FIN6554 Finance for Managers Assignment 2 Report | SEGi

Instructions to Students

This assignment is a continuation of your earlier analysis of AirAsia completed in Coursework 1. In this task, you will transition from financial calculations to strategic financial analysis and decision-making.

Your role is to act as a financial advisor to AirAsia, providing professional recommendations to strengthen the company’s financial position. This requires a critical examination of past and current financial decisions, as well as the formulation of practical financial strategies for improvement.

Key Requirements for Your Report Include:

• A brief Introduction and Conclusion (approximately 150–200 words each)
• A well-supported discussion using financial terminology, relevant data, charts, and evidence drawn from company reports or credible sources
• Proper referencing using the Harvard Referencing Style, with a minimum of 10–15 academic or industry sources
• Submission in Word format via Turnitin. The similarity index must be below 15% to meet academic integrity requirements
• Students are encouraged to refer to the provided marking guideline to understand the expected standards and evaluation criteria

FIN6554 Task:

Prepare a structured report that addresses the following three main sections.

Section 1: Short-term Financial Challenges (600–700 words)

• Identify and explain the main short-term financial challenges faced by AirAsia.
• Analyse the cost structure (fixed vs variable components), and how it affects breakeven, pricing flexibility, and risk exposure.
• Discuss how the company managed short-term cash flows, working capital, or operating costs.
• Link your analysis to relevant financial theories such as CVP analysis, liquidity management, and cost control frameworks.

Section 2: Investment Strategy and Long-Term Impact (600–700 words)

• Choose one major investment decision made by AirAsia post-crisis.
• Describe the financing method used and justify whether it was suitable.
• Explain how financial tools like NPV, IRR or payback period would be used to assess such an investment, but do not recalculate the values.
• Evaluate whether this investment supports long-term shareholder value, financial sustainability, or competitiveness.

Section 3: Capital Structure and Financing Decisions (600–700 words)

• Examine AirAsia’s capital structure changes.
• Assess how these decisions affected its cost of capital, financial risk, and investor sentiment.
• Apply at least one capital structure theory to explain whether the strategy was optimal.
• Support your discussion with data and financial logic.

Final Section: Strategic Financial Recommendations (300–400 words)

• Based on your analysis above, propose 2–3 strategic financial recommendations to improve AirAsia’s financial resilience.
• Each recommendation should be justified using relevant financial theory and aligned with case realities.