Boeing Financial Statement Analysis

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Financial Statement Analysis Project

The Boeing Company

November 11, 2004

Table of Contents

I.Firm, Industry, and Environment4
A.Description of firm and environment4
B.Discussion of competitive environment6
C.Economic climate and outlook8
D.Other relevant factors, e.g. governmental regulations, labor relations, litigation, etc.8 II.Evaluation of Balance Sheet10
A.Description of asset structure11
a.Current Assets11
b.Customer and commercial financing12
c.Property, plant and equipment, net12
d.Goodwill and Other acquired intangibles, net13
e.Prepaid pension expense13
f.Deferred income tax13
g.Other assets14
B.Description of liabilities14
a.Current Liabilities14
b.Accrued retiree health care and Accrued Pension plan liability14 c.Deferred lease income14
C.Description of capital (equity) structure15
D.Ratio Analysis of Financial Statements15
a.Liquidity Ratios16
b.Debt Management / Leverage Ratios16
c.Activity Ratios17
d.Profitability Ratios18
III.Evaluation of Income Statement19
A.Profitability measures (from the ratio analysis above)19 B.Changes in accounts and categories19
IV.Analysis of Cash Flows20
A.Ability to generate cash flows in the future20
B.Capacity to meet obligations for cash20
C.External financing needs21
D.Management of investing activities23
E.Implementation of financing and investing strategies24
V.Evaluation of Financial Statements24
A.Common Size Statements24
a.Common Size Balance Sheet25
b.Common Size Income Statement26
B.Short-term debt and liquidity27
C.Capital structure and long-term solvency27
D.Operating/sales performance 28
VI.Outlook, Summary, and Conclusions28
A.Outlook for performance28
B.Investment potential28
C.Credit assessment29
D.Strategies to improve performance29
E.Summary and conclusions29
VII.References30
VIII.Appendix A – Calculations31

I.Firm, Industry, and Environment

A.Description of firm and environment

The Boeing Company is the world's leading aerospace company and a top US exporter in terms of sales. Boeing provides products and services to customers in 145 countries.

The Boeing Company (Boeing Corporation) is, perhaps, best known for its line of civilian aircraft, the most famous being the Boeing 747 Boeing is the world's second leading weapons manufacturer and the main contractor for the Space Shuttle.

The Boeing Company operates in four principal segments: Commercial Airplanes, Military Aircraft and Missile Systems, Space and Communications and Boeing Capital Corporation (BCC). Commercial Airplanes operations principally involve development, production and marketing of commercial jet aircraft and providing related support services. Military Aircraft and Missile Systems operations principally involve research, development, production, modification and support of military aircraft, both land-based and aircraft-carrier-based, as well as helicopters and missiles. Space and Communications operations principally involve research, development, production, modification and support of space systems, missile defense systems, satellites and satellite launching vehicles, rocket engines and information and battle management systems. BCC is primarily engaged in the financing of commercial and private aircraft and commercial equipment.

Among the models Boeing has produced are the B-17 Flying Fortress, 1935; the B-52 Stratofortress (1952); the Chinook helicopter (1961); the first jetliner, the Boeing 707 (1957); the jumbo jet or Boeing 747 (1969); the jetfoil (1975); and the 777-300 jetliner (1997).

The company was founded in 1916 near Seattle, Washington, by William E Boeing, as the Pacific Aero Products Company. Renamed the following year, the company built its first seaplane and in 1919 set up an airmail service between Seattle and Victoria, Canada.

Boeing bought US aircraft manufacturers McDonnell Douglas...
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