The Aerospace & Defense Industry
The Boeing Company
Table of Contents
1. PRESENTATION OF THE BOEING COMPANY5
1.1 Industry Analysis6
1.2 Business of The Boeing Company7
1.3 Origin and History’s Timelines of The Boeing Company8 1.4 Management and Organizational Structure of The Boeing Company11 1.5 The Corporate Strategy of The Boeing Company14
2. THE SWOT ANALYSIS OF THE BOEING COMPANY17
3. THE MARKET POSITION OF THE BOEING COMPANY21
3.1 The potential threat of new sellers entering the market21 3.2 The threat of substitute products becoming available in the market21 3.3 The impact of the suppliers on the sellers22
3.4 The power exerted by the customers in the market22
3.5 The competitive intensity: the rivalry between existing sellers in the market22 4. THE CAPITAL STRUCTURE OF THE BOEING COMPANY25
5. THE FINANCIAL PERFORMANCE OF THE BOEING COMPANY28
5.1 Liquidity Ratios28
5.2 Profitability Ratios30
5.3 Asset Turnover Ratios33
6. STOCK PRICE PERFORMANCE ANALYSIS37
6.1 Linear Regression Analysis and Calculation of Beta37
6.2 The Boeing Company’s Stock Price Performance38
6.3 EADS Stock Price Performance39
6.4 Comparative Analysis40
6.5 Market Value Measures40
7. RISK FACTORS OF THE BOEING COMPANY43
7.2 External Events43
7.4 Financial Risks44
8. OVERALL APPRAISAL AND OUTLOOK46
This corporate analysis provides a financial evaluation of The Boeing Company, in the period from 2006 to 2009. This analysis has been conducted based on a continuous and relevant comparison against its main competitor EADS over the considered period.
The analytical procedures used in this report include financial ratios (long-term solvency ratios, liquidity ratios, profitability ratios, asset turnover ratios and market value measures) and a linear regression analysis. The focus and the purpose of those computations were to enable us to assess the trend in The Boeing Company’s financial performance over time.
The results of our analysis demonstrate that The Boeing Company can be regarded as a better investment than its main competitor, EADS. Our study illustrates that The Boeing Company has a more robust financial performance than EADS, due to a more efficient use of its short-term assets, a higher average gross profit margin and a higher profit generated from total assets. Furthermore, our results show that The Boeing Company also sells its products faster, collects its credit sales at a higher pace and uses its assets more effectively to generate sales. This analysis also proves that the stock of The Boeing Company is slightly riskier than EADS and the average stock within the Aerospace and Defense Industry. Nevertheless, due to an Earnings Per Share higher than EADS over the considered period and a Price-Earnings Ratio above the industry, we have concluded with some degree of certainty that the market has greater expectations (e.g. higher growth opportunities) to The Boeing Company.
This report demonstrates the future prospects of The Boeing Company to be brighter than those of its competitors in both the commercial and the defense segments, due to strong forecasted orders for commercial aircrafts within the next two decades, and an increase in homeland security investments and military expenditures in rapidly growing markets. Nonetheless, our analysis also reviles that the company is still facing significant and probable risks. One of the most significant risks in this regard is the company’s overall management style that has caused labor and supply chain issues for a few years. Those issues have impacted the production and the delivery of the company’s products negatively, and as a result the organization’s financial performance. Other...