Running head: FINANCIAL ACCOUNTING
Evaluating the financial health of a company, its market value, capital structure, and
dividend policy are vital for any investor since it helps in understanding the overall health of the
company, the industry, and the overall market in the economy. In this assignment, we evaluate
the financial statement of AirAsia Berhad, a Malaysian low-cost airline company.
AirAsia is the largest airline company in Malaysia by destinations and its fleet size. The
airline operates scheduled domestic and international flights to more than 165 destinations and
covers about 25 countries. The airline works with the world's lowest unit cost and has been
consistently named the world’s best low-cost carrier for eleven years, including 2019.
The airline was founded in 1993 but started its operations in 1996. Initially governmentowned, the company was later bought by Tune Air Sdn Bhd in 2001 due to heavy losses and
debts. Over the years, the company has made tremendous growth. Apart from the parent hub in
Kuala Lumpur International Airport, the company has since added four secondary centers.
Currently, the company has eight affiliate airlines. The affiliates include AirAsia China, AirAsia
Vietnam, AirAsia India, AirAsia Japan, AirAsia X, Indonesia AirAsia & Indonesia AirAsia X,
Philippines AirAsia, Thai AirAsia & Thai AirAsia X.
Although the airline has been on steady growth over the years, the recent Coronavirus
pandemic has had a significant impact on the airline. The airline has announced it will suspend
its operations due to the growing border restrictions imposed by countries amid the Coronavirus
pandemic. The airline has therefore projected a two-month total shutdown on international
flights, a move that will significantly affect the company's profit margin. To be able to sustain its
domestic operations, the airline has directed the senior management to take pay cuts, with some
workers losing their job temporarily until the coronavirus pandemic is contained in most of its
Evaluating AirAsia Berhad’s financial wealth
AirAsia Berhad financial statement as of June 2018 and 2019
Long term debt
Short term debt
Number of shares
MV of Equity
Deposits, cash, and bank