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
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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 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 clearly aligned to case realities.
MARKING GUIDELINE
| Report Section |
What is Expected |
Marks |
| Introduction |
Provide a clear introduction to AirAsia’s post-crisis financial context and outline the purpose and structure of the report. |
5 marks |
| Short-term Financial Challenges |
Describe AirAsia’s cost structure and liquidity issues, and explain how short-term financial decisions affected operations. Use relevant financial theories. |
20 marks |
| Investment Strategy and Long-Term Value |
Select a major investment project. Explain its financing method, strategic purpose, and long-term value using investment evaluation concepts. |
20 marks |
| Capital Structure and Financing Decisions |
Discuss how AirAsia changed its funding structure and explain those decisions using capital structure theories. |
20 marks |
| Strategic Financial Recommendations |
Provide 2–3 relevant financial strategies for AirAsia’s future. Justify your suggestions based on theories and case relevance. |
15 marks |
| Conclusion |
Summarise your findings and reinforce the overall message of your report. |
5 marks |
| Presentation, Referencing & Language |
Use clear structure, academic language, and Harvard referencing. Minimum 15 credible sources. |
15 marks |
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