Ratio Analysis of Boeing

Topics: Boeing, Lockheed Martin, Northrop Grumman Pages: 6 (1390 words) Published: May 14, 2008
The Boeing Company operates in the industry of aerospace and defense. The largest aerospace company, Boeing is the #2 maker of large commercial jets (behind rival Airbus) and the #2 defense contractor behind Lockheed Martin. The aerospace and defense industry did suffer the effects of a post-9/11 society. Because of the weakened and fearful tourism market, spending on commercial aircraft did decrease. But recently, revenues have improved considerably as travelers are becoming more comfortable with flying again. Defense expenditures are the leading source of revenue for the US industry. Boeing, despite aerospace spending decreasing, has profited from projects such as the missile interception network and revamp of the US armed forces. The main players in the defense industry are Boeing, Northrop Grumman, Lockheed Martin, General Dynamics and Honeywell International. Below is a table illustrating the revenues of the lead companies in the defense industry, according to Reuters : NameRevenue (M)Revenue Growth Revenue Growth, 3 years

Industry Average$32,313.813.4%12.7%
The Boeing Company$61,53014.7%7.0%
Lockheed Martin Corporation$39,6206.5%7.6%
Honeywell International Inc. $32,16713.4%10.7%
Northrop Grumman Corporation$30,1480.3%4.5%
General Dynamics Corporation$24,06314.7%13.8%

As stated in the opening Boeing is the largest manufacturer of commercial jetliners and military aircraft. Boeing makes defense systems, missiles, satellites, and other space vehicles. Boeing has customers in over 90 countries around the world and is one of the largest U.S. exporters. Boeing employs about 150,000 and is based in Chicago, IL. It’s business operations are broken down into two units: Boeing Commercial Airplanes and the other is Boeing Integrated Defense Systems.

Boeing Historical Data6





2005Boeing is created by William E. Boeing in Seattle, Washington Boeing created an airline, named Boeing Air Transportation
Because of the air mail act, Boeing split into 3 smaller companies, Boeing Airplane Co., United Airlines, and United Aircraft Corporation. Due to WWII, Boeing steps up it’s production, focusing on the B-17. Boeing began delivery of it’s 707, it’s first commercial jet airliner. Boeing faced a crisis in the Apollo program, which was cancelled after they put lots of work into it. Boeing produced it’s 1,000 737

Boeing introduces it’s 777
Boeing acquired Rockwell’s aerospace and defense units
Boeing moves from Seattle to Chicago
Boeing’s Commercial Airlines sales drop due to the terrorist attacks of September 11th.

Boeing gets investigated for getting confidential secrets and for stealing trade secrets from Lockheed.

Airbus surpasses Boeing as world’s largest commercial jet maker.

Air Force lifts it’s 20 month ban on Boeing prohibiting them to bid on satellite contracts.

Boeing Financial Information7





Revenues (In Billions)



Net Income
(In Billions)



Change In Cash and Cash Equivalents
(In Billions)



Boeing has seen a lot in it’s over 90 years of business. Boeing has placed itself into lots of different endeavors and has seen differing levels of success in these markets. According to Yahoo finances it’s total assets have been increasing while at the same time their debts have been decreasing. Even though there was a negative in change in cash and cash equivalents in 2004, Boeing did make a large payment towards lowering their debt in 2004. Ratios are very important in determining if a company is worth investing in. There are many ratios an investor can look at before determining if it is worth investing in a particular company. For instance, an important ratio is the earnings per share (EPS) on common stock. This ratio is computed by taking a company’s net income and...
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