The Boeing Company Financial Health

4602 Words Jul 13th, 2012 19 Pages
Introduction

The goal of the study is to provide overall financial statement overview of The Boeing Company using the knowledge obtained during the Financial Management course.

The main question of the study is how financially well the company is at the moment and what investment expectation it generates on the market nowdays.

The Boeing Company background

The company was originally founded by William Boeing on July 15, 1916, as "The Pacific Aero Products Company". Two years later it was renamed into “The Boeing Company”, on May 9, 1917. Since that date the company grew and acquired a lot of its competitors, including the McDonnell Douglas in 1997.

[pic]

The Boeing’s structure consists of two main divisions and two
…show more content…
Reasons:

- In comparison to 2008, sales in 2010 increased by $3381 million.

- In comparison to 2008, CGS in 2010 increased only by $1513 million.

Boeing’s 2010 Gross Profit Margin ratio is comparable with the industry norm of 19,7%.

ROA ratio indicates the efficiency with which management has used its available resources to generate income. In 2009 there was a decrease in ROA value, but ROA in 2010 matches the industry average. That means that assets in 2010 were used efficiently.

ROS ratio indicates the profitability generated from revenue and hence is an important measure of operating performance. In 2010 return on sales reached the highest value of 5,14%. This indicates that the earning power of the business improved in 2010, but it’s still below the earning capacity of an average firm in the industry. Reasons for increase:

- In comparison to 2008, operational income in 2010 increased by $983 million. - In comparison to 2008, sales in 2010 increased by $3381 million.

The decline in ROA, ROS, Gross Profit Margin and OIRI in 2009 was caused by the decline in Net Income from $2676 to $1312. In 2009 the company to write off $2.7 billion because it considers the first three Dreamliners built unsellable and suitable only for flight tests. These expenses could be found in income Statement as R&D expenses. R&D increased in 2009 by $2738 million in comparison to 2008 and resulted in significant
Open Document