The Quick Ratio For Bombardier

Canadian based airline may find it hard to find strong support from US and International customers

Bombardier has grown substantially via acquisitions since 1989. These acquisitions allowed Bombardier to expand operations, however, in doing so they inherited multiple different information systems, processes and business practices. Bombardier, had become a textbook silo company.

Air Canada is Canada 's largest full-service airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. trans-border market and in the international market to and from Canada. In 2010, Air Canada improved its reputation as one of the world’s leading international air carriers. Significant progress was made on executing and delivering on its four key priorities and this, coupled with improving economic conditions, allowed Air Canada to record operating income of $407 million in 2010, a $677 million improvement from 2009. Air Canada’s financial strategy is to continue to improve both the level and sustainability of its

They faced challenges from acquiring many companies because during the acquisitions Bombardier inherited the data, processes and systems of each company which created inefficiencies. Systems didn’t communicate with each other resulting in low inventory turns and price inconsistency. This was not productive for Bombardier and was time consuming for the employees. The biggest problem was the low visibility of inventory and the lack of communication between systems. Bombardier had now a global presence but was not organized to maintain growth without changing the vision and processes. Another challenge is resistance to change, this factor can have a huge impact on the new vision and

We interview the site general manager for a company called Bombardier Transportation. His name is Jeff Gaffney. His official company title is MARC Operations General Manager. Bombardier Transportation is one of two subsidiaries of the company. The other half is Bombardier Aerospace. The parent company is called Bombardier Inc. Bombardier Inc. is headquartered in Montreal Canada. Jeff Gaffney is only involved in the transportation division of the company which is headquartered in Berlin Germany. Bombardier is the leading manufacturer of trains and the third leading manufacturer of planes. The company as a whole has roughly about 72,000 employees with a revenue averaging around $16.8 billion. These numbers are statistics split between the two divisions of the company. As stated before Mr. Gaffney is involved in the transportation division of the company so that is what the interview was primarily about.

Quick ratio is another measure of liquidity. In quick ratio we consider only liquid assets and its standard ratio is 1:1. Quick ratio of Peyton Approved is 7.63. Thus, there is no doubt that the company has got excellent liquidity. Company has enough liquid assets to pay off current liabilities.

Establishing an effective corporate culture for the new conglomerate is essential to Bombardier Transportation’s success. Pierre

First of which, is the current ratio. It has been rapidly declining since 2000. To me this indicates that there is a liquidity issue. Each year their trade debt increase exceeds the increase of net income for the company. As a result, the working capital has taken a nosedive from $58,650 in 2002 to only $5,466 in 2003.

Canadair 50 seat regional jets are continuing to be turned out at a rate of 60

This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).

Not capitalizing on the share that they have. WestJet could be charging more for fares, albeit at the risk of losing the loyalty of their guests.

Overview Bombardier Aerospace is a division of Bombardier Inc. and the third largest global airplane manufacturer after Boeing and Airbus. Its headquarters are in Quebec, Canada, and with 33,600 employees is poised to become a major player in helping the developing world acquire aircraft. The C-Series is a family of narrow-body, twin-engine, medium range jet liners which, despite some challenges in orders, remains a committed product line. It is designed for the 100-150 seat market, which is about 20,000 aircraft globally and represents about $250 billion in revenue over the next few decades. One interesting fact about the C-Series is that it is truly global in components and supply, sourcing from manufacturers in China, Italy, The Netherlands, France, the United States, and Great Britain (Change is in the Air, 2012).

Air Canada’s early strategy was to grow the business, with minimal concern about their staff members and customers. Without any benefits or rewards their staff felt underappreciated. Their customers felt as though their feedback wasn’t being heard but in the eyes of Air Canada as long as their business was expanding, they were satisfied.

The Quick Ratio also known as Acid Ratio is used by firms to determine liquidity position. It explains if the firm is able to pay all of their current debt liabilities. (Dyson, 2010) The graph above illustrates that over the period from 2007 to 2011 quick ratio was not more that 1, which means that their debts might not be covered all. The graph also indicates that a peak was in 2011.

The quick ratio for Boston Beer Company is 1.33. A company’s quick ratio is an indicator of a company’s short-term liquidity. This ratio is a more conservative form of the current ratio because it does not take into account inventory of the company when determining its current assets. Boston Beer Company still has a favorable ratio well above 1.0. While their current ratio is much better with all the inventory, Boston Beer Company is still a reliable company that can pay off its short term debts if need be.