Statement For Boeing Company
A mission statement will be a short written description of the aims of Boeing Company. The mission of Boeing is to carry out extensive Research to identify customers’ requirements and determine the company’s capability to give a supply of their needs. Corporate objectives. These are the short term and long term goals of Boeing Company to plan wisely and implement programs will ensure success of Boeing Company in the air space and Nuclear space industry. David J 10-20 ?Boeing Company’s carries act Research and development of customers and client needs.
Boeing Company preoccupies with information technology to advance product and service products growth and development. Clerand D. 30-46 Responding to customer needs, specification and requirements in order to ensure quality delivery and satisfaction of customers needs. Financial objectives:
- Boeing Company aims at creating an attractive public image and good relationships in order to attract investors to buy shares whose funds will be for financing the Boeing Company’s investment programs.
- Boeing Company aims at reducing funding of the company’s operations and investment by debt capital.
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Debt capital may be expensive to the Boeing Company and its shareholders because the earning per share is reduce. Boeing company aims at maximizing revenue at the lowest cost possible. High revenue matched with low financing costs operational costs, administrative expenses and miscellaneous costs increase the company’s profit hence improving the company’s profitability and market value to ensure a market leader position for the Boeing company in the air space and nuclear space world. Business Development and growth to improve the firms market value.
Four applicable strategic management concepts (Business) Adequate and sufficient accounting practices to ensure full disclosures on Boeing Company’s financial statement maintaining the true and fair principle of accounting practices. Research and development on Technology to ensure quality and quantity of Boeing air space and Nuclear space products and services. Intensive marketing and Advertising to improve consumers knowledge of Boeing company’s products and services hence creativity an admirable public relations.
SWOT Analysis for Boeing Company. SWOT analysis will involve the strengths and weaknesses of Boeing Company together with opportunities and threats for the air space and nuclear space industry or market. Boeing Company has a strong brand name and this commands customer’s loyalty for its products. Boeing Company however has liquidity issues due to the unfavorable debt equity ratio. Nuclear space and airspace products and services are in great demand all over the world and this ensure great marketability of all products.
Nuclear and airspace industry has new players due lack of barrier of entry and this is causing rivalry and competition by new companies like air bus that have employed a lot of Research and development on technology. Boeing company should focus on making its strengths take advantage of existing opportunities in the market in order to maximize revenue at a low cost. The strong brand name should be matched with the existing marketability of airspace and nuclear space products. The company’s strengths, which comprise of customer loyalty should counter the weakness of competition caused by new players in the space and nuclear space industry.
The liquidity issues being experienced by the Boeing Company can be minimized by increasing revenues and sells given that demand of products and services is high. Jim v. SWOT Analysis for Boeing Boeing Company should also watch out on its liquidity issues because the existing competition from Airbus can lower its market value and may be lead to insolvency issues as suggested by the Debt to equity ration in the ration analysis below. I will consider Boeing’s financial statements the profit and loss Account for the quarter ended September 30 2007 and Balance Sheet as at Sep 30 2007.
Rations analysis involves the analysis of all figures appearing on the financial statements, which include the balance sheet and profit and loss Account. This analysis will help to determine the performance of the Boeing Company in terms of profit ability, liquidity or cash flow issues, the company’s operations in relation to its debts and loans and asset usage. Any investment by Boeing should contribute to the generation of revenues at the lowest cost possible and debt and credit facilities should be efficiently and effectively utilized to avoid cases of bankruptcy for the Boeing air space company. Profitability ratios:
Profitability rations give the comparison between the Gross or Net profits with the Revenue or Sale generated. They show what proportion of the sales by Boeing company yield clean gains or losses. Boeing Company may be making a lot of sales but this cash is utilized for the cost of sales, which include the opening stock, purchases and closing stock for air space goods or inputs. Gross profit margin ratio. = Gross profit/Sales Ram c. NYSE = 3310/16517 = 0. 2004 or 0. 2004 x 100% = 20. 04% For every one dollar of sales for Boeing Company only 5. 6% of that one dollar that is 0. 2004 cents yields the Gross profit.
The rest, 0. 8996 relates to the cost of sales that is opening stock, purchases and closing stock. This Gross profit margin ratio show how profitable Boeing Company is for each one dollar of sales revenue. Gross profit margin ration does not consider seeing expenses, General expenses, administration expenses and operating expenses. Gross profit, margin is an adequate measure of Boeing company’s profitability but it is not sufficient because Goods to be sold incur other expenses which can be attributed to sales. A Gross profit margin ratio of 0. 2004 is not good enough for the Accounting year ended 30 September 2007.
More needs to be done by Boeing Company to improve its Gross profit. Net Profit Ratio. Net Profit Ratio is given by the formula Net profit/sales (Revenue) = 2357/16517 = 0. 143 or 143% (0. 143 x 100%). For every one-dollar of sales by Boeing Company only 0. 143% cents can be said to be Net profit. A Net profit ration of 14. 3% for an air space company like Boeing is not good enough given that shareholders need a dividend and some credit on the Reserves Account is needed. Taxation, interest losses and gains have not been taken care of in this net profit calculation. More needs to be done to raise the ration above 14.
3% for the next financial year. Net profit margin ratio is an excellent ration for benchmarking against Boeing’s competitors n the air space industry. The Net profit margin ration is very common in evaluating firm’s performance in relation to profit generation. A net profit margin of 14. 3% indicates that Boeing makes little earnings. Payment of constant costs and margin gains for Boeing are made from revenue sales. This net profit margin of 14. 3% indicates that Boeing Company cannot control its production costs, which include selling expenses, holding and costs, operational expenses and financing costs together with interests.
Profitability ratios in general determine the success of Boeings company success in its operations to maintain the consistency and perpetuity concepts of any business entity. Low profitability ratio indicates that the Revenue of sales for Boeing Company may be to high with low gross profit and low net profit or Boeing Company sales or revenue may b to high as compared to the net or gross profit that may not be so high because a small net profit or Gross profit figures divided by another low sales figure does not give a high ration or percentage. The case of 14.
3% and 20% indicates that Boeing Company should product diversity in the air space industry in order to increase its market value and maintain a market leader position in the air space industry. Liquidity Ratios. Liquidity ratios are the major banking financial ratios. Liquidity ratios are carried out on financial statements to measure Boeing’s capability to meet its short-lived funding obligations when due. Boeing Company should thoroughly determine and evaluate the liquidity ratio in order to avoid going in to bankruptcy or get into insolvency issues to avoid being put under receivership.
Healthy liquidity ratio should not make a Boeing company’s to management to relax because different microeconomic and macroeconomic factors may influence the current assets to current liabilities in the short run or long run hence causing a destabilization of these liquidity ratios. Current Ratio Current ratio = current assets/current liabilities = 54787/30867 = 1. 77 Boeings current ratio can be presented as 1. 77:1 According to generally accepted accounting principles and practices, the best ratio is of 2% and the worst acceptable ratio for the current Assets is 1%.
Therefore Boeing company should at least target a current ratio of 2% for the next financial year. The management should therefore try to reduce the current liabilities figure of 30867 to around 27393 or increase its current assets to around 61734 in order to strike a balance of 2. 1. Boeing Company’s Net assets are not favorable for a player in the air space industry. The difference between current assets and current liabilities gives Boeing’s Net worth and this is the capability if Boeing to maintain and fund its current operations. This current ratio of 1.
7781 for Boeing Company indicates that the bank balances are less, Accounts receivable are also, low and goods in store for sales are not adequate. Boeing Company’s low current ratio of 1. 77% could also find that account payable are in excess or all short term liabilities need to be controlled. Boeing Company’s net worth may also be referred to as shareholders equity. At times it is also called the Book value. Boeing’s Net worth can only be given for a given period of time as the balance sheet reads, figures for transaction AS AT a particular end of a financial or economic year.
Current assets and liabilities keep changing and therefore Boeing stock of goods, Bank balance, Accrual, accounts receivable, accounts payable, short lived liabilities ad any other creditors payment will keep changing. The current assets figure of 54878 and current liabilities figures of 30867 will keep varying in subsequent financial or economic years. Net worth for the Boeing Company will be given by the current ratio and their financial position can therefore represented as 1. 77% Quick Ratio The quick ratio an also be referred to the Acid test ratio. Quick ratio is given by the formula
Cash plus marketable securities + Accounts receivable)/current liabilities. Replacing the figures for Boeing Company as at 30 September 2007, we have: (9464 + 6030 + 2940)/30867 = 18434/30867 = 0. 59 Boeing Quick ratio can be given as 0. 59:1 Quick ratio is the best analysis for Boeing company liquidity position. Big quick ratios are required incase Boeing company had a difficulty in borrowing and a short-lived notice. Quick ratios of above 1% shows that incase the revenue from sales never occurred, Boeing company would still make its present financial obligations with a very fast available finances in hand.
Quick ratios of 1:1 are taken to be satisfying not incase the main quick assets under Debtors Accounts receivable and Boeing company has a style for searching for Accounts receivable (Debts at a low rate than that of settling accounts payable Boeing Company’s ratio of 0. 59% is not satisfying and the company may not be able to pay the present obligations with fast asset Leverage ratios Leverage ratios are the ratios on the financial statement, the balance sheet that indicate the extend in which Boeing company’s business may be leveraging itself by use of borrowed funds.
Leverage ratios therefore will show the extend to which Boeing is financing its assets by using loans and funds from outsiders apart from the shareholders funds. Boeing can also use leverage ratio to compare the extend of variation of funds third parties as compared to the funds from stockholders. The company management will also be in a position to determine the efforts needed to create a balance of shareholders funds and loaners/debtors to the company because debts and loans both long term and short term may not be healthy to finance the assets and investments of an air space company like Boeing.
Leverage ratio will therefore help Boeing forecast on possible capability of its assets to pay debts of loans. Total Debt/Total Asset Total debts/Total ratio for Boeing Company is given by Total debts/total assets = 7555/54787 = 0. 138 Total debt/total assets ratio can show unfavorable financial policies because of Boeing Company’s vulnerability to debt expenses and revenue in the air space industry. A low total debt/total assets ratio indicated that very little of the company’s total assets are financed by debts.
A high total debt/total assets ratio shows that most of the Boeing’s Assets are not mainly financed by debt capital. Boeing ratio of 0. 138 or 13. 8% indicates that 13. 8% of its total assets are financed by debt and loan funds. This may not be very healthy for Boeing Company, which is operating in the air space industry. The company needs more of shareholders funds in are form of shares to fund its capital investment projects. Incase loaners long term credit is withdraw, Boeing will not have funds to run its assets that are supposed to generate, revenue for the company and shareholders in improved earnings per share.
The fair value of the total assets and long-term debt gives the extend of company’s leverage. The figure for the total assets to be used for the calculation should include current assets, plant and machinery, cash, stocks, creditors, debtors, patents, goodwill and all investments. The ratio can be used by Boeing to give the risking of long-lived debt. Total Debt/Total Equity of Shareholders. Total debt/total equity of shareholders is the real earning ratio. Total debt/total equity of shareholders is equal to long term debt/shareholders equity. = 8580/646 = 1.
339 Boeing company’s Total debt (Total equity of shareholders of 1. 339 is not favorable for it shows the likelihood of a difficult in making up for long lived debt commitments. Boeing’s debts are in excess of total equity of shareholders by 1. 339. The company is not doing well because most of its funds and finances are from loaners and debtors. Shareholders need to contribute more to the company’s finances through the purchase of more shares or selling of Boeing Company’s shares at the stock markets. Most possibly the New York stock exchange.
Debts come in with related costs and expenses, which include interests and cases of loaners deducting to auction the company’s assets in order to claim their funds given to the company. Total debt to equity ratio measures the extend for the company’s balance of financing and funding by shareholders and loaners of the operations Boeing company’s operations and assets that are use to generate revenues and sales. Activity Ratios: Activity ratio is an accounting ratio that can evaluates Boeing company’s capability to change various accounts in the balance sheet to cash form through sales.
Boeing Company can change its production to be in cash from as soon as possible because high revenues can be generated. Activity ratios can be often used to perform major analysis in different forms or business entity. Boeing can also predict its future operations on performance and analysis of activity ratios is very critical and should be part of the Accounts department’s duties and responsibilities so that strategic plans can ensure the company’s success. Inventory Ratio The inventory ratio shows the number of times that Boeing company’s stock for inventory can be sold or replaced over an acting or financial year.
Inventory turnover ratio can be given by sales or the cost of goods sold divided by Average inventory. By replacing the figures for Boeing Company for the year ending 30 September 2007 we have 16517/8194 = 2. 015 Therefore Boeing stock or inventory turns times in one financial year or economic year. The ratio of 2. 01 can be rounded off to 2. Inventory ration can be compared to other players in the air space industry. This is an admirable inventing turn over ratio and shows adequate and sufficient sales and this result to less closing stock.
In case the ratio for Boeing was high this could indicate low sales figures which leave all stock from the stores and therefore the inventory figure to appear on the balance sheet will be low and a high sales figure divided with a low figure for the inventory will give a high ratio. High inventories or stocks are not healthy for they show a capital investment with a zero rate of return. This may lead Boeing Company into trouble and may finally fall. Reza V. 495 Sales/Total Asset ratio Total Assets to sales ratio is given by sales/total asset Replacing the figures for Boeing Company for the year to 30 September 2007 we have:
16517/54787=0. 3015 The total assets to sales ratio for Boeing company is 0. 3015 and it is a low ratio indicating that Boeing Total assets are not giving adequate and sufficient revenue. The Assets for the company are high at 54787 while the sales figure for the quarter ending 30 September 2007 is 1657. Boeing company’s assets which include plant and machinery, equipments, stock, cash, Accounts receivable are not being utilized efficiently to generate adequate revenue replacement of assets and their depression which may be reducing the efficient and effective productivity of the assets.
Recommendations For Boeing Company: The mission of Boeing Company is to serve clients and customers to their satisfaction by employing Research and development in technology to improve their products and services. Boeing Company should their work on their profitability, which is not admirable as noticed on the gross profit and net profit margin ratios. Boeing liquidity is not favorable as observed on both the current ratio and quick ratio. In the short term, it may not be able to meet its short-term obligations when they fall due and may lead to bankruptcy.
Most of Boeing Company’s funds and finances are though debt capital and should be avoided in its strategic plan because debt and loans may be costly-inventory and Asses should be renovated through technology creativity to improve sale. Shawn C 56-70 Bibliography Calgary, Alberta. Profitability Ratios Calculation Formula and Explanations. Bizwiz Consulting. Canada.
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