Westjet Analysis Essay

2905 Words Jan 23rd, 2012 12 Pages
November 15, 2011

Company Overview Westjet, established in1996, is a low-cost Canadian airline company specializing in flights to various destinations in Canada, the United States, the Caribbean and Mexico. It is a non-union, self-run employee organization that focuses on world-class guest experience at an affordable rate. Westjet prides itself on a corporate culture that blends devoted employees with efficient service. Westjet’s business plan, since day one, has been focused on a distinct advantage over other airlines: lower costs and increased customer satisfaction. It executes this plan by investing in one type of aircraft to serve main cities in North America instead of investing in different aircrafts needed to reach all
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Westjet’s financial statements are prepared on both an interim and annual basis. That is, statements are prepared and presented to the public quarterly and annually and follow a standard calendar year. This, in accordance with the time-period assumption, has been the process since the establishment of Westjet in 1996. This shows consistency with their statements and allows the information to be comparable because of the standard calendar dates. In agreement with the cost principle Westjet records all assets at cost and are then amortized, using various methods, to determine the net realizable value. For loans and receivables, Westjet uses the effective interest method to depreciate these assets. All property, plant and equipment and recorded at cost and amortized in individual accounts to the estimated residual value. Finally, intangible assets are depreciated using the straight-line method and have a lifetime of 5 years. All further information that may affect the values of assets is presented in the financial notes, illustrating the depreciation over time for each asset. This proves the consideration for the full-disclosure principle as all useful information can be obtained within the notes. Westjet uses multiple amortization methods because different methods prove more effective for different assets. However, once a method is used it will continue to be depreciated with that method. In general, Westjet uses the method that

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