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RETURN ON EQUITY

- ROE measures the return earned on the shareholder’sinvestment in the frm. The higher this return, the better othe o!ners are.

- "al#ulated b$ %net &rofts a'ter ta(es)*%ordinar$ shareholder’se+uit$).

- . in /000, 1.2 in /003, 1.4 in /00, -5. in /0/and 0. in /03.

- Ratios suggest in this &eriod o' time there has been in#reasing#om&etition !ith Qantas 6ights !ith the emergen#e o' ne!#om&anies. This has led to a de#line in &roftabilit$.

- 7ue to in#reasing #om&etition Qantas res&oneded !ith ma8orair#ra't a#+uisitions resulting in net o&erating assets 'rom951:.3m in /000 to 925m in /03.

- Re6e#ted in the de#line in RNO; %return on net o&eratingassets) 'rom /.3 in /000 to . in /03 due to theQantas’ in#rease into their assets.

- ;lso seen in the in#rease in leverage as seen in the debt toe+uit$ ratio in#reasing 'rom 13.3 in /000 to 04./ in /03.

;R?IN- @et!een /000-3, total revenue has in#reased 'rom 91/5m

to 9240/ and has an average annual in#rease o' 5.-

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- >ost signif#ant e(&ense is sta !ith 93/2m in /03,e+uivalent to /5.5 o' revenue.

- In#reases in sta e(&enses o' 3.&a &er em&lo$ee.- =uel e(&ense is ae#ted b$ the &ri#e o' 8et 'uel !hi#h is

in6uen#ed b$ the !orld oil &ri#es. Gistoria#all$ re&resented

around 4 o' revenues rea#hing /. in /003.;BBET TURNOAER- measured b$ revenues*net o&erating assets- in#reased 'rom .3 to /.0 in /00, .4 in /00, ./ in

/03. "urrentl$ lo! relative to its &revious levels.- "urrent o&erating assets and #urrent o&erating liabilities are

both in#reasing relative to sales, although the$ oset oneanother.

- Net non-#urrent assets are de#om&osed into &ro&ert$, &lantand e+ui&ment % HIQUI7ITY- /000-3 Qantas generated signif#ant #ash 6o!s. =or Qantas

in /03 unearned revenues o' 9303/m !ere in#luded in#urrent o&erating liabilities re&resenting 5:.1 o' su#hliabilities.

7E@T BERAI"IN?

- leverage %debt*e+uit$) o' 0.25 to 0.44- interest #overage %earnings) o' :.02 to /./2- interest #overage %#ash 6o!) o' :.5 to /.43- a debt to #ash 6o! 'rom o&erations ratio o' .1/ to 5.1 $ears.- Qantas has in#reased its use o' debt, des&ite this it is

#om'ortabl$ servi#ing its debt and is unliDel$ to e(&erien#efnan#ial distress.

RETURNB TO EQUITY GOH7ERB- Qantas dividend &a$ments !ere limited.

- Normal dividend &a$outs !ere stead$ ranging 'rom 50.4 to34 o' NO

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- =all in &roftablilit$ in /004 and sin#e /00 in re#ognition o'the marginal &roftabilit$ o' the airline Qantas has not &aid adividend.