Financial Situation of Boeing Co.

Report SEC 10-K: Boeing Co. (NYSE: BA.).
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Report SEC 10-K: Boeing Co. (NYSE: BA.).
Introduction
This paper will used discuss the financial situation of Boeing Co. (NYSE: BA.). as a selected company and is reflected in Fortune 500 list. Boeing is an American multinational company dealing with the manufacture of rockets, satellites, defence systems, military and civil aircraft, just to mention a few. It has an estimated market value is about $ 176 billion (Dias & Teles,2019). Boeing Co. (NYSE: BA.) has experienced a mix of fortunes and challenges that have affected its financial positions in one way or another. According to Denning (2013), some extent of offshoring is a necessary practice in manufacturing sophisticated products such as aeroplanes, but the language and socio-cultural variations and the physical distances in the supply chain account for the extra risk. This paper demonstrates through financial statements how Boeing Co. (NYSE: BA.) has been performing.
Account receivables for the financial year 2020
Accounts receivable (AR) refers to the financial balance resulting from services and goods used, but that has not been paid by the clients. Usually, accounts receivables are classified as current assets on the balance sheet. Thus, account receivables represent money owed by customers for purchases made on credit. The opposite of account receivable is account payable. The debts or money owed to suppliers or other parties are considered account payables. Accounts receivable allow fundamental analysis, which provides an estimation of a company's liquidity and capacity to cover short-term obligations without additional cash flows. The Boeing Co. (NYSE: BA.) accounts receivable (net) stood at 1,955 million U.S dollars with a receivable turnover of 29.75. However, Boeing's accounts payable reduced to about 12928 million U.S dollars in 2020 with a payable turnover of 4.94, as illustrated below:
Payable’s turnover = (Cost of products and services ÷ Accounts payable
= 63,800 ÷ 12,928 = 4.94
The strength of corporations in terms of account receivable can be examined using days sales outstanding or the accounts receivable turnover ratio.
The average receivable collection period is an important concept in account receivable. It reflects an activity ratio that equals days in the period divided by receivables turnover.
For instance, in 2020:
Average receivable collection period = 365 ÷ Receivable’s turnover
= 365 ÷ 29.75 = 12
The average payables payment period is another critical factor that is considered in account payable. It is the average number of days taken by a company to pay all suppliers.
It is an estimate of the average number of days it takes a company to pay its suppliers, equal to the number of days in the period divided by the payable’s turnover ratio for the period.
For instance, in 2020, Boeing account payable:
Average payables payment period = (365 ÷ Payable’s turnover)
= 365 ÷ 4.94 = 74
Inventory
Inventory is an accounting term that refers to resource items that facilitate selling or production. As of 31 December 2021, Boeing had an inventory portfolio worth 81,715 million U.S dollars with an inventory turnover of 0.78. inventory turnover is an activity ratio derived from the cost of goods sold being divided by inventory. Inventory turnover represents how quickly a corporation sells its inventory in a year. Thus, inventory turnover is a metric of overall operational efficiency. The Cost of products and services was 63800 U.S million dollars in 2020 for Boeing Co. (NYSE: BA.).
The Inventory turnover is calculated as below:
Inventory turnover = Cost of products and services ÷ Inventories
= 63,800 ÷ 81,715 = 0.78
Boeing Co. (NYSE: BA.). Income Statement
The income statement represents data on the financial results of a corporations over a specific period. It reflects the amount of revenue that is generated in a specified period and also depicts the cost incurred while generating such revenue.
Boeing Co. (NYSE: BA.) had the following summarized income statement in the 2020 and 2019 financial years.

2020

2019

Revenues

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