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ACC 205 Week 5 Final Paper Boeing

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Accounting

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Running Head: ACC 205 Week 5 Final Paper
ACC 205 Week 5 Final Paper
Boeing

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Running Head: ACC 205 Week 5 Final Paper
Boeing Financial Analysis
Boeing
Boeing (stock symbol BA) is the world's largest aerospace company and
leading manufacturer of commercial jetliners and defense, space and
security systems (Morningstar 2013). I will be looking at whether or not
this companies stock should be a bought or sold, with analysis of the
Liquidity, Profitability, and Solvency of the company over a three year
period 2009-2011. The company’s principle clients are the U.S.
government and commercial airlines. Unlike Lockheed, one of its largest
and closest competitors, Boeing is not as dependent on government
spending. With the 1997 merger of Boeing and McDonnell Douglas, the
company further enhanced its presence in the commercial aviation
arena. Today, Boeing has nearly 12,000 commercial jetliners in service
worldwide, which is roughly 75 percent of the world fleet. The company
has more than 170,000 employees worldwide and reported revenues of
nearly $69 billion in 2011 (Boeing Website 2013).
Financially, the company is divided into two main segments:
* Commercial Jetliners
* Defense, space and security systems
LIQUIDITY
Demand in the airline industry is driven by the government’s military
spending and the overall global economic climate, which affects airline
traffic and demand for new commercial aircrafts. Despite uncertainties,
Boeing finished 2011 with record revenues of $68.7 billion and net
earnings equaled an all-time high at more than $4 billion.
Boeing’s profitability depends on technical expertise and the ability to
accurately price long-term contracts. Revenues are generally higher in
the second half of the year after the new federal budget is approved.
Cash flow and overall liquidity has not been an issue as contracts are

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