...Evolution of Project Boeing 7E7 Empirical Data 7E7 Project NPV –DCF Analysis WACC Calculation Payback Period Stock Options @ Risk Analysis Conclusion References Page 1 4 5 7 11 12 22 23 24 Table of Tables Table Number Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Content DCF Analysis Variables Regression Analysis WACC Calculations Payback Period Depreciation Call Option - NYSE Call Option - S&P 500 Put Option - NYSE Put Option - S&P 500 Sell A Call - NYSE Sell A Call - S&P 500 Sell A Put - NYSE Sell A Put - S&P 500 Covered Call - NYSE Covered Call - S&P 500 Protective Put - NYSE Protective Put - S&P 500 Protective Collar - NYSE Protective Collar - S&P 500 Long Straddle - NYSE Long Straddle - S&P 500 Short Straddle - NYSE Short Straddle - S&P 500 Table of Exhibits List of exhibits Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Exhibit I Exhibit J Exhibit K Exhibit L Exhibit M Exhibit N Exhibit O @ RISK Sensitivity analysis Change in Stock Price - NYSE Payback Period - NYSE Change in Stock Price – S&P 500 Payback...
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...Business Case Analysis Wael M. Zaoud MGT 521 May 28, 2012 Clance Doelling MBA, BSME Business Case Analysis Executive Summary The third week assignment examines The Boeing Company (BA) strategic initiatives taken in relative to the organization and operation adaptation to the developing competitive environment. Boeing operates as a global company and facing tough competition recently from Airbus, Lockheed Martin, EADS, Northrop Grumman, etc. Politics, finance, economy, and resources (to name a few) impact the global market in which Boeing operates. As a result, Boeing needs to constantly evaluate its global strategy and the tactics it uses to capture the market and maintain growth. Economic Trends Recent global events, including regional political turmoil, natural disasters, and debt crises, have affected global economic growth. While global growth is expected to recover, the risk of persistent high oil prices and debt contagion could have lasting effects on the economy (The Boeing Company, n.d.). Economic growth also could be affected by slowing trade liberalization in some regions. Reduced liberalization could prolong the recovery period, affecting the demand for air travel and new airplanes. Though recent data indicates that the global economy continues to recover, the pace of the recovery in 2011 has moderated compared to 2010. High oil prices, natural disasters (Japan earthquake) and resulting consequences in a politically unrest Middle East area pose as primary...
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...THE BOEING COMPANY AND LOCKHEED MARTIN Keith L. Hohl EMGT 452 Semester Project 14 December 1999 Table of Contents 1. Introduction/Study Objective 2. Boeing Financial Statement and Analysis 2.1. Background and Product Lines 2.2. Consolidated Balance and Income Statements 2.3. Divisional Financial Statements 2.4. Ratio and Trend Analysis 3. Lockheed Martin Financial Statement and Analysis 3.1. Background and Product Lines 3.2. Consolidated Balance and Income Statements 3.3. Divisional Financial Statements 3.4. Ratio and Trend Analysis 4. Financial Comparison between the Two Companies 4.1. Consolidated Comparisons 4.2. Military Aircraft and Space Divisions Comparisons 5. Summary/Conclusions 6. Bibliography 7. List of Tables 8. List of Figures List of Tables T-1: Consolidated Financial Balance Sheet-The Boeing Company T-2: Consolidated Income Statement-The Boeing Company T-3: Divisional Financial Summary-The Boeing Company T-4: Consolidated Financial Ratio Analysis-The Boeing Company T-5: Consolidated Financial Balance Sheet-Lockheed Martin T-6: Consolidated Income Statement- Lockheed Martin T-7: Divisional Financial Summary- Lockheed Martin T-8: Consolidated Financial Ratio Analysis- Lockheed Martin List of Figures F-1: Total Assets Divisional Trend Analysis-The Boeing Company F-2: Sales Divisional Trend Analysis-The Boeing Company F-3: Net Earnings Divisional Trend Analysis-The...
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...Introduction The goal of the study is to provide overall financial statement overview of The Boeing Company using the knowledge obtained during the Financial Management course. The main question of the study is how financially well the company is at the moment and what investment expectation it generates on the market nowdays. The Boeing Company background The company was originally founded by William Boeing on July 15, 1916, as "The Pacific Aero Products Company". Two years later it was renamed into “The Boeing Company”, on May 9, 1917. Since that date the company grew and acquired a lot of its competitors, including the McDonnell Douglas in 1997. [pic] The Boeing’s structure consists of two main divisions and two supporting divisions: - Boeing’s Commercial Airlines (BCA) - Boeing Defense Space & Security (BDS), which in turn consists of: o Boeing Military Aircraft o Network & Space Systems o Global Services & Support - Boeing Capital Corporation (BCC) - Other segments (including own Fire department and other non-profile activities) [pic] The Boeing Company’s Commercial Airliners division took the leading market positions up to 2003. Financial Ratios Analysis Liquidity Boeing’s liquidity ratios increased in 2010 and 2009 in comparison to 2008 values, but current and acid-test ratios are still below the industry average. Reasons: - the amount of money and short-term investments...
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...Quarterly Trend Analysis of: The Boeing Company BA Listed on New York Stock Exchange Prepared for: Dr. Deanne Butchey Corporate MBA Program Florida International University By: Justin Papcun Computations Financial Trend Comparison Liquidity: The Boeing Company financial data shows that the company is in place to settle up its obligations in the short term business strategy. As it appears right now, 1.20 is the current ratio and the company’s assets offset its liabilities by 1:2. The quick ratio of 0.37 is lower than the current ratio due to the variance from competition forming from the industry average. The current ratio posted a value of 1 or above consistently, but the same cannot be said for the quick ratio which posted below the value one for Q1-Q4. This decline comes from a recession, a decrease in airline traffic, and the instability of fuel cost. Despite this the current ratio was able to increase value while the quick ratio decreased while still posting a positive number. This was due to an inventory and production decrease. In current liabilities to inventory sector, the numbers did not suffer. In Q1-Q4 Boeing did not post a value below 1, varying between 1.13-1.21. The cash ratio saw numbers between 0.13 and 0.14 for Q1-Q3, and increasing to a 0.21 for Q4. Assets Utilization: This asset ratio shows Boeing is competently generate profitable sales revenues by properly using investments. Looking at the ratio turnover, you can see the company posted a...
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...Economics 550 Hassan Ahmed Assignment 4: Analysis of Current Macroeconomic Situations Professor J.Kessio December 7, 2011 Analysis of Boeing and Bombardier according to their Stock performance, current and future sales revenue, current and future profits, and labor costs and hiring decisions. I. Introduction In December 2007 the united state of America entered a recession and 1.2 million employees lost their jobs by the end of first 10 months of 2008, many businesses start going out of the market leaving many people without jobs relying on the unemployment compensation. The impact of the recession wasn’t just on U.S economy but it was spread all over the world due the heavy financial relationships and exchange with the potential markets all across the world. The monopolist firms had effected also but not as much as the other firms did but they also faced a hard times. 1.1 The Current Economic Conditions The current economic conditions are picking up due to the fall in unemployment rate by 0.4 percentage point to 8.6% in November 2011 comparing with 9.3% in 2009 and 9.6% in 2010, also the interest rate currently is 0.75%. The GDP growth was -6.8% by the beginning of 2009 and 5% by the beginning of 2010 and 3.1% by the beginning of 2011, overall the economy performance is going in positive direction that will increase consumer and businesses confidence. 1.2 The Firm The firms chosen to be analyze are Boeing and Bombardier because they hold many...
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...Boeing 777 Project Group Report Winter 2013 Group Number: 3 Participating Group Members: Chris Cardillo Jingshu Dang Shanlin Li Xun Yin Yigong Zhu Boeing 777 In October 1990, the Boeing Company announced that it was launching a new aircraft model, the 777. The company praised the superior technology of the product and the fact that it filled a gap in Boeing’s product line. Moreover, it was targeted to service routes in a critical high growth market segment. The chief objective of the analysis is to evaluate the 777 against a financial standard. The case gives internal rates of return (IRRs) for the 777 project base case and alternative forecasts. The principal analytical problem of the case is an estimation of a weighted average cost of capital (WACC) for Boeing’s commercial aircraft division in order to evaluate these IRRs. The analysis should also identify ‘key value drivers’ and distinguish, on a qualitative basis, the key gambles Boeing is making. Capital budgeting projects should promote the primary goal of the firm; therefore, the primary goal directs decision making. Frank Shrontz, Boeing’s CEO, says his mission is raising Boeing’s return on equity from the recent average of about 12 percent. Is the primary goal of Boeing improving return on equity? 1. Frank Shrontz says he wants to improve Boeing’s return on equity. How might the 777 project serve that mission? Is improving return on equity the same as maximizing shareholders’...
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...Boeing 7E7 Case Study Solution BACKGROUND As the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security system, Boeing puts a lot of efforts and innovations in its products and services. These include commercial and military aircraft, satellites, weapons, electronic information and communication systems, and performance-based logistics and training. Due to customers’ needs and requests, Boeing has expanded its product line and services. The long tradition of aerospace leadership and innovation has given the company the advantages. Its broad range of capabilities includes creating new and more efficient commercial airplane, integrating military platforms and defense systems through network-enabled solutions; and arranging innovative customer-financing options. Nowadays, Boeing, as the top exporter of U.S. and with its corporate offices in Chicago, supports airlines and U.S. and allied government customers in more than 90 countries. Besides, Boeing employs more than 159,000 people across United States and in 70 countries. In between, more than 123,000 of its employees hold college degrees, including nearly 32,000 advanced degrees, which means in virtually every business and technical field from approximately 2,700 colleges and universities worldwide. By the way, we can see how diversified, talented and innovated the workforces of Boeing company. Basically, Boeing is diversified into...
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...| | | | ------------------------------------------------- Dynamics of Strategy * Evaluation of external business environment of Boeing * A critical assessment of the strategic resource capability (strategic fit) * Provide detailed recommendations after assessment of the feasibility, acceptability and suitability of Boeing * A detailed implementation plan NOTE: SEE APPENDICES FOR DETAILED ANALYSISFor Assignment or Dissertation Help, Please Contact: | Muhammad Sajid Saeed+44 141 4161015Email: tosajidsaeed@hotmail.comSkype ID: tosajidsaeed | | TABLE OF CONTENTS 1. INTRODUCTION------------------------------------------------------------------------------------- 03 2. VISION, MISSION, GOALS, AND OBJECTIVES ----------------------------------------------- 03 3. STRATEGIC ANALYSIS ----------------------------------------------------------------------------- 04 3.1 INTERNAL ANALYSIS -------------------------------------------------------------------- 04 3.1.1 RESOURCE-BASED VIEW ---------------------------------------------------- 04 3.1.2 VALUE CHAIN ANALYSIS ----------------------------------------------------- 06 3.1.3 FINANCIAL ANALYSIS --------------------------------------------------------- 07 3.2 EXTERNAL ANALYSIS -------------------------------------------------------------------- 08 3.2.1 PEST ANALYSIS ---------------------------------------------------------------- 08 3.2.2 PORTER’S FIVE FORCES ------------------------------------------------------...
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...LONDON SCHOOL OF COMMERCE COLOMBO CAMPUS SRI LANKA MBA FOR EXECUTIVES Module Name: Financial Analysis and Management Student Name: Anuradha S. Illeperumaarachchi Module Lecturer: Mr. William Parrott Module Tutor: Mr. S. Skandakumar Date Submitted: 10/07/14 Total Word Count: 4193 Table of Contents 1.0 Introduction to the Report 3 2.0 Introduction to Airbus 3 3.0 Introduction to Boeing 5 4.0 Analysis of Financial Management 6 5.0 A comparative analysis of Airbus and Boeing 7 5.1 Airbus Group 7 5.2 Boeing 11 6.0 Examination of Key Stakeholders and Information Disclosure 14 6.1 Customers 15 6.2 Suppliers 16 6.3 Employees 16 6.4 Shareholders 17 7.0 Way Forward 18 8.0 References & Bibliography 19 1.0 Introduction to the Report This Consultant’s report has been compiled based on information gathered from the annual reports and financial statements of The Boeing Company and the Airbus Group (formerly EADS) for the year 2012. While analyzing the level of disclosure of both companies, this report aims to shed light on industry standards and critically examine whether the needs of key stakeholder groups have been sufficiently addressed in the chosen annual reports. Further suggestions for the improvement of these reports are also made in order to...
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...Case The Boeing 777: A Financial Analysis of New Product Launch [pic] Eduardo Lioy Keya Williams Ritwik Malvi Jonas Angeles Alexis Heideck 1. Introduction/ Case Summary: The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability...
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...The Boeing 777: A Financial Analysis of New Product Launch [pic] Eduardo Lioy Keya Williams Ritwik Malvi Jonas Angeles Alexis Heideck 1. Introduction/ Case Summary: The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability along...
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...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...
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...Q1 Explain the importance of compensation management and detail how organization handle its complexities? Ans1 Compensation and reward system plays vital role in a business organization.since, among four Ms, i.e. men, material, machine and money, men has been most important factor, it is impossible to imagine a business process without men. Every factor contributes to the process without men. Every factor contributes to the process of production/business. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur expects profits. Similarly the labourexpects wages from the process. Labor plays vital role in bringing about the process of production /business in motion. The other factors being human, has expectations, emotions, ambitions and egos. Labor therefore expects to have fair share in the business/production process. Therefore a fair compensation system is a must for every business organization. The fair compensation system will help in the following: 1) An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed. 2) It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable. 3) Such a system should be well defined and uniform...
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...document: sensitivity analysis around the WACC values and consideration of other Economic Factors. It did not quite all come together perfectly at the end. See the detailed comments that I have made in the RHS margin. The Boeing 7E7 Team 14 Constantine Brocoum Courtney Delia Stephanie Doherty David Dubois Radu Oprea October 15th, 2009 Contents Objectives 1 Management Summary 1 Cost of Equity 1 Equity Market Risk Premium 1 Beta 2 Risk Free Rate 2 Capital Structure Weights 2 Boeing 7E7 Project Evaluation 4 Circumstances for an economically attractive project 4 Market Demand 4 Market Share 4 Sensitivity Analysis 4 Conclusion 7 Board approval for the project? 7 Appendices 7 Appendix A 7 Objectives This report seeks to answer the following three questions about the Boeing 7E7 project: 1. What is an appropriate required rate of return against which to evaluate the prospective IRRs from the Boeing 7E7? a. Please use the capital asset pricing model to estimate the cost of equity. b. Which equity market risk premium (EMRP) did you use? Why? c. What Beta did you use and how did you derive it? d. Which risk-free rate did you use? Why? e. Which capital-structure weights did you use? Why? 2. Judged against your WACC, how attractive is the Boeing 7E7 project? ...
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