...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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...Section 404 of the Sarbanes-Oxley Act: Curse or Blessing for Financial Reporting? Yuliya M. Ford University of Maryland University College Introduction In response to public concerns regarding the accuracy and quality of reported financial information by publicly traded companies, in mid-summer of 2002 Congress passed Public Law 107-204, 116 Stat.745 which is commonly referred to as the Sarbanes Oxley Act (SOX or the Act). The law was passed in large part due to the public outcry of the numerous unethical accounting scandals and fraudulent reports from such notable companies as - Enron, WorldCom, and Global Crossing (Singer and You, 2011). The goal of SOX was to mandate corporate governance reforms in order to help to instill investor’s confidence in capital markets. In an effort to establish best practices and standards SOX created the Public Company Accounting Oversight Board (PCAOB). The PCAOB is chartered with the establishment of independent standards and overseeing the compliance of publicly traded companies with these standards (Agami, 2006). Another very important aspect that the PCAOB is charged with is reviewing the samples of audits conducted by accounting firms and ensuring that both the spirit and letter of the SOX act was established under (Parles, O’Sullivan, & Shannon, 2007). The Sarbanes-Oxley Act is divided into eleven sections referred to as titles. In terms of compliance, many have posited, including Addison-Hewitt Associates (2003), that the most...
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...Section 404 of the Sarbanes-Oxley Act: Curse or Blessing for Financial Reporting? Yuliya M. Ford University of Maryland University College Introduction In response to public concerns regarding the accuracy and quality of reported financial information by publicly traded companies, in mid-summer of 2002 Congress passed Public Law 107-204, 116 Stat.745 which is commonly referred to as the Sarbanes Oxley Act (SOX or the Act). The law was passed in large part due to the public outcry of the numerous unethical accounting scandals and fraudulent reports from such notable companies as - Enron, WorldCom, and Global Crossing (Singer and You, 2011). The goal of SOX was to mandate corporate governance reforms in order to help to instill investor’s confidence in capital markets. In an effort to establish best practices and standards SOX created the Public Company Accounting Oversight Board (PCAOB). The PCAOB is chartered with the establishment of independent standards and overseeing the compliance of publicly traded companies with these standards (Agami, 2006). Another very important aspect that the PCAOB is charged with is reviewing the samples of audits conducted by accounting firms and ensuring that both the spirit and letter of the SOX act was established under (Parles, O’Sullivan, & Shannon, 2007). The Sarbanes-Oxley Act is divided into eleven sections referred to as titles. In terms of compliance, many have posited, including Addison-Hewitt Associates (2003), that the most...
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...FIN 6406 A Financial Ratio 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...
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...The Boeing Company 2010 Annual Report At Boeing, we aspire to be the strongest, best and best-integrated aerospace-based company in the world — for today and tomorrow. The Boeing Company Boeing is the world’s largest aerospace company and leading manufacturer of commercial airplanes and defense, space and security systems. A top U.S. exporter, the company supports airlines and U.S. and allied government customers in more than 90 countries. Our products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performance-based logistics and training. With corporate offices in Chicago, Boeing employs more than 160,000 people across the United States and in 70 countries. Our leadership is strengthened further by hundreds of thousands of people who work for Boeing suppliers worldwide. Contents Operational Summary Message From Our Chairman The Executive Council Financial Results Form 10-K Selected Programs, Products and Services Shareholder Information Board of Directors Company Officers 1 2 7 8 9 134 141 142 142 Cover photo: 787 Dreamliner in flight test Photo above: F/A-18E/F Super Hornet strength Operational Summary Q Earned net income of $3.3 billion, or $4.46 per share, compared with $1.3 billion, or $1.87 per share, in 2009. Q Delivered 115 production military aircraft, two launch vehicles and four satellites, and increased backlog...
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...Components of internal control Inexact or approximate measures Standards for the preparation of accounting information FASB conceptual framework PCAOB COSO Professional certifications in accounting AICPA code of professional conduct Personal benefits of accounting skills Skills Analysis Analysis Analysis, judgment Analysis Analysis Analysis, research Analysis, ethics Analysis Analysis, ethics Analysis Exercises 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 Topic You as a user of accounting information Real World: Boeing Company, California Public Employees Retirement System, China Airlines Users of accounting information What is financial reporting? Generally accepted accounting principles Accounting organizations Investment return Accounting terminology Accounting organizations Financial and management accounting Management accounting information Accounting organizations Purpose of an audit Audits of financial statements Ethics and professional judgment Careers in accounting Home Depot, Inc. general information Learning Objectives Skills 1 Analysis, judgment 3, 4 Analysis, research 3 6 6 3 3-5, 7 6 3, 4 4 6 5 5 7 8 1, 3, 5 Analysis, judgment Analysis Analysis, communication Analysis Analysis Analysis Judgment Communication, judgment Analysis, judgment Analysis, judgment Analysis Analysis, communication, judgment Judgment, communication Analysis, judgment, research © The McGraw-Hill Companies, Inc., 2012 Overview Due to the introductory...
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...Components of internal control Inexact or approximate measures Standards for the preparation of accounting information FASB conceptual framework PCAOB COSO Professional certifications in accounting AICPA code of professional conduct Personal benefits of accounting skills Skills Analysis Analysis Analysis, judgment Analysis Analysis Analysis, research Analysis, ethics Analysis Analysis, ethics Analysis Exercises 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 Topic You as a user of accounting information Real World: Boeing Company, California Public Employees Retirement System, China Airlines Users of accounting information What is financial reporting? Generally accepted accounting principles Accounting organizations Investment return Accounting terminology Accounting organizations Financial and management accounting Management accounting information Accounting organizations Purpose of an audit Audits of financial statements Ethics and professional judgment Careers in accounting Home Depot, Inc. general information Learning Objectives Skills 1 Analysis, judgment 3, 4 Analysis, research 3 6 6 3 3-5, 7 6 3, 4 4 6 5 5 7 8 1, 3, 5 Analysis, judgment Analysis Analysis, communication Analysis Analysis Analysis Judgment Communication, judgment Analysis, judgment Analysis, judgment Analysis Analysis, communication, judgment Judgment, communication Analysis, judgment, research © The McGraw-Hill Companies, Inc., 2010 Overview Due to the introductory...
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...Colorado Technical University | Principles of Business | Financial Environment | | Mary | 12/9/2012 | This is a topic about an airline that has the lowest cost for transportation in the world. It has been in business for over forty years. It is a commercial airline that services thirty nine cities. The company Head Quarters is in Dallas, Texas. They recently merged with Air Tran Airways and are now working under one name. | Identify the investor’s relations link and review the company’s investor relation information. The investor relation is dedicated to the three P’s. Performance, People, and the Planet Southwest (LUV) is the symbol that was chose to represent its home base of Dallas Love Field its employees and customer relations. It is known for its excellent customer service. Southwest Airlines has endured thirty-nine years of profits. It made over 400 million in free cash Flow which means a company is able to its debt. On May 2nd, 2011 Southwest finished its purchase on all the stock of Air Tran Holdings. There are forty- one years of service and they still can be differinate from other low cost carriers. Provide a financial summary of your selected company’s financial health. Southwest airlines received a B+ by the (GRI) Global Reporting Imitative which is a standard grading of company sustainability. December 31, 2011 the company operated 698 aircrafts, 610 was Boeing 737 and 88 Boeing 717 and serve 39 states and 72 cities. It is a passenger...
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...American Corporate Analysis ~ Boeing Co. Sheryl Stryker, Ruthie Williams, Kareem Campbell, Tamara Loken, Evelina Delgado ACC/561 December 09, 2014 Dr. Deborah Adkins Introduction Boeing was founded in 1916 in Washington State. They are the world’s largest aerospace company and leading manufacturer of commercial jetliners, a top U.S. exporter, which services customers in 150 countries, employs more than 169,000 people across the U.S. In addition to providing there services they represent one of the most diverse and talented workforces in the world. The journey of Boeing’s history includes many strategic mergers and acquisitions to become prevalent. Boeing continues to introduce these practices in order to drive the financial results and withstand the competition. In order to conduct a comparative analysis for Boeing, and to measure its profitability and liquidity, a vertical and horizontal analysis along with financial ratios will be calculated explaining and interpreting the past two reporting years with comparison to Airbus. Horizontal Analysis A comparative analysis involves analyzing financial statements that utilize comparative and basic tools. Intercompany and intracompany horizontal analysis will be performed on both companies. In addition, an evaluation of Airbus and Boeing’s balance sheet and income sheets data for fiscal years 2012 and 2013 will be reviewed using a horizontal analysis. For instance, by using 2012 as the base...
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...another avenue the airline companies have. Boeing benefits use of industrial research to provide a safe and effective service for their customers. The purpose of research and development, is to raise profits, it also allows an effective service for their customers. These factors became recognized in explaining Boeing success as one of the words top airline company. Which Boeing makes state of the art airlines. Business owners and managers are part of an private citizens, which they may assume responsibility for other problems in society, such as the CEO of Boeing has leadership for a national drive to raise money for medical research for leukemia to cure children. The distinction between the public responsibility of business and the responsibility of the individuals who own and work in businesses and are an important one. However, coming from a social responsibility, a member of the organization could reflect on the entire organization itself, even if it was done outside the company’s. Boeing has an extensive ethics policy that is developed to protect the corporation and its employees. All employees are required to obey all information in the Boeing Code of Conduct when they are hired. Boeing has a hotline set up so that employees can ask questions or report suspected violations of policy. The Finance department has additional policies they must go by since the company wants accurate reporting of all records. Boeing has always try to stay committed excellence...
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...5930 Labor Relations Boeing/ NLRB Review Summary of the Issues Boeing Company is an international corporation engaged in developing and producing military and commercial aircraft. Boeing has a collective bargaining relationship with the International Association of Machinist and Aerospace Workers (IAM). Historically The Pugent Sound employees performed the final assembly of all Boeing planes. In late 2003, Boeing announced that it would place the assembly line for its new 787 “Dreamliner” airplane in Washington. The line opened in May 2007. However Boeing departed from its previous practice of manufacturing most of the aircraft parts with its own employees and instead outsourced parts production to other suppliers which included Vought Aircraft Industries in North Charleston SC. In mid 2008, the media began reporting that Boeing would need to add a second 787 assembly line because of its growing and backlog. At about the same time, Boeing entered negotiations with the Union for a collective-bargaining agreement. During the negotiations, Company officials noted the need for a second assembly line but did not discuss details. Due to not being able to reach an agreement there was a 57 day strike that ended November 1st 2008. In early 2009 the media again began publishing that Boeing needed a second assembly line. Talks began between the Union and Company on how to avoid future strikes and better communication. In July of 2009 Boeing purchased the Vought plant...
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...program in March. We opened three new cities: Greenville-Spartanburg, South Carolina; Charleston, South Carolina; and Newark, New Jersey. We closed our acquisition of AirTran Airways on May 2, growing our fleet by 140 aircraft, and extending our route network domestically and to the Caribbean and Mexico. In December, we unveiled our fleet modernization plans, which include an agreement with Boeing to serve as the launch customer of the 737 MAX aircraft. And, our operations improved in 2011, closing out the year with our highest December ontime performance in 15 years. Moreover, we reported our 39th consecutive annual profit in a year that endured a $1.7 billion year-over-year increase in combined economic fuel costs. Our 2011 net income was $178 million, or $.23 per diluted share, including special items (primarily noncash, mark-to-market, and other items required for a portion of the Company’s fuel hedge portfolio, as well as costs associated with the acquisition and integration of AirTran). Excluding special items, our 2011 profit was $330 million, or $.43 per diluted share. Our financial position remains strong. Our cash and short-term investments were $3.1 billion, as of December 31, 2011, in addition to a fully-available $800 million bank line-of-credit. Net cash provided by operations for 2011 was $1.4 billion, and capital expenditures were $968 million, generating more than $400 million in free cash flow. During 2011, we repurchased approximately 27.5 million shares of common...
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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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...because they have something to say. Fools speak because they must say something." Don't predict the future, invent it. Davies, Tony & Crawford, Ian 2012, ‘Financial Accounting”, Pearson, Harlow. Pg 7 Prudence Concept Prudence means being careful or cautious. The prudence concept is an ethical concept that is based on the principle that revenue and profits are not anticipated, but are included in the income statement only when realized in the form of cash or other assets, the ultimate cash realization of which can be assessed with reasonable certainty. Provision must be made for all known liabilities and expenses, whether the amount of these is known with certainty or is a best estimate in the light of information available, and for losses arising from specific commitments rather than just guesses. Therefore, companies should record all losses as soon as they are known, but should record profits only when they have actually been achieved in cash or other assets. Consistency concept The consistency concept is an ethical rule that is based on the principle that there is uniformity of accounting treatment of like items within each accounting period and from one period to the next. However, as we will see in Chapter 3, judgement may be exercised as to the application of accounting rules to the preparation of financial statements. For example, a company may choose from a variety of methods to calculate the depreciation of its machinery and equipment, or how to value its inventories...
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...ANNUAL REPORT TO SHAREHOLDERS To our Shareholders: Our goals for 2013 were ambitious. We wanted to stay on track with our five Strategic Initiatives described below. We wanted to maintain our strong Brand, unique Culture, and award-winning Customer Service. We wanted to sustain our strong ontime performance and baggage handling. Finally, we wanted to improve our cost performance, achieve our profit requirement, and return value to our Shareholders. Just like in 2011 and 2012, an enormous amount was accomplished in 2013. As a result, we produced stellar results. Our 2013 net income was a record $754 million, or $1.05 per diluted share, including special items (primarily noncash, mark-to-market, and other items required for a portion of the Company’s fuel hedge portfolio, as well as costs associated with the acquisition and integration of AirTran). Excluding special items1, our 2013 profits were also a record, increasing 93 percent year-over-year to $805 million, or $1.12 per diluted share. Our annual pre-tax return on invested capital, excluding special items (ROIC), was 13.1 percent, nearly doubling 2012’s performance. Total operating revenues were a record $17.7 billion, boosted by strong yields and an 80.1 percent load factor. Through the combination of stable fuel prices and rigorous cost control efforts, we met our goal to improve our cost performance. Despite a roller coaster economy, we achieved record earnings; and, while just short of our 15 percent ROIC target, we produced...
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