Industry Averages and Financial Ratios Learning Team C

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

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

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

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

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