Responsibilities and Functions of DGCA DGCA is Statutory authority responsible for laying down standards and their implementation: Airworthiness of Aircraft; Safety and Operation of Aircraft; Flight Crew Standards & Training; Air Transport Operations. Licensing of Flight Crew, Aircraft Engineers and Civil Aerodromes. Certification of Aircraft Operators. Investigation into incidents and minor accidents and implementation of safety measures. Regulation and control of air transport operations. Formulation of aviation legislation. Undertake Research and Development activities in the field of Civil Aviation. Handling of matters relating to ICAO.
Functions of AAI: To manage the airports, the civil enclaves and the aeronautical communication stations efficiently. To provide air traffic service and air transport service at any airport and civil enclaves. Plan, develop, construct and maintain runways, taxiways, aprons and terminals and ancillary buildings at the airports and civil enclaves; Establish airports, or assist in the establishment of private airports by rendering such technical, financial or other assistance which the Central Government may consider necessary for such purpose
Plan, procure, install and maintain navigational aids, communication equipment at the airports and at such locations as may be considered necessary for safe navigation and operation of aircrafts. Provide air safety services and search and rescue, facilities in co-ordination with other agencies Establish schools or training centers for its officers and employees in regard to any matter connected with the purposes of this Act Construct residential buildings for its employees and warehouses and cargo complexes for storage. Make appropriate arrangements for watch and ward at the airports and civil enclaves
Functions of AERA
The Authority shall perform the following functions in respect of major airports , namely:—
to determine the tariff for the aeronautical services taking into consideration—
the capital expenditure incurred and timely investment in improvement of airport facilities;
the service provided, its quality and other relevant factors;
the cost for improving efficiency;
economic and viable operation of major airports;
revenue received from services other than the aeronautical services;
Key Factors Influencing the Performance of Airports: The Performance of the airport depends on following factors: Weather Traffic Volume Airline Schedule Efficiency of baggage handling operations Efficiency of airport operations No. of runways ATM
Indicators commonly used to access economic performance: Cost Efficiency Labor productivity Capital Productivity Revenue Generation Profitability
Financial Modeling The basic idea is to identify and examine as many possible scenarios and outcomes as possible, as they relate to a particular course of action. Accurately identifies all possible outcomes associated with the future performance of a given investment. Consider not only the currently known factors, but also possible future movements in the marketplace. Involves the creation of mathematical projections.
Financial Ratios Financial Ratios are the tools used for quantitative analysis of the company’s financial statements. Leverage Ratios Liquidity Ratios Efficiency Ratios or Turnover Ratios Profitability Ratios
Shows the proportions of debt and equity in financing the firm’s assets.
Long Term Debt Ratio
Debt Equity Ratio
Total Debt Ratio
Interest Coverage Ratio
DebtRatio: Shows the extent to which debt financing has been used in the business. Debt ratio=total debt/ total debt + net worth Debt equity ratio=total debt/ net worth Total debt ratio= total liabilities/ total assets Interest Coverage Ratio =EBITA/ Interest
Measures the firms ability to meet current obligations. Net Working Capital to Total Assets Ratio Current Ratio Cash Ratio
Net Working Capital Ratio
The difference between the current assets and current liabilities is known as net working capital/net current assets. It roughly measures the firm’s potential reservoir of funds.
Net Working Capital Ratio= Net working capital/ Total Assets
It is the ratio of Current Assets to Current Liabilities. Current Ratio=Current assets/ current liabilities
A company’s most liquid assets are its holdings of cash and marketable securities. It is the ratio of Cash and marketable securities to current liabilities. Cash Ratio=cash + marketable securities / current liabilities
Efficiency Ratios It judges on how efficiently the firm is using its assets. The most important type of ratio is the Asset Turnover Ratio.
Asset Turnover Ratio:
The asset turnover or sales-to-assets ratio shows how hard the firm’s assets are being put to use. Asset Turnover Ratio=sales/net assets or capital employed
Profitability Ratios Profitability Ratios focus on the firm’s earnings. Measures overall performance and effectiveness of the firm.
Net Profit Margin
Return on Assets
Return on Equity
Net Profit Margin:
If you want to know the proportion of revenue that finds its way into profits, you look at the profit margin. Net Profit Margin = Profit after tax/sales
Return on Assets:
It is better to use net income plus interest because we are measuring the return on all the firm’s assets, not just the equity investment. Thus, Return on Assets= (Net Income + Interest) / Average Total assets
Return on Equity:
Another measure of profitability focuses on the return on the shareholders’ equity. Return on Equity =Profit after tax/net worth
Financial Valuation In general terms, there are many approaches to valuation. One of them is the Discounted Cash flow Valuation (DCF), it relates the value of an asset to the present value of expected future cash flows on that asset. There are two basic DCF models that compare the PV of future project cash inflows and outflows to an initial investment, NPV & IIR.
Net Present Value(NPV):
NPV of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment and the amount which is initially invested.
Internal Rate of Return (or IRR):
It is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.