Using the ratio definitions from Exhibit 4.6, calculate the financial ratios for the Boeing Company and determine whether the company is a good investment. Assume an effective tax rate of 20 percent Analyzing Financial Statements. Presented below are selected financial data from the 2018 annual reportof The Boeing Company:P4.27TA 2(amounts in millions)20182017Balance sheetCash and cash equivalents..Marketable securitiesAccounts receivable (net).Inventory..Total current assets..Total assets..Current portion of long-term debtTotal current liabilitiesLong-term debt.Shareholders' equity$ 7,63792713,90462,56787,830117,3592,69081,5908,501410$ 88131,17911,08861,38885,194112,36243574,4688,0211,713Income statementNet sales..Cost of goods soldInterest expense.Net income before taxes.Net income$101,12781,421475$ 94,00576,54236011,60410,46010,1078,458RequiredUsing the ratio definitions from Exhibit 4.6, calculate the financial ratios for The Boeing Company and deter-mine whether the company is a good investment. Assume an effective tax rate of 20 percent. loge BusiPercentage of total assets held as highly lqutRate of return generated on s companysnwNumber of production/sales cydles peteroNumber of sales/collection cycles experencetNumber of days required, on average, to colesales after subtracting all expenses. Oten tPercentage of income generated from sChapter 4I Using Financial Statements for lnvesling ndEXHIBIT 4.6Key Financial RatiosRatioDefinitionExplanationProfitability• Retum on shareholdersequity (ROE)Bate of return generated by a busineCemNet income-Prefened stock dividendsShareholders equityshareholders.EXNet income [interest expense (1- Tax rate)]Total assets• Return on assets (ROA)assets from all sourcesRatProGraFletRetPercentage of net income remaining• Retum on sales (ROS)Net incomeNet salesreferred to as "net profit margin(Net sales-Cost of goods sold)Net sales• Gross profit margin ratiodeducting the cost of goods soldRetReAsset Management• Receivable turnoverAReNet salesfirm.ReAccounts receivable365Receivable collectionperiodoutstanding account receivable(Net sales/Accounts receivable)Cost of goods soldInventory• Inventory tumoverfirm.• Inventory-on-handperiodNumber of days, on average, required to sInventory currently on hand365(Cost of goods sold/Inventory)Amount of sales generated from each doler• Asset turnoverNet salesin assets.Total assetsLiquidity• Cash and marketablesecurities to total assets(Cash+Marketable securities)Total assetsAmount of liquid assets available to pay shonliabilities.• Quick ratio(Cash Marketable securities Accounts receivable)Current liabilitiesAmount of current assets available to seniceliabilities.• Current ratioCurrent assetsCurrent liabilities• Accounts payableCost of goods soldAccounts payableNumber of accocunt payment cycles experiecturnoverfirm.• Days' payable periodNumber of days, on average, required to payoutstancling account payable.365Cost of goods sold/Accounts payableSolvency and CapitalStructure• Financial leverageTotal assetsRelative size of total assets to total sharehoioesequity.Shareholders' equityPercentage of total assets provided by longncreditors.• Long-term debt to total(Long-term debt + Current portion of long-term debt)assetsTotal assets• Long-term debt toshareholders' equity(Long-term debt+Current portion of long-term debt)Shareholders' equityRelative investment of long-term creditos venashareholders in a business.Extent to which current operating income covcurrent debt service charges.• Interest coverage ratioNet income before taxes+Interest expenseInterest expense

Ratio analysis is a technique through which an investor is able to analyze the company's financial…

P4.27 Analyzing Financial Statements. Presented below are selected financial data from the 2018 annual report of The Boeing Company: (amounts in millions) 2018 2017 Balance sheet Cash and cash equivalents. Marketable securities Accounts receivable (net) Inventory.. Total current assets. Total assets. Current portion of long-term debt Total current liabilities Long-term debt. Shareholders' equity. $ 8,813 1,179 11,088 61,388 85,194 112,362 435 74,468 8,021 1,713 $ 7,637 927 13,904 62,567 87,830 117,359 2,690 81,590 8,501 410 ... Income statement Net sales.. Cost of goods sold Interest expense. Net income before taxes. Net income $ 94,005 76,542 360 10,107 8,458 $101,127 81,421 475 11,604 10,460 Required Using the ratio definitions from Exhibit 4.6, calculate the financial ratios for The Boeing Company and deter- Assume an effective tax rate of 20 percent.

P4.27 Analyzing Financial Statements. Presented below are selected financial data from the 2018 annual report of The Boeing Company: (amounts in millions) 2018 2017 Balance sheet Cash and cash equivalents. Marketable securities Accounts receivable (net) Inventory.. Total current assets. Total assets. Current portion of long-term debt Total current liabilities Long-term debt. Shareholders' equity. $ 8,813 1,179 11,088 61,388 85,194 112,362 435 74,468 8,021 1,713 $ 7,637 927 13,904 62,567 87,830 117,359 2,690 81,590 8,501 410 ... Income statement Net sales.. Cost of goods sold Interest expense. Net income before taxes. Net income $ 94,005 76,542 360 10,107 8,458 $101,127 81,421 475 11,604 10,460 Required Using the ratio definitions from Exhibit 4.6, calculate the financial ratios for The Boeing Company and deter- Assume an effective tax rate of 20 percent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

3. Based on Gideon’s required rate of return of 8%, what was the property/casualtydivision’s residual income for 2019?
Barton Industries has operating income for the year of $3,600,000 and a 25% tax rate. Its total invested capital is $18,000,000 and its after-tax percentage cost of capital is 8%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary. $
(Calculating corporate income tax) G. R. Edwin Inc. had sales of $6 million during the past year. The cost of goods sold amounted to $3 million. Operating expenses totaled $2.6 million, and interest expense was $30,000. Determine the firm's tax li- ability. What are the firm's average and marginal tax rates?
(Corporate income tax) G. R Edwin Inc had sales of $6.01 million during the past year. The cost of goods sold amounted to $2.7 million. Operating expenses totaled $2.47 million, and interest expense was $29,000. Use the corporate tax rates shown in the popup window, to determine the firm's tax liability. What are the firm's average and marginal tax rates? The firm's tax liability for the year is S (Round to the nearest dollar) The firm's average tax rate is % (Round to two decimal places) The firm's marginal tax rate is % (Round to the nearest integer.) Data table Taxable Income $0- $50,000 $50,001 - $75,000 $75,001 - $100,000 $100,001 - $335,000 Marginal Tax Rate 15% 25% 34% 39% $335,001-$10,000,000 $10,000,001-$15,000,000 35% $15,000,001-$18,333,333 38% Over $18,333,333 34% 35% (Cick on the icon in order fo copy its contents into a spreadsheel) Print Done
Subject Finance
Barton Industries has operating income for the year of $3,500,000 and a 25% tax rate. Its total invested capital is $20,000,000 and its after-tax percentage cost of capital is 7%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary. $
For fiscal year 2021, Costco Wholesale Corporation ( COST) had a net profit margin of 2.60%, asset turnover of 3.24, and a book equity multiplier of 3.28. a. Use this data to compute Costco's ROE using the DuPont Identity. b. If Costco's managers wanted to increase its ROE by 1.10 percentage points, how much higher would their new asset turnover need to be? c. If Costco's net profit margin fell by 1.10 percentage points, by how much would their asset turnover need to increase to maintain their ROE? a. Use this data to compute Costco's ROE using the DuPont Identity. Costco's ROE is %. (Round to two decimal places.) If Costco's net profit margin fell by 1.05 percentage points, by how much would their asset turnover need to increase to maintain their ROE?
MPI Incorporated has $4 billion in assets, and its tax rate is 35%. Its basic earning power (BEP) ratio is 12%, and its return on assets (ROA) is 3%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet What is MPI's times-interest-earned (TIE) ratio? Round your answer to two decimal places.
Data for the wholesale products division of ABC Co. are as follows: Earnings before interest and taxes P30,000,000; Depreciation expense P10,000,000; Interest Expense P1,000,000; Change in net working capital P5,000,000; Capital expenditures P4,000,000; Invested capital P50,000,000; Weighted average cost of capital 10%; Tax rate 30%. Considering the impact of income tax, the economic value added by the division must be nearest to P15,300,000 P16,000,000 P16,300,000 P25,000,000 P30,000,000
You're an industry analyst for the telecomm sector, and have been analyzing financial reports from two companies: CellT Corp. and Talk2Me Inc. The corporate tax rate for both firms is 35%. Your associate analyst has calculated and compiled, in the following table, a list of important figures you'll probably need for the analysis: Data Collected CellT Corp. Talk2Me Inc. EBIT $172,500 $122,820 Depreciation $69,000 $49,128 Total operating capital $1,014,300 $791,430 Net investment in operating capital $483,000 $255,300 WACC 8.84% 11.50% In your analysis, you want to look for several characteristics-one of them being the return on invested capital (ROIC). Using the information available, complete the following statements: • The net operating profit after tax (NOPAT) for CellT Corp. is , whereas the NOPAT for Talk2Me Inc. is • CellT Corp. has a free cash flow of , whereas, Talk2Me Inc. has cash flow of • CellT Corp. has a return on invested capital than Talk2Me Inc. has.
Lannister Manufacturing has a target debt-equity ratio of .85. Its cost of equity is 10 percent, and its cost of debt is 7 percent. If the tax rate is 23 percent, what is the company's WACC? (Do not round Intermedlate calculatlons and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC
Use the information below to build a properly formatted income statement. A: The firm has 25,280,000 shares outstanding and its earnings per share is $2.40. Calculate Net Income. B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's operating income is 1.80 times its Net Income. Determine the firm's EBIT. E: Given your answer to D, calculate the firm's Interest Expense. F: After completing the above: Gross Profit is 18.00 times its Interest Expense. Calculate Gross Profit. G: Finally, the firm's Revenue is 1.50 times its EBIT. Calculate the firm's Revenue. INSTRUCTIONS: Write ratios involving dollar amounts out to the penny, with no dollar sign: 1000.00. All ratios and interest rates should be calculated as follows: 11.28 (no percent sign) For this problem: Net Income = Earnings before Taxes = Тах еxpens 3 Earnings before Taxes & Interest = Interest expense = Gross profit = Revenue =