Doncouse_Jeremy_Week - 2008 of $2,071,000 after posting its highest total revenue for all three years 3 Stockholder’s equity has posted losses in

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Jeremy Doncouse FIN310 American Airlines Web Exercise Page 151 1. Founded in 1934 AMR operates in the airline industry in the United States. The principle subsidiary, American Airlines, provides service to about 150 destinations throughout the world. They also provide freight service to shippers. Via its subsidiaries, AMR provides connecting services from nine buys American cities to many smaller markets throughout North America and the Caribbean. With service in 250 cities in 40 countries and 3,400 daily flights AMR operates 626 aircraft under the name American Airlines and 266 under the name AMR Eagle Aircrafts. Its headquarters is in Fort Worth, Texas. 2. Total revenue from 2006 to 2008 has steadily increased from $22,563,000 (all numbers in thousands) to $23,766,000. However, the increase in total revenue has not translated into net income. AMR was profitable in both 2006 and 2007. It realized its biggest loss in three years in
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Unformatted text preview: 2008 of $2,071,000 after posting its highest total revenue for all three years. 3. Stockholder’s equity has posted losses in two of three years. In 2007 AMR posted its only increase in equity of $2,657,000 (all numbers in thousands). AMR lost $606,000 in 2006 and lost a whopping $2,935,000 in 2008. This data, taken together with total revenue and net income is alarming because liabilities continue to outpace assets. In the short-term operating in a deficit isn’t a major concern, but if the trend continues long-term, then it may prove detrimental to the viability of the company. 4. AMR and its immediate financial future seem to be in question. A less promising 2009 and 2010 seems to be in its future. 5. AMR seems to be at the bottom of the pack. The industry posts an operating margin of 0.84% while AMR is at -3.45%. UAUA is doing worse but everyone else seems to be doing better....
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This note was uploaded on 03/08/2011 for the course FIN 310 taught by Professor Unknown during the Fall '09 term at Mountain State.

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