The

Company
Financial Analysis Project
UACU Kyiv, December 19th, 2019

by Mariem Mazkhar, Artem Yatsyk, Marina Lubkina

Agenda

1. Overview
2. History
3. Mission
4. Sources of Revenues
5. Liquidity Ratios
6. Financial Leverage Ratios
7. Turnover Ratios
8. Profitability Ratios
9. Conclusion (Suggestion)
10. References 2
Overview
● American aerospace company
● a world leading producer of civilian and military aircraft,
helicopters, and space vehicles
● holds corporate offices in Chicago
● employs more than 153,000 people across the United States as
well as more than 65 other countries
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History ● founded on July 15th, 1916 by
William E. Boeing in Seattle

● in 1928 William Boeing formed

Boeing Airplane & Transport
Corporation

● in 2001, the world’s largest

aerospace company moved from
Seattle to Chicago

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Mission

“Connect, Protect, Explore and Inspire the World through Aerospace Innovation”

5
The Sources of Revenues

6
Liquidity Ratios

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Current ratio

The current ratio of the company is 1.44

times. This is ratio indicates that the
amount of current assets exceeds current
liabilities and although, 2 times is the
optimal ratio for its industry where the
standard is around 1 times due to its
heavy indebted nature, the Boeing
Company has a good current ratio.

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Quick ratio

The quick ratio is 0.31 times. This is not

an ideal ratio as it shows that the company
might be unable to quickly cover its
financial obligations.

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Cash ratio

The cash ratio is 0.07 times. As this

ratio measures the liquidity of a
company we can see that the Boeing
Company is not very liquid as its
ratio is below 1 times, this means
that the company would have a hard
time paying out its current liability
with its cash and cash equivalents.

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Cash Coverage ratio

The cash coverage ratio is 0.09. This

ratio is an indicator of a firm’s ability to
pay off its current liabilities with only
cash and cash equivalents.

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Interval Measure

The interval measure is approximately

1,177 days. This is a very good interval
ratio as it indicates the number of days
the company can operate using only the
funds it has on hand.

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Net Working Capital (NWC) to total assets ratio

In the last years this ratio was increasing,

meaning, that company's NWC is
increasing relative to its total assets.

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Financial Leverage
(Solvency) Ratios

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Total debt ratio

The total debt ratio is 1 times. As this

ratio indicates how much of its assets a
company would have to sell to pay off all
of its debts a ratio of 1 to 1 is not ideal
and the company should make effort to
decrease it.

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Debt-equity ratio

The debt-equity ratio is 285.24 times.

This result is implies that to every $1 of
shareholders' equity, the company has
$285.24 in total liabilities. Although by
average standards this is an abysmal
result it is quite standard for the industry
as it is very indebted heavy.

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Equity multiplier

The equity multiplier is 286.24 times. As

this ratio shows the percentage of assets
that are financed by the shareholders, as
this ratio is quite high this signifies that a
large portion of the firm's assets are
financed by debt.

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Long-term debt ratio

The long term debt ratio is 0.97 times.

This result shows that the company has
0.97 cents of long-term debt for each
dollar it has in assets. This is standard for
its industry while not ideal in average.

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Times Interest Earned ratio

The times interest earned ratio is 25.43

times. This ratio is an indicator of the
ability to meet the interest payments on
debt and as Boeing Company has a high
times interest earned ratio this is a good
ratio because it means that the company
presents less of a risk to investors and
creditors in terms of solvency.

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Turnover
Ratios

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Inventory turnover ratio

The inventory turnover ratio is 1.3 times.

This ratio indicates the number of times
the inventory is sold in a time period, in
this case a year.

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Days' Sales in Inventory ratio

The Days' Sales in Inventory ratio 0.09

days. This ratio indicates the number of
days the company needs to sell its
inventory. The Boeing Company has a
better Days' Sales in Inventory ratio than
its industry.

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Receivable turnover

Although the ratio has fallen in 2017, the

company was able to recover and
doubled the ratio in 2018.

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Days' Sales in Receivables

The days’ sales in receivables is 14 days.

This ratio indicates how effective a
company is in collecting debts and for its
industry the Boeing Company has a good
Days' Sales in Receivables.

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NWC turnover

The Net Working Capital turnover ratios

show that the results have declined over
two years.

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Fixed Asset Turnover

The fixed asset turnover is 8 times. This

ratio indicates how good the business is
in using its fixed assets to generate sales;
the Fixed Asset Turnover of 8% is good
for its industry.

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Total Asset Turnover

The total asset turnover is 0.86 times.

This ratio indicates the efficiency of a
company's use of its assets in generating
sales. In this case of 0.86 means that
every $1 worth of assets generated $0.86
worth of revenue.

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Profitability Ratios

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Profit Margin

The profit margin is 10.34%. This margin

shows the profitability of a company and
the percentage of 10.34% is an adequate
result to have.

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Return on assets (ROA)

The return on assets is 8.91%. This ratio

indicates how profitable the company's
assets are in generating revenue, and for
Boeing Company as the ratio is over 5%
it is a good ratio.

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Return on equity (ROE)

The return on equity is 2551.22%. This

ratio indicates the profitability of the
business in relation to its equity, in this
case it shows that every dollar of
stockholders' equity generates 25.5
dollars of net income.

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Conclusion (Suggestion)
The Annual Financial report of the previous 3 years of the Boeing company indicate
that the performance of the company was satisfactory, with steady increase of
profits.
However, this may change with the release of 2019 Financial report as the Boeing
experiences unforeseen problems with their new aircraft. This may decrease the
customer satisfaction and, therefore, sales in the year of 2019.

Suggestion: Boeing should decrease the amount of their liabilities and try to mitigate
the consequences of the plane crashes.

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Anon., 2017. Boeing: Great Opportunity For A Patient Investor. [Online]
Available at: https://seekingalpha.com/article/4093006-boeing-great-opportunity-for-patient-investor
[Accessed 2019].
Company, B., n.d. boeing.com. [Online]
Available at: https://www.boeing.com/principles/vision.page
[Accessed 2019].
Company, B., n.d. boeing.com. [Online]
Available at: https://www.boeing.com/company/general-info/
[Accessed 2019].
Company, B., n.d. boeing.com. [Online]
Available at: http://www.boeing.com/company/key-orgs/boeing-capital/index.page
Company, B., n.d. boeing.com. [Online]
Available at: https://www.boeing.com/company/about-bds/
[Accessed 2019].
Stanley I. Weiss, A. R. A., n.d. britannica.com. [Online]
Available at: https://www.britannica.com/topic/Boeing-Company#ref225622
[Accessed 2019].
https://s2.q4cdn.com/661678649/files/doc_financials/annual/2019/Boeing-2018AR-Final.pdf
https://s2.q4cdn.com/661678649/files/doc_financials/annual/2017/2017-Annual-Report.pdf
https://s2.q4cdn.com/661678649/files/doc_financials/annual/2016/2016-Annual-Report.pdf

References
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