Turkish

Airlines 2015 2016 GRAPH RATE

Liquidity Ratios
Current Ratio 0,81 0,80 -0,01
Quick Ratio 0,757 0,753 -0,004
Cash Ratio 0,25 0,40 0,16

Profitability Ratios
Gross Profit Margin 0,20 0,12 -0,08
Operating Profit Margin 0,09 0,03 -0,06
Net Income Margin 0,08 0,03 -0,06
Return on Equity 0,18 0,05 -0,14
Return on Assets 0,05 0,01 -0,04

Efficiency Ratio
Total Asset Turnover 0,64 0,53 -0,11
Fixed Asset Turnover 0,79 0,66 -0,14
Inventory Turnover 38,98 39,89 0,91
Days in Inventory 9,36 9,15 -0,21

Some
Account Recv turnover 29,15 25,84 -3,31
Average Collection Period 12,52 14,13 1,60
Accounts Payable Turnover 11,15 12,21 1,06

Informations
Average Payment Period 32,73 29,90 -2,83
Operating Cycle 21,89 23,28 1,39
Cash Conversion Cycle 42,09 39,05 -3,05

Dept Ratio
Total Debt Ratio 0,70 0,72 0,02
Long Term Dept 0,47 0,48 0,01
Times Interst Earned 4,45 -0,57 -5,02
Liquidity Ratios
Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety as we can see from the ratio analysis test company's power to pay back its liability with its assets is decreased which also the company has lessiquid position which inventory is skipped. But
looking from the positive side the company can repay its short-term debts.So it is a good impression for creditors.

Profitability Ratios
Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to the same ratio
from a previous period indicates that the company is doing well. But looking for that comany we can see the reverse situation.Situation for profitability has become worse,company can be unable to pay for its operating expenses.It could be happen because of a business model
change. Looking on the return of assets gives investors an idea of how effectively the company is converting the money it has to invest into net income.

Efficiency Ratio
An efficiency ratio can calculate the turnover of receivables, the repayment of liabilities, the quantity and usage of equity, and the general use of inventory and machinery. This ratio can also be used to track and analyze the performance of commercial and investment banks.
Looking for this company The firm's sales each dolar earned from assets are not working enough.The firm is using its fixed asset uneffectively and generating its sales worse than previous year.The company's efficiency of managing its inventories increased which is a postitive effect
as companies want to have small levels of inventory level.Company is converting its inventory to sales less quickly comparing to 2015. Also there is a decrease in turnover which causes to the organization is collecting it's payments slower.As the average payment period increased
which has a meaning that the company has spend more time to pay their payments.Even company's liquidity performance is low and its liabilities are increase,company can pay its debts more efficiently.

Dept Ratio
A financial ratio that measures the extent of a company’s or consumer’s leverage which shows us the possibility to borrow cash from organizations. As we can see there is a increase in the total dept ratio which means the higher the degree of leverage and more financial risk.
Company is funding most of its ventures with debt.Company can be at risk of bankruptcy if it becomes unable to finance its debt due to decreased income or cash flow problems.Negative ratio indicates that a business may not be in a position to pay its interest obligations. In 2016,
the ability to service debt is a problem for a borrower.

SUMMARY
The firm’s liquidity has decreased significantly, as indicated by current and quick ratio. Decreasing quick ratios suggest that a company is over-leveraged, struggling to maintain or grow sales, paying bills too quickly or collecting receivables too slowly. However, the cash ratio is a
bit increasing since it relies on inventory in part for liquidity. The current ratio is called “current” because, unlike some other liquidity ratios, it incorporates all current assets and liabilities. Management has done a less-than-average job of generating operating profits on its assets.
Gross Profit margin clearly decreased. For THY this might happen most probably because of decrease in the selling price of goods, without any decrease in the cost of goods sold or increase in the cost of goods sold without any increase in selling price due to high competition.
Strong, growing operating profit is a positive indicator of financial health. Therefore, decreasing operating profit means trouble for a business.
However, this ineffectiveness is countered by efficiencies in keeping operating expenses high. Lower fixed-asset turnover ratio in 2016 indicates that a company has less effectively utilized investment in fixed assets to generate revenue. A lower turnover of THY implies weak sales
and, therefore, excess inventory for the company. It might mean that if in last two years they had the same amount of flights, on 2016 they had more empty seats. A higher average collection period is an indicator of a few possible problems for THY. From a logistic standpoint, it
may mean that their business needs better communication with customers regarding their debts and your expectations of payment. More strict bill collection steps may need to be taken. It takes longer for THY to repay to creditors and suppliers will include the risk to the price of
their goods. Company collecting its cash slower than last year. Which is not good for company and it has to improve immediately.

Ece İrem Namazcı-1501160

Mert Cicigün-1506245
Selin Umay-1508069
Mert Can-1500710