0.39 times to 0.42 times. This means that AirAsia made more effective use of its assets in 2010 than in 2009. The gearing ratio has declined from 72.95% to 68.05%. This indicates AirAsia use less borrowed funds in 2010 than in 2009 to finance its activities. (Page 36). The interest cover also decreased from 2.66 times from 2.42 times. This shows AirAsia more likely the chance that interest payments will not be met; hence it might associate with higher level of financial risk. 0.55 2010 0.71 2009

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