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

Toby’s forecasted 2021 financial statements follow, along with some industry average ratios. Calculate Toby’s 2021 forecasted ratios and fill in the above table. Calculate the EPS and DPS. The company has a 40% payout ratio. Please provide the solutions for the EPS, DPS, Days Sales Outstanding, Fixed Asset Turnover, Total Asset Turnover, Return on Assets, Return on Equity, Total Debt Ratio, Profit Margin on Sales, P/E Ratio.
Give typing answer with explanation and conclusion _____ 2.) A company has a tax burden ratio of 0.4, a compound leverage factor of 0.6, a return on sales of 0.9, a leverage ratio of 0.7, and an asset turnover of 0.3. What is the ROE for the company? A.) 2.90% B.) 4.54% C.) 6.48% D.) 11.4% E.) None of the above
Use the information below to build a properly formatted income statement. A: The firm has 12,640,500 shares outstanding and EPS is $3.20.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 Revenue is $183,600,000 and its operating margin is 45.00%. Calculate EBIT. E: After completing the above: Gross Profit is 1.65 times its EBIT . Calculate Gross Profit . F: Given the above information, calculate the firm's Operating Expenses . G: Given the above information, calculate the firm's Interest Expense .
Some parts of the balance sheet and income statement of PaintsWorld Enterprises is given below. You know that the effective tax rate is 23.0% and the interest rate the company pays on its long-term debt is 11.0%. You also know that the outstanding debt has been constant over the past few years. 1.Find the leverage ratio in 2022: 2. Find the asset turnover for 2022:
Firm K has a margin of 9%, turnover of 1.4, and sales of $1,610,000. Required: Calculate Firm K's net Income, average total assets, and return on Investment (ROI). Choose Factors: Choose Numerator: Net Income * Choose Factors: X Average Total Assets /Choose Denominator: = 1 Return on Investment Choose Numerator: /Choose Denominator: 1 1 Net Income Net Income Average Total Assets Average Total Assets 0 Return on Investment Return on Investment 0
An investment centre has reported net operating profits after tax of sh.24 million. Taxation is paid at the rate of 25 per cent of the operating profit. The company has a risk adjusted weighted average cost of capital of 12 per cent per annum and is paying interest at 9 per cent per annum on a substantial long term loan. The investment centre's non-current asset value is sh.11 million and the net current assets have a value of sh.22 million. What is the Economic Value Added (EVA) for the period? Select one: A. 6.32M B. 8.32M C. 7.32M D. None of the above
Use the following information for Cronos Group, Inc. (CRON): EBIT / Revenue 25.50% Government Tax Rate 42.50% Revenue / Assets 1.95 times Current Ratio 3.15 times EBT / EBIT 0.80 times Assets / Equity 2.00 times Its interest coverage ratio is closest to: A. 2.50. B. 5.00. C. 7.15. D. 9.25.
you have developed the following pro forma income statement for your? corporation: it represents the most recent? year’s operations, which ended yesterday. a.if sales should increase by 25 ?percent, by what percent would earnings before interest and taxes and net income? increase? b.if sales should decrease by 25 ?percent, by what percent would earnings before interest and taxes and net income? decrease? q c.if the firm were to reduce its reliance on debt financing such that interest expense were cut in? half, how would this affect your answers to parts a and b?? sales $ 45,750,000 variable costs -22,800,000 revenue before fixed costs $ 22,950,000 fixed costs -9,200,000 ebit $ 13,750,000 interest expense -1,350,000 earnings before taxes $ 12,400,000 taxes (50%) -6,200,000 net income $ 6,200,000
Rivera Corporation has an operating income of $3 million and a tax rate of 32%. Capital invested is $12 million and the after-tax percentage cost of capital is 9%. Determine the economic value added (EVA) of the company.
Your firm has total sales of $10,508. Costs are $6,062, depreciation expense is $1,188, and the interest expense is $650. The tax rate is 30 percent. Compute the firm's net profit margin. Assume there are no other expenses. Round your answer to FOUR decimal places. For example, if your answer is .2525 or 25.25%, your answer should be 0.2525.
Corporate Tax Rate Schedule Range of taxable income $0 to 50,000 to 75,000 to 100,000 to 335,000 to 10,000,000 to 15,000,000 to Over 18,333,333 $50,000 75,000 100,000 335,000 10,000,000 15,000,000 18,333,333 Base tax + + (15% $0 7,500 + (25% 13,750 + (34% 22,250 + (39% 113,900 + (34% 3,400,000 + (35% 5,150,000 + (38% 6,416,667 + (35% Tax calculation (Marginal ratex amount over base bracket) x amount over x amount over x amount over x amount over x amount over x amount over x amount over x amount over $0) 50,000) 75,000) 100,000) 335,000) 10,000,000) 15,000,000) 18,333,333)
The price earnings ratios for 4 public companies are: 5.2, 4.6, 3.4, 4.86. The after-tax capitalization rate is: a. 16.00% b. 18.08% c. 20.19% d. 22.15%