2024 Week 8 Business Activity Worksheet (1)

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Portland Community College *

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101

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Management

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Apr 3, 2024

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Note: To edit this document, go to File and select Make a Copy or select Download as and choose your file choice. You may need to be logged into your PCC Gmail account for these options to be visible. Week 8 Business Activity: The Sky’s the Limit! This activity has two parts. Please complete all questions in both parts. Part I Use the information from Chapter 12 of your textbook to explore why accounting plays such an important role in business. Answer the following questions. Who uses accounting information? Individuals who use accounting information include managers of all types of organizations, owners of all types of organizations, government officials, creditors, and lenders. What do they use it for, and why do they find it helpful? All stakeholders depend on accounting information in one way or another. Managers use it for planning, decision making, and control, owners use it to evaluate financial stability and make investment decisions, lenders and creditors use it to manage risk and make lending decisions, and government and regulatory agencies use it for tax compliance and investor protection. What problems would arise if management wasn’t provided with accounting information? Without accurate accounting information, management wouldn’t be able to make decisions effectively. Accounting information provides management with financial insight, and without that I would imagine it would be difficult to make concrete decisions regarding budgeting, investing, or strategic planning. Part II Use the information from Chapter 13 of your textbook to explore how people research and make investment decisions. This part will take some time so be sure you start early in the week!

Note: To edit this document, go to File and select Make a Copy or select Download as and choose your file choice. You may need to be logged into your PCC Gmail account for these options to be visible. Step 1: Consider this scenario You have been awarded access to $100,000 in hypothetical capital for a short-term investment. There is, however, a catch; you have to spend the money on airline stocks. Rather than fly by the seat of your pants, you’ll want to research a number of stocks. Step 2: Research the Airline Industry Read the short articles Is the Airline Industry an Oligopoly Airline-profits-to-soar-in-2023 3 Airlines To Watch ● Choose 3 different airline companies from the list below. Be sure to include low-cost airlines as well as larger carriers. The following links provide access to information pages on Yahoo.com Finance. ○ Delta Air Lines ○ Jet Blue Airways ○ Southwest Airlines ○ United Airlines ○ Hawaiian Airlines ● Complete the Table below for each airline you choose. Use this table to report what you learned Airline Brief description Percentage Change in Revenue over the last fiscal year Percentage Change in Net Income over the last fiscal year Current Earnings per Share (EPS) Current PE Ratio Current Stock Price Delta Airlines Delta Air Lines is a major American airline, known for its extensive domestic and international network, modern aircrafts, and strong operational performance. 14.76% 249.7% 7.17 5.80 41.57

Note: To edit this document, go to File and select Make a Copy or select Download as and choose your file choice. You may need to be logged into your PCC Gmail account for these options to be visible. United Airlines United Airlines is the 3rd largest airline in the entire world. They have very large and vast route network. 19.49% 255.22% 8.73 5.59 44.14 Southw est Arilines This airline is known for their focus on customer service and affordable prices. 9.6% -13.73% 0.76 44.88 34.11 Some hints for finding this information ● The company will be described in a “Company Profile” appearing toward the top of the page. ● You can get most of the financial information (stock price, EPS, PE ratio) in the summary information listed near the top of the page. ● Find the remaining financial information (changes in revenues and income), by clicking on “Financials” near the top of the page. This will bring you to the company’s income statement. ● When reviewing financial statements to calculate percentage changes in revenues and net income, be sure you click on “Annual Data” to get information for the entire year rather than for just the quarter. Step 3: Invest Your Money Use the table below to document your choice of hypothetical stock purchase. You may choose one airline or multiple. Be sure to spend most of your $100,000. Add or delete rows if needed. If you have time go back after a week and check your picks - did the price go up or down? Use this table to document your investment Airline Stock Symbol Price per Share Number of Shares Total Cost Change over 1 week Example: FreeBird Airways FBAW $59.63 1112 $66,308.56 +.63 Southwest Airlines LUV 34.20 2,924 100,000.8 +.49

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Note: To edit this document, go to File and select Make a Copy or select Download as and choose your file choice. You may need to be logged into your PCC Gmail account for these options to be visible. Use the research from your reports make a 3-5 sentence argument to defend your choices. Your argument may include opportunities for the company, potential threats the airline may encounter, and the outlook. Use industry-wide considerations and knowledge. I decided to put all of my money into Southwest Airlines because I thought it had the most potential for profit. It had the lowest stock price at the time out of the two other airlines I chose, and I believed that its strong track record of customer satisfaction and operational efficiency would lead to future growth. I also considered the fact that spring break is coming up, which typically leads to an increase in air travel demand and could further boost Southwest's stock value. Some threats that I considered were potential fuel price increases and competition from other major airlines such as Delta and United Airlines, but I ultimately felt confident in Southwest's ability to outperform its competitors. Be sure to return to the assignment submission area in our D2L Brightspace course to submit your assignment!

2024 Week 8 Business Activity Worksheet (1)

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