AIRASIAS VISIONTo be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.AIRASIAS MISSION To be the best company to work for whereby employees are treated as part of a big family Create a globally recognized ASEAN brand To attain the lowest cost so that everyone can fly with AirAsia Maintain the highest quality product, embracing technology to reduce cost and enhance service levelsBALANCE SHEET201120132014

(RM000)(RM000)(RM000)

ASSETS

Cash And Short Term Investments2,232,7311,380,4351,337,849

Total Receivables, Net493,777454,878362,672

Total Inventory23,72529,52018,152

Prepaid expenses278,043276,628320,237

Other current assets, total368,921781,724494,468

Total current assets3,397,1972,923,1852,533,378

Property, plant & equipment, net9,786,03011,292,82612,533,535

Goodwill, net7,3347,3347,334

Intangibles, net------

Long term investments283,600394,837422,074

Note receivable - long term1,062,9931,406,7633,434,032

Other long term assets1,191,6561,831,1491,733,765

Total assets15,728,81017,856,09420,664,118

LIABILITIES

Accounts payable65,13471,899100,227

Accrued expenses601,014673,099672,901

Notes payable/short-term debt000

Current portion long-term debt/capital leases1,126,1541,119,4362,274,928

Other current liabilities, total599,330707,8211,064,197

Total current liabilities2,391,6322,572,2554,112,253

Total long term debt7,283,1859,051,41610,453,090

Total debt8,409,33910,170,85212,728,018

Deferred income tax000

Minority interest000

Other liabilities, total1,193,6241,231,4911,543,684

Total liabilities10,868,44112,855,16216,109,027

SHAREHOLDERS EQUITY

Common stock277,991278,106278,297

Additional paid-in capital1,227,9351,229,0681,230,941

Retained earnings (accumulated deficit)3,353,9923,492,9033,037,035

Treasury stock - common000

Unrealized gain (loss)000

Other equity, total4518558,818

Total equity4,860,3695,000,9324,555,091

Total liabilities & shareholders' equity15,728,81017,856,09420,664,118

Total common shares outstanding2,779,9082,781,0642,782,974

Treasury shares - common primary issue000

INCOME STATEMENT201220132014

(RM000)(RM000)(RM000)

REVENUE AND GROSS PROFIT

Total revenue4,946,091 5,111,822 5,415,744

OPERATING EXPENSES

Cost of revenue total(3,206,584)(3,585,826)(3,786,925)

Depreciation/amortization(567,176)(597,258)(719,497)

Unusual expense(income)123,942 181,279 178,029

Other operating expenses, total(269,225)(191,831)(233,760)

Total operating expense(3,919,043)(4,193,636)(4,562,153)

Operating profit1,027,048 918,186 853,591

Finance income79,391 112,320 121,869

Income before interest and taxes1,106,439 1,030,506 975,460

Finance cost(378,808)(428,406)(533,967)

Net operating profit727,631 602,100 441,493

Foreign exchange gain/(losses)116,286 (319,130)(418,792)

Other gain on disposal of interest118,640 78,265 0

Profit/(loss) before tax962,557 361,235 22,701

INCOME TAXES, MINORITY INTEREST AND EXTRA ITEMS

Provision for income taxes(172,949)889 60,135

Net income after taxes789,608 362,124 82,836

Minority interest0 0 0

Net income before extra. Items789,608 362,124 82,836

Total extraordinary items0 0 0

Net income789,608 362,124 82,836

Preferred stock dividend(667,214)(111,292)0

Earnings available for common stockholders122,394 250,832 82,836

Earnings Per Share (EPS - sen)28.4 13.0 3.0

LEVERAGE RATIODEBT RATIODebt ratio measures the proportion of total assets financed by the firms creditors. The higher the ratio, the greater amount of other peoples money being used to generate profit (Gitman & Zutter, 2012)

Analysis: Air Asia debt ratio is very high throughout the 3-years period and increases from year-to-year basis which in general, the company is taken a considerable high risk in order to grow. However, looking into airline industry particularly the air travel, it is not a stable industry. Air travel for business or leisure is one of the first elements to drop in time of economic contraction. Besides, Air Asia has become a diversified company that not only focus its business in airline industry, but also includes telecommunication (Tune Talk Sdn Bhd), insurance (Tune Insurance Malaysia Berhad), and travel agency (AirAsia Go Holiday Sdn Bhd) to name a few. According to Ahn, Denis and Denis (2006), there is a tendency that a diversified company to have higher debt ratio and make larger investment (net cost of capital/sales) than focused counterpart. They also pointed out that diversified company managements decisions on investment were influenced by debt ratio and in order to overcome the constraint of debt ratio, the company distribute liabilities throughout corporate managers.DEBT-TO-EQUITY RATIOAccording to Heikal, Khaddafi and Ummah (2014), debt-to-equity reflects the company's ability to meet all its obligations, which is indicated by what proportion of equity capital used to pay the debt. The greater the ratio, the greater the loan capital that would cause the larger the debt burden (interest cost) that must be borne by the company.

TIMES INTEREST EARNED RATIOThe times interest earned ratio is a ratio that measures the companys ability to meet its interest payments, and thus avoid bankruptcy. It also sheds some light on the companys capacity to take on new debt (Kim & Ayoun, 2005). The higher its value, the better able the firm is to fulfil its interest obligations

EQUITY RATIOThe equity ratio measures the amount of assets that are financed by owners investments by comparing the total equity in the company to the total assets

REFERENCES1. Kim, W. G., & Ayoun, B. (2005). Ratio analysis for the hospitality industry: A cross sector comparison of financial trends in the lodging, restaurant, airline, and amusement sectors. The Journal of Hospitality Financial Management, 13(1), 59-78.2. Heikal, M., Khaddafi, M., & Ummah, A. (2014). Influence Analysis of Return on Assets (ROA), Return on Equity (ROE), Net Profit Margin (NPM), Debt To Equity Ratio (DER), and current ratio (CR), Against Corporate Profit Growth In Automotive In Indonesia Stock Exchange. International Journal of Academic Research in Business and Social Sciences, 4(12), 101-114.3. Gitman, L. J., & Zutter, C. J. (2012). Study guide for Principles of managerial finance, 13th Edition, Global Edition, Pearson Prentice Hall.4. Ahn, S., Denis, D.J., Denis, D.K., 2006. Leverage and investment in diversified firms. Journal of Financial Economics 79, 317-337