Application of the CorporateMetrics Methodology in the Air China Company

Bo Peng

Master's thesis

Abstract:

The main objective of this paper is going to apply CorporateMetrics methodology for predicting earning after tax of Air China Company in 2014 and 2015 and also estimating the net earnings at different level of risks, which are based on this corporate’s historical income statements. Overall, we split this thesis into 5 main parts. In chapter 2, the basic methodology of CorporateMetrics will be described. Then, the way to decide the input data and make a predicted estimation will be introduced. Moreover, some important financial models and quantification of risk methodologies will be continually explained in more details. The main purpose of this methodology part is to introduce some basic knowledge of this thesis. In chapter 3, we will introduce you some basic information about our selected company-Air China Company. This chapter will be divided into 4 sub-parts, which are the overview of this company, description of this company’s history, SWOT analysis of Air China Company and airline industry analysis in China. Chapter 4 is an application part, which is also regarded as the most important part in the whole thesis. In this chapter, the real data and methodologies that are introduced in chapter 2 will be combined together to get the specific value of our selected company. The data will be selected from Air China Company’s annual reports. In chapter 5, after having an overall view of all figures and tables we’ve got in part 4, the conclusion about this company’s past data and predicted estimations will be stated as a final summary.

Abstract:

The main objective of this paper is going to apply CorporateMetrics methodology for predicting earning after tax of Air China Company in 2014 and 2015 and also estimating the net earnings at different level of risks, which are based on this corporate’s historical income statements. Overall, we split this thesis into 5 main parts. In chapter 2, the basic methodology of CorporateMetrics will be described. Then, the way to decide the input data and make a predicted estimation will be introduced. Moreover, some important financial models and quantification of risk methodologies will be continually explained in more details. The main purpose of this methodology part is to introduce some basic knowledge of this thesis. In chapter 3, we will introduce you some basic information about our selected company-Air China Company. This chapter will be divided into 4 sub-parts, which are the overview of this company, description of this company’s history, SWOT analysis of Air China Company and airline industry analysis in China. Chapter 4 is an application part, which is also regarded as the most important part in the whole thesis. In this chapter, the real data and methodologies that are introduced in chapter 2 will be combined together to get the specific value of our selected company. The data will be selected from Air China Company’s annual reports. In chapter 5, after having an overall view of all figures and tables we’ve got in part 4, the conclusion about this company’s past data and predicted estimations will be stated as a final summary.

Keywords

CoporateMetrics, Net profit prediction, Financial model, Quantification of risk

Keywords

CoporateMetrics, Net profit prediction, Financial model, Quantification of risk

Language used: English

Date on which the thesis was submitted / produced: 25. 4. 2015

Thesis defence

• Date of defence: 27. 5. 2015
• Supervisor: Miroslav Čulík
• Reader: Petr Gurný

VŠB - Technical University of Ostrava

Ekonomická fakulta

Master programme / field:
Hospodářská politika a správa / Finance