Essays24.com - Term Papers and Free Essays
Search

Industry Averages and Financial Ratios Learning Team C

Essay by   •  August 14, 2015  •  Research Paper  •  469 Words (2 Pages)  •  1,379 Views

Essay Preview: Industry Averages and Financial Ratios Learning Team C

Report this essay
Page 1 of 2

Industry Averages and Financial Ratios

Learning Team C

FIN/370

July 24, 2015

Thomas Rietta


Boeing

Located in Chicago, Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. As a top U.S. exporter, the company supports airlines and U.S., as well as allied government customers in 150 countries. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performance-based logistics and training. (Boeing, 2015)

Industry Averages and Financial Ratios

The Tables below are comparing Boeing’s ratios for 2013/2014 with industry standards of 2012.

Solvency Ratio

Ratio

Boeing 2013/2014 

Industry Standard 2012 Comparison

Upper

Median

Lower

Quick Ratio

  .43/.37

1.60

.60

.30

Current Ratio

1.26/1.20

3.40

1.90

1.40

Current Liabilities/Net Worth

  .56/.57

25.60

41.20

117.40

Current Liabilities/ Inventory

1.20/1.21

119.20

127.50

205.40

Total Liabilities/Net Worth

      1/1

26.60

78.10

335.70

Fixed Assets/Net Worth Ratio

  .11/.12

29.90

45.10

71.80

As you can see when it comes to solvency Boeing is well in the Upper category in every category except for quick ratio and current ratio.  Quick ratio is in the median category, which puts them at a disadvantage.  Current ratio is in the lower category but Boeing can still pay current liabilities.

Efficiency Ratio

Ratio

Boeing 2013/2014

Industry Standard 2012 Comparison

Upper

Median

Lower

Collection Period Ratio

.00/.01

24.10

35.80

61.90

Sales/Inventory

2.02/1.94

11.40

7.30

3.40

Assets/Sales

1.07/1.09

47.30

107.70

180.40

Sales/NetWorking Capital

1.33/1.34

6.60

5.50

4.20

Accounts Payable/Sales

.11/.12

3.90

7.00

13.00

As for efficiency, Boeing is in the upper category in three out of five categories.  The two that are not in the upper category are actually in the lower category.  Sales/inventory and sales/net working capital are the two categories in the low.  Sales/inventory is in the low which means that when compared to the 2012 industry standards they are not having the sales or inventory turnover that competitors are having/doing.  Sales/net working capital shows that the company needs funds to raise sales.

Profitability Ratio

Ratio

Boeing 2013/2014

Industry Standard 2012 Comparison

Upper

Median

Lower

Return/Sales

.05/.06

6.60

4.50

-0.30

Return/Assets

.05/.05

9.00

4.50

0.40

Return/Net Worth

.05/.06

19.70

13.40

3.40

Profitability is in the lower category in every section.  This is showing that in 2012 Boeing would have not done well in profitability when put against the industry standards.

Conclusion

Boeing is holding their own in comparison to industry standards (2012). The can still pay the bills and maintain business. However, it also shows that they have room for improvement. Additional sales would help not only in regards to Inventory turnover, but ultimately it will assist in the improvement of company profits. As a leader in their industry we feel as though the company will improve over time.

Exhibit A

2013-2014 Ratios Details

Ratio

Equation

2013 Numbers

2013- Ratio

2014 Numbers

2014- Ratio

quick ratio

current assets- inventory/current liabilities

65074-42,912/51486

0.430

67,785-46,756/56,717

0.371

current ratio

current assets/current liabilities

65074/51,486

1.264

67785/56717

1.195

current liabilities/net worth

current liabilities/net worth

51486/92,663

0.556

56717/99,198

0.572

current liabilities/inventory

current liabilities/inventory

51486/42912

1.200

56717/46756

1.213

total liabilities/net worth

total liabilities/net worth

92663/92,663

1.000

99198/99198

1.000

fixed assets/net worth

fixed assets/net worth

10224/92663

0.110

11007/92633

0.119

 

 

 

 

 

 

collection period ratio

Accounts Receivable/Credit Sales/365

6,546/3627/365

0.005

7729/3371/365

0.006

sales/inventory

sales/inventory

86,623/42912

2.019

90,762/46756

1.941

assets/sales

assets/sales

92663/86623

1.070

99198/90726

1.093

sales/ net-working capitol

sales/ net-working capitol

86623/65,074

1.331

90726/67785

1.338

AP/sales

AP/sales

9498/86623

0.110

10667/90762

0.118

 

 

 

 

 

 

return/sales

return/sales

4585/86623

0.053

5446/90762

0.060

return/assets

return/assets

4585/92663

0.049

5446/99198

0.055

return/net worth

return/net worth

4585/92663

0.049

5446/92633

0.059

***Numbers in millions

References

Boeing Company Website, retrieved July 25, 2015 http://www.boeing.com/company/

University of Phoenix, link Dun & Bradstreet, retrieved July, 2015

        http://www.mergentkbr.com.contentproxy.phoenix.edu/index.php/login/iplanding

...

...

Download as:   txt (5.2 Kb)   pdf (140 Kb)   docx (12 Kb)  
Continue for 1 more page »
Only available on Essays24.com