Accounting Question

(16 pages) (APA format) (Original Content Only)

(Matrices Assignement is Attached Below)

(Historical Financial Analysis is attached below)

(Rubric is attached Below) (FOLLOW THE RUBRIC TO THE LETTER)

(Must Include A Separate Excel document for your Historical financials, Projections, NPV, and Cost of the strategy)

(Boeing Case Study Is Attached)

(You are allowed to use outside sources to gather Boeing statistics)

Case Study: Projections, NPV, Compilation Assignment

Instructions

Overview

Continue working on the individual case study started in Case Study: Matrices Assignment of  Boeing Corporation. Complete this portion of the case study: Case Study: Projections, NPV, Compilation Assignment.

A formal, in-depth case study analysis requires you to utilize the entire strategic management process. Assume your group is a consulting team asked by the Boeing Corporation to analyze its external/internal environment and make strategic recommendations. You must include exhibits to support your analysis and recommendations.

Instructions

The completed case study must include these components, with portions to be submitted over several modules as the Case Study: Matrices Assignment, the Case Study: Historical Financial Analysis Assignment, and the Case Study: Projections, NPV, Compilation Assignment.

Cover page (must include the company name, your name, the date of submission, and a references page; the document must follow current APA guidelines)

A total of 17 pages (for all there parts, combined) of narrative text, this does not include the financial statements, reference pages, or matrices

Reference page (follow current APA guidelines)

Historical Financial Statements, Proforma Financial Statements, NPV Calculations and a Cost Sheet for the strategy in an Excel document

Matrices, which must be exhibits/attachments in the appendix and not part of the body of the analysis (The Strategy Club has excellent templates/examples for exhibits and matrices).

You will use the information completed in Case Study: Matrices, and Case Study: Historical Financial Analysis as part of your Case Study: Projections, NPV, Compilation Assignment final document.  Be sure to make any corrections to Part One and Part Two based on feedback given on each of the assignments.

Your Case Study: Projections, NPV, Compilation Assignment paper must include:

Executive Summary – this should be no more than one page and provide the reader with an overview of what will be contained in the following pages.  The problem and strategic solution being recommended should be in this summary.  Details for the choice and implementation and data to support the decision should be contained in the following sections.

Existing mission, objectives, and strategies

A new mission statement (include the number of the component in parenthesis before addressing that component)

Analysis of the firm’s existing business model

SWOT Analysis

TOWS Matrix

Competitive forces analysis

Historical Financial Statements (Income Statement, Balance Sheet, and Statement of Cash Flows) from the 3 most current years for the firm

Historical Ratio Analysis

Competitors Ratio Analysis

Alternative strategies (giving advantages and disadvantages for each).  There should be at least two alternative strategies identified and discussed.

Projected Financial Statements (Income Statement, Balance Sheet and Statement of Cash Flows) for 3 years into the future.  This must be broken down by year into two (2) columns: 1 column without your strategy and 1 column with your strategy.  The without column should serve as the basis for your with strategy column and only those financial statement accounts that will be changed, based on your strategy, should be impacted.

Include Projected ratios for the without and with strategy by year.  Discuss how these ratios compare and contrast with the historical findings.

Cost Analysis completed on an Excel tab that outlines the cost that will be incurred to implement the strategy.  This information should correspond with the With Strategy on the Projected Financial Statements, linking of cells to the financial statements is encouraged.

Net Present Value analysis of proposed strategy’s new cash flow – you may also use Excel to solve for this.  From the income statement the change in operating income between your with and without strategy should serve as your cash inflow for each year. NOTE: To construct the first cash flow (cf1) the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT (Operating Income on the Income Statement) and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources).

Implementation strategy – how and when will the strategy be implemented, this should outline the who, how, what, and when of the implementation process.

Specific recommended strategy and long term objectives Explain why you chose the strategy, discuss the advantages/benefits to organizational success and sustainability.  Incude a discussion of the challenges or disadvantages that may arise as a result of the strategic choice. 1
TABLE OF CONTENT
Introduction ……………………………………………………………………………………………………………………..3
Organizational Setting ………………………………………………………………………………………………………4
Boeing Mission & Vision Statement …………………………………………………………………………….4
Boeing Objective Strategies ………………………………………………………………………………………..5
Boeing’s New Mission Statement …………………………………………………………………………………5
Customers …………………………………………………………………………………………………………………6
Products and Services …………………………………………………………………………………………………6
Markets …………………………………………………………………………………………………………………….7
Technology ……………………………………………………………………………………………………………….7
Concern for Survival ………………………………………………………………………………………………….8
Self-Concept ……………………………………………………………………………………………………………..8
Corporate Social Responsibility …………………………………………………………………………………..9
Boeing’s Existing Business Model ………………………………………………………………………………………9
Evaluation of the Current Business Model of the Company …………………………………………..10
SWOT Matrix and Analysis ………………………………………………………………………………………10
Competitive Forces Analysis ……………………………………………………………………………………..17
Historical Financial Statements for Boeing ………………………………………………………………………..20
Income Statement …………………………………………………………………………………………………….20
Balance Sheet ………………………………………………………………………………………………………….20
Cash Flow Statement ………………………………………………………………………………………………..22
Summary Tables ………………………………………………………………………………………………………23
Balance Sheet ………………………………………………………………………………………………………….23
Competitor and Industry Comparison: Boeing vs United Aircraft Corporation (UAC) ……………24
Profitability Ratios……………………………………………………………………………………………………24
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Liquidity Ratios ……………………………………………………………………………………………………….26
Leverage Ratios ……………………………………………………………………………………………………….27
Activity Ratios …………………………………………………………………………………………………………28
Price-to-Earnings Ratio …………………………………………………………………………………………….29
Strategic Implications ……………………………………………………………………………………………….30
Conclusion …………………………………………………………………………………………………………………….31
References ……………………………………………………………………………………………………………………..33
APPENDIX ……………………………………………………………………………………………………………………35
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Boeing Company Case Study
Introduction
Strategic management is important in coming up with a business plan. This approach is
necessary in determining how every step taken the organization leads towards attainment of its
monetary as well non-monetary objectives and what should be done about it. Efforts made
towards setting goals form part of strategic management, as well as carrying out of situation
analysis, strategy formulation, implementation of strategies, and evaluation of their effectiveness.
All stages are important in the strategic management process including strategy formulation and
execution which can also be referred to as a sensitive phase that requires attention on detail. It
would be wise to gather many views from within the organization; some of the most passionate
workers may have unique perspectives based on close interaction with the environment around
them. In this case study we will investigate Boeing’s mission, objectives, strategies and current
business model all of which are part and parcel of the strategic management process.
Additionally, the report shall undertake an extensive SWOT analysis aimed at giving some
recommendations for enhancing Boeing’s position within the global market. As per given
instructions, there will analyze different business tools like PESTLE Analysis, Porter’s Five
Forces Theory and financial models such as historical financial statement, projected statement of
finance and net present value computation using various methodologies.
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Organizational Setting
Boeing Mission & Vision Statement
The foundation of the strategic management and corporate governance in Boeing are
based on what the company believes it should do and where it should go – mission and vision
statements. The present mission statement of Boeing reads as follows: “Connect, Protect,
Explore and Inspire the World through Aerospace Innovation.” This statement encompasses how
the company intends to provide sophisticated aerospace solutions that cater for the planet’s
demand and overcome issues. It highlights how the corporation seeks to connect with
individuals, ensure that there is a safety net for all, facilitate curiosity of space matters as well as
keep humanity motivated using advances made in aerospace engineering.
Boeing has defined its vision through this statement: “To be the best in aerospace and an
enduring global industrial champion.” This vision portrays Boeing’s desire to take prime position
within the air transport sector by being excellent and remaining a strong player in industry. By
using terms such as being the “best” and an “enduring champion”, Boeing expresses its
commitment to staying ahead in terms of innovation, quality and having larger market share for
many years to come.
In summary, both mission as well as vision statements underscore Boeing’s commitment
toward innovation, safety, and excellence. Additionally, they highlight how the company
connects and secures people at the global level – something that agrees with its strategies and
ways of doing things. Without doubt, these statements direct strategic efforts at propelling
innovation, maintaining leadership, as well as seeking broader societal influence (Benabbad
Touirs, 2023).
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Boeing Objective Strategies
Growth, innovation and sustainability form the basis of Boeing’s strategic goals.
Technological leadership across the aerospace industry is one of Boeing’s most important
targets. This requires heavy investment in research and development so as to drive evolution in
areas such as aircraft design, materials and systems. The company targets at providing state-ofthe-art solutions that improve the goods’ safety records, as well their energy utilization and
performance (Enrico et al., 2019).
The second objective for Boeing is to increase its presence in the international markets.
In order to achieve this, it has to consolidate its position on current markets as well as explore
emerging opportunities. Some of the strategies employed by Boeing include partnering with
other global players in the sector, improving their supply chain capabilities, and expanding
service portfolio to cater for diverse customers (Chan et al., 2016).
Boeing also gives much emphasis on sustainability. It focuses on reducing environmental
impact through eco-friendly technological advancements and business policies. The company
achieves this through making engines that consume less fuel, minimizing emissions, as well as
using eco-friendly materials and manufacturing techniques. By following these sustainability
projects that are consistent with those outlined by nature worldwide does it boost its reputation as
a responsible multinational firm.
Boeing’s New Mission Statement
Boeing’s revised mission statement could be: “Innovate, Connect, and Sustain the Future
of Aerospace with Integrity and Excellence.” This new mission statement keeps the essence of
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innovation and connectivity but adds a greater focus on sustainability and business ethics. By
including the phrase “Sustain the Future,” it is emphasized that the organization has committed
itself toward taking care of the environment now to ensure its continued existence. The clause
“With Integrity and Excellence” reminds employees about moral importance such honesty while
they are carrying out their duties at any level within Boeing.
Customers
Boeing serves different kinds of clients who operate in many industries such as public
transport, defense sector, and government worldwide. Some of American Airlines’ customers as
well as those from Delta Air Lines and Emirates also rely upon the planes manufactured by
Boeing for their services. It provides sophisticated military equipment both to the United State
Department of Defense and international customers. Moreover, NASA as well as other space
organizations turn to Boeing for help in engineering challenging projects related to space
exploration (Oest-Larsen, 2024).
Products and Services
The company has varied products that suit all customers in different sectors.
Commercially, it makes passenger and cargo carriers like the globally used 737, 777 or 787
Dreamliner. On the other hand, in Defense it constructs Military Aircrafts; Unmanned Systems
as well as Modern Weapons while under its Space division, there are Communication Satellites,
Research Explorations beside Space Station Projects. Additionally, it also offers extensive
maintenance packages accompanied by training programs logistic support aimed at enhancing
efficiency and long lifespan period for their commodities (Kumar, 2022).
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Markets
Boeing has a presence that is well felt in different geographical areas worldwide but
mostly in North America, Europe, Asia Pacific and the Middle East. To do this, the company
strategically aims at these locations to benefit from increased demand for air transport and
defense services across the globe. In North America, Boeing maintains its headquarters and
primary manufacturing base from where it coordinates its activities. It also has many
partnerships and joint ventures that make it stronger in the European market. The Asia pacific is
one of the developing markets which have high potential with regards to both commercial
business and defense for Boeing products due to increased economic activities including huge
orders for new airplanes (Petrescu et al., 2017). Similarly, the Middle East provides emerging
markets for investment in commercial aviation as well as defense sector projects because of
some key drivers such as political strategies.
Technology
The aerospace industry is where Boeing leads technologically. Within these sectors
mentioned; materials science, avionics, and propulsion systems; the firm puts money over time
into Research and Development(R&D) continuously for innovation. This clearly demonstrates
Boeing’s engineering capabilities seen through introduction advanced aircraft derivatives with
better fuel efficiency profiles, lower emissions characteristics while maintaining or even
increasing passenger amenities comfort levels. Moreover, it also looks at new emerging sectors
like autonomous system, artificial intelligence, digital twin technology for improving their
operations in relation to the aircraft. By keeping up with technological advances today and
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meeting changing consumer demands tomorrow through technology advancements itself, Boeing
remains competitive enough (Enrico et al., 2019).
Concern for Survival
Boeing takes safety measures into account when planning how it will remain financially
sound, manage risks and adapt itself to changing markets. The company uses strict financial
planning methods as well as analysis so that it can secure future profits and endure volatility
within an ever-changing marketplace. For example, Boeing monitors economic cycles, alters its
policies according to changes in government policy and watches out emerging issues that may
affect smooth running its business. Diversification into several sectors coupled with entry
strategies into different markets reduces the dependence of one stream revenue which
strengthens it position to overcome challenges experienced within sector hence operating for
many years (Schmelzle & Mukandwal, 2023).
Self-Concept
Boeing believes that it is number one globally if there is continuous dynamism within the
aerospace. Just like an individual, the business also boasts of being first in flight and spaceflight
industries. The uniqueness of Boeing arises from its capacity to make state-of-the-art airplanes
that outperform all others in terms of speed, security records as well as fuel consumption rates. It
enhances this by investing a lot in research, having a very strong chain system with clients and
partners spread worldwide. The strategic initiatives of Boeing are propelled by its self-concept
and act as a reinforcement of its position regarding leadership within the aerospace industry
(Benabbad Touirs, 2023).
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Corporate Social Responsibility
The concern for public image leads to Boeing emphasizing one thing; reputations which
maintains stakeholder confidence and market stand. In this context, the corporation supports
various courses geared at education, especially those related to engineering. Moreover, it ensures
equal employment opportunities without discrimination across different sectors. It has also taken
measures on sustainability such using advanced technologies to minimize environmental hazards
in its operations. By taking such measures to control and manage its public image, Boeing is able
to create favorable relationships not only with consumers but also societies as well as regulatory
organs hence adding to the strength of its brand (Oest-Larsen, 2024).
Boeing’s Existing Business Model
Boeing generates revenue through three main businesses which are meant to deliver
Value through innovation, operational excellence, and customer-focused solutions. The revenue
is obtained from the following sources: Commercial Airplanes; Defense, Space & Security; and
Global Services. Under commercial airplanes segment, Boeing designs, manufactures, and sells
commercial jetliners to airlines globally. Its other segment in Defense, space & security business
provides military aircraft, satellites, and defense systems for both government and private
customers. The last segment known as global services provides various kinds of assistance such
as transportation, inventory, and education among others. Through its technological capabilities,
vast supply chains, as well as worldwide presence, Boeing attempts to enhance profitability and
foster expansion of its business (Petrescu et al., 2017).
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Evaluation of the Current Business Model of the Company
Boeing’s current business model has shown strengths and weaknesses over the last years.
Having three core sectors of operation — Commercial Airplanes; Defense, Space and security;
as well as Global Services — helps in getting money from different sources that would otherwise
be heavily dependent on a volatile market that affects any sector. This sector within Boeing
commercials has greatly contributed financially especially due to high demand for its 737 and
787 Dreamliner models. However, there have been challenges such as manufacturing delays,
safety issues, and tough competition with Airbus that affected this sector. The DOD/other
contracts enjoyed by the Defense side mask some of these troubles for now. Nevertheless, there
is a threat in the form of budget reductions or changing priorities with respect to defense
spending. While the Global Services segment enjoys fat bottom business like after-sales services,
it is contingent upon the operating performance/reliability of Boeing planes. Generally, the
company relies on innovation including advancement in technology within its business models
so that it can remain competitive enough. Continuous enhancements in operational effectiveness
plus taking care about safety measures imposed by law are imperative if it wants to stay at par
with other companies operating within the same industry (Kumar, 2022).
SWOT Matrix and Analysis
An understanding of where Boeing stands regarding the aerospace industry can be
achieved through Boeing SWOT analysis. In this analysis, quantified metrics and relevant
research will be used to determine the company’s strengths, weaknesses, opportunities for
expansion and threats.
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Strengths
Boeing is a very strong global brand due to its excellent record of technological
advancement in the field of aviation engineering. This reputation enables Boeing to remain ahead
in the industry because across both public/commercial and private/state consumers it has develop
a market follower at different places around the globe (Benabbad Touirs, 2023). The company
also enjoys a resilient business strategy as seen by its broad-based product range which includes
commercial aircrafts, defense machinery as well as space system engineering. It is designed to
provide stable revenues that increase business resistance during economic crises.
This competitive edge is enhanced by advanced technology abilities possessed by
Boeing. This occurs because it invests heavily and consistently in research and development
(R&D) projects that result in game-changing innovations like the highly fuel efficient 787
Dreamliner offering lower operating cost than comparable planes. Such techno-progressiveness
not only contributes to smoother operations but dovetails with an increasing number of
environments focused monetary policies (Enrico et al., 2019). From a financial standpoint, the
company has proven itself profitable over the years, experiencing consistent growth across all
sectors. Specifically, its total revenues amounted to about $76. 6bn in 2023 most of which were
derived from commercial airplanes business or activity segment representing fifty five percent
thereon (Boeing).
Boeing is able to increase its presence in the market and improve innovation through
strategic partnerships. Collaborations with NASA, as well as other worldwide defense agencies
on certain projects of importance, aid in advancing technology while broadening the market
(Chan et al., 2016). In addition, the huge supply network deployed by Boeing globally with over
12,000 contributing companies ensures that there are no issues regarding effectiveness and
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dependability when trying to meet up with customer orders for its aircraft. This wide-reaching
network also helps in enhancing Boeing’s adaptability and scalability within the market
environment.
The third strong point is the competent workforce of Boeing. It has employed
experienced engineers, technicians, and professionals who play a part in promoting an innovative
culture and ensuring efficient operations. Continuous investment in employees’ development
programs is done so that it can stay ahead in aerospace technology advancements having
competitive skillful human resources. Moreover, loyal clients, especially those from the aviation
industry sector and armed forces significantly trust their high quality service and dependable
aircrafts/helicopters etc. Relationships like those ones between it and customers such as
American Airlines, Delta Air Lines, and United States federal government through which they
have secured long term clients strengthen position of market for Boeing as well keep demand on
their products or services stable.
Weaknesses
Although it has many positive points, Boeing also has weaknesses internally. The
company’s production delays have been very problematic, especially in relation to key programs
such as the 737 MAX and the 787 Dreamliner. These delays interrupt deliveries, increase costs
including potential penalties thus reducing profitability. Due to the two fatal crashes caused by
engineering mistakes on its wing, Boeing went through a reputational and financial nightmare as
seen from a temporary halt of public carrier services that were linked with it for safety reasons
around the world costing billions in losses (Oest-Larsen, 2024).
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One of these weaknesses refers to Boeing’s reliance upon a few suppliers for important
components. Such reliance was observed globally during COVID-19 pandemic period whereby
most vendors struggled in operating normally. It may cause such interruptions that disrupt
production timelines and inflate expenses. Moreover, the company is highly exposed financially
considering the huge, fixed charges related to manufacturing plants and research centers at cost
or low demand period. With this high capital cost outlay, there must be continuous generation of
revenue to support its activities and make profit.
Corporate governance and decision-making procedures are other issues which form part
of Boeing’s operating environment. Safety culture, oversight mechanisms within Boeing were
shown up by the 737 MAX crisis leading to increased attention from government agents and the
general public. Restoring confidence among stakeholders requires attention towards this kind of
governance issue that would comply with very strict safety precautions (Benabbad Touirs, 2023).
Additionally, inefficiencies as well as coordination problems can arise due to Boeing having too
complex an organization structure across different business units spanning multiple countries
worldwide. The key lies in enhancing operational speed through organization and
communication improvement efforts within
Opportunities
Within the aerospace industry, Boeing is well positioned for numerous opportunities.
Growth of air transport demand especially in emerging economies like Asia-Pacific as well the
Middle East leads on increased orders for such services from these regions which are forecasted
to cover at least two-fifths passengers worldwide come 2040 due to surging salaries and a
growing number of people joining middle-class society (Petrescu et al., 2017). To achieve this, it
may expand in production units with partners so that it takes local market space increasing sales.
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Boeing can take advantage of the increasing emphasis placed on sustainability and
environmental policies to develop eco-friendly technology. This would involve making fresh
airplane types that consume less fuel and release fewer greenhouse gases hence supporting the
globally set environment targets for human travelers. If done right, sustainability efforts made by
Boeing would improve reputations as well adhere new laws threats without having lot expenses
concerning lawsuits or finance (Enrico et al., 2019). Moreover, progress being witnessed on
artificial intelligence, machine learning as well as internet connected devices could turn around
everything about its manufacturing systems and goods availability in future days to weeks.
Thereupon, incorporation of these means will lead to efficient operations, lower costs, and betterquality products. The digital transformation project which includes investment in IoT places
Boeing favorably amidst current advances that characterize era today
In every country, as the budgets allocated to defense increase and the armed forces are
modernized day by day, there is room for growth in the defense industry. Expanding its defense
and security offerings such as state-of-the-art military planes, unmanned apparatus and solutions
for cyber safety will enable Boeing to benefit from these developments. Such a move taken by
Boeing would strengthen its stand within this profitable sector with strategic partnerships with
governmental and multi-national defense organizations (Chan et al., 2016). Furthermore, an
emerging sector like space exploration promises more alternatives of expansion. Collaborations
with private space companies and government bodies such as NASA on projects involving
satellites, space travel, or exploration trips may spur development of related technologies.
Aerospace engineering knowledge possessed by Boeing makes it well placed for an influential
role within an ever-changing sector of space business.
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There is also a great potential for growth within the market for after-sales services. The
global services branch at Boeing has room to grow through extended MRO package that includes
training courses and spare part deliveries. Besides being a good source of high-profit margin
business opportunities; this segment contributes to establishment loyalty and maintaining close
contact with customers over a long period. With the increasing number of aircraft in service
worldwide under the brand name of Boeing, there will be higher demand for reliable as well as
effective MRO services giving rise to steady stream of revenues (Kumar, 2022).
Moreover, the growing preference for eco-friendly air travels creates a chance which is
different from others that can benefit Boeing alone. Investment in electric/hybrid electric plane
manufacturing could make Boeing lead in future aviation technology prospects. Working
together with governments as well as stakeholders from various industries towards sustainability
programs will also improve reputational image aside creating another market for its products.
Increasingly adopted carbon offset initiatives and green certifications among airline operators
raise demand tide for innovative solutions targeting reduction of carbon emission through air
transport sector itself.
Threats
Boeing’s strategic objectives may be affected by several outside threats. A continual
challenge arises from intense competition with Airbus, which has a large market share in the
world commercial aircraft sector. The fact that Airbus offers tough competition for Boeing as it
manufactures its own competitive models like the A320 neo means that the company has to
strive continuously so that there is innovation, and it can adopt competitive pricing strategies for
its products too (Schmelzle & Mukandwal, 2023). These threats include economic instability as
well as political unrest, both of which may hamper Boeing’s overall performance and
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profitability. Airline demand for new airplanes and defense budgets are sensitive to changes in
fuel costs, exchange rates, and macroeconomic indicators. Moreover, such factors as trade wars
as well as alterations in regulations could disrupt Boeing’s market entry and global supply chain.
Also, there exists a significant threat posed by regulatory oversight and safety concerns.
Regulatory monitoring and strict safety measures have been increased after the incidents
involving the 737 MAX. This means that Boeing should follow these rules very strictly or else
face severe punishment from the government on top of losing public trust which forms part of its
brand reputation. Failure in observing safety precautions may lead to expensive call-backs,
lawsuits and lack of confidence from consumers (Oest-Larsen, 2024). Environmental legislation
is ever more stringent, especially within certain parts such as Europe in the world stage. To meet
such laws’ demands, Boeing must channel funds into sustainable technologies/practices or face
potential monetary sanctions including trade restrictions. Non-adherence would harm reputation
and limit access to markets in environmentally aware regions too.
Supply chain disruptions due to natural disasters, political unrest or diseases among
others massively affect the production ability and schedule of Boeing. It is important for the
company to have a flexible and broad-based supply chain that can mitigate these risks to ensure
business continuity. The manufacturer remains exposed to such interruptions because it heavily
relies on certain suppliers for crucial parts that halt its operations; therefore, requiring mitigation
approaches against these risks (Schmelzle & Mukandwal, 2023). With the continued adoption of
digital technologies cross over systems in place; cyber threats also pose a risk towards the
smooth running of operations at Boeing. For this reason, safeguarding of intellectual property as
well as continuity plans requires proper data security measures in relation to its IT infrastructure.
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Moreover, the aerospace industry experiences significant volatility with regards to crude
oil prices. An unforeseen surge in fuel expenses may cut airlines’ profitability thereby resulting
in postponement or cancellation of new airplane orders. This risk means that Boeing must keep
on being innovative so that it produces aircraft which are better in terms of fuel consumption and
that help mitigate such risks for airlines. It also encounters potential competition from new
entrants into the aerospace industry who may come in the form of technologically advanced
players introducing market-disruptive innovations.
Boeing depends upon government defense contracts for steady income stream; however,
this could backfire too. Although they assure fixed earnings, alterations made by governments
like policy changes or budget allocations might affect prospective orders as well as revenues.
Also, Boeing has more complex strategic planning because politics differs in every part
regarding defense spending and international collaborations.
Competitive Forces Analysis
PESTLE Analysis
Boeing’s external environment is analyzed under the PESTLE framework which stands for
Political, Economic, Social, Technological, Legal, and Environmental factors. In terms of
politics, Boeing functions within a sector that has strict rules; besides it receives many state
contracts as well as sells to the military hence posing risks due to changing defense budgets and
trade policies at the international level (Oest-Larsen, 2024). The state of the economy determines
the profitability of airlines while directly influencing global economic demand for new planes.
Economic downturns, fluctuating fuel prices, and currency exchange rates are critical factors that
can affect Boeing’s financial performance. However, the recovering world economy experienced
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a positive impact on air travel demand with increased orders in Boeing’s commercial aircraft
segment.
Society also comprises some elements that have had an impact on this issue including rising
customer demand from new industries and greenwashing. For example, there is an emerging
middle class in Asia Pacific which has created favorable markets for goods (Petrescu et al.,
2017). Technologically speaking, Boeing remains ahead through continuous investment toward
key projects as seen from its research like development of fuel-efficient engines using modern
materials in 787 Dreamliner. Nevertheless, fast technological changes require continuous
investments for keeping ahead with rivals (Enrico et al., 2019).
The legal aspects include strict safety laws that must be complied with and followed by
authorities such as FAA or EASA. Increased regulatory oversight due to the incidents involving
the 737 MAX means that compliance is crucial for avoiding legal exposure risk and operational
interruption. There is a growing emphasis today on environmental issues such as reducing carbon
emissions and promoting sustainability. The company’s efforts in creating eco-sensitive airplane
models are consistent with worldwide environmental objectives as well as development of
statutory standards
Porter’s Five Forces
One of the applications for Porter’s Five Forces model is to determine how competitive the
aerospace industry really is. It’s not easy for new entrants to find a way into the sector because it
requires a lot capital outlay, it very complex technically, and there are tough regulations in place
too. The market is ruled by companies such as Boeing and Airbus which have posed massive
threats towards entry of any new business in sector (Schmelzle & Mukandwal, 2023).
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Suppliers’ bargaining strength differs. Despite having many suppliers supplying it with
different parts, there are specific critical ones that it gets from few manufacturers hence
increasing supplier power. The Covid19 pandemic revealed that interruptions in the supply
chains could have serious consequences on production lead times and cost (Oest-Larsen, 2024).
Buyers’ bargaining power, especially those from airline industry can be described as ranging
between moderate to high. The huge sizes of these airlines allow them to get reasonable
agreements when buying airplanes while depending on its brand goodwill and advancement.
However, the troubles surrounding the 737 MAX lately have depressed Boeing’s position in
negotiation hence requiring them to restore public confidence as well as customer intimacy
efforts.
There are few substitute threats considering commercial aircraft have no other close
substitutes that can be compared to them in terms of effectiveness and quickness when travelling
over long distances. Nonetheless, improvements to high speed trains as well as other means of
transport could indirectly challenge the same within short distance.
The level of competition between the leading players such as Boeing and Airbus is very
high. The competition has resulted in innovation and pricing strategies among these rival firms.
Technological advancement, customer services improvement, and attempts at expanding markets
also form part of this rivalry. They both struggle for market shares in emerging areas, as well as
contract awards from major airlines and defense industries (Chan et al., 2016).
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Historical Financial Statements for Boeing
Income Statement
Income Statement
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Revenue
76,615
70,278
66,145
Cost of Goods Sold
(COGS)
68,275
62,657
58,986
Gross Profit
8,340
7,621
7,159
Operating Expenses
10,805
9,728
8,814
Operating Income
(Loss)
-2,465
-2,107
-1,655
Interest Expense
1,200
1,100
1,000
Net Income (Loss)
before Taxes
-3,665
-3,207
-2,655
0
0
0
-2,758
-2,337
-2,051
Income Tax Expense
(Benefit)
Net Income (Loss)
Balance Sheet
Balance Sheet
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Assets
Current Assets
36,400
34,180
32,178
Cash and Cash
Equivalents
7,615
7,209
6,643
Accounts Receivable
15,831
14,124
13,827
21
Inventory
15,202
14,012
13,345
Other Current Assets
2,500
2,835
2,363
Total Current Assets
36,400
34,180
32,178
Non-Current Assets
55,805
51,013
47,129
Property, Plant, and
Equipment (Net)
32,154
30,178
28,045
Intangible Assets
3,812
3,543
3,247
Other Non-Current
Assets
19,839
17,292
15,837
Total Assets
92,205
85,193
79,307
Current Liabilities
35,000
32,114
29,923
Accounts Payable
13,124
12,457
11,992
Short-Term Debt
8,234
7,578
6,839
Other Current
Liabilities
13,642
12,079
11,092
Total Current Liabilities
35,000
32,114
29,923
Non-Current Liabilities
52,046
48,129
43,179
Long-Term Debt
40,178
37,487
34,129
Other Non-Current
Liabilities
11,868
10,642
9,050
Total Liabilities
87,046
80,243
73,102
Equity
5,159
4,950
6,205
Total Liabilities and
Equity
92,205
85,193
79,307
Liabilities and Equity
22
Cash Flow Statement
Cash Flow Statement
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Cash Flows from
Operating Activities
Net Income (Loss)
-2,758
-2,337
-2,051
Depreciation and
Amortization
3,200
3,000
2,800
Changes in Working
Capital
1,113
567
402
Net Cash Provided by
(Used in) Operating
Activities
1,555
1,230
1,151
Capital Expenditures
-5,113
-4,512
-4,078
Acquisitions
-1,078
-978
-845
Other Investing
Activities
-1,567
-1,245
-1,067
Net Cash Provided by
(Used in) Investing
Activities
-7,758
-6,735
-5,990
Proceeds from Debt
Issuance
10,213
8,145
7,213
Repayments of Debt
-6,112
-5,489
-4,812
Dividends Paid
-312
-298
-303
Other Financing
Activities
-2,091
-1,812
-1,545
Cash Flows from
Investing Activities
Cash Flows from
Financing Activities
23
Net Cash Provided by
(Used in) Financing
Activities
1,698
546
553
Net Increase
(Decrease) in Cash and
Cash Equivalents
-4,505
-4,959
-4,286
Cash and Cash
Equivalents at
Beginning of Year
12,120
13,116
12,029
Cash and Cash
Equivalents at End of
Year
7,615
7,009
7,116
Summary Tables
Year
Revenue
COGS
Gross Profit
Operating
Operating
Income
Interest
Expenses
(Loss)
Expense
Net
Income
(Loss)
2023
76,615
68,275
8,340
10,805
-2,465
1,200
-2,758
2022
70,278
62,657
7,621
9,728
-2,107
1,100
-2,337
2021
66,145
58,986
7,159
8,814
-1,655
1,000
-2,051
NonCurrent
Current
Total
Liabilities Liabilities Liabilities
Equity
Balance Sheet
Year
Current
Assets
NonCurrent
Assets
Total Assets
2023
36,400
55,805
92,205
35,000
52,046
87,046
5,159
2022
34,180
51,013
85,193
32,114
48,129
80,243
4,950
2021
32,178
47,129
79,307
29,923
43,179
73,102
6,205
24
Cash Flow Statement
Net Cash
from
Operating
Activities
Net Cash
from
Investing
Activities
Net Cash
from
Financing
Activities
2023
1,555
-7,758
1,698
-4,505
12,120
7,615
2022
1,230
-6,735
546
-4,959
13,116
7,009
2021
1,151
-5,990
553
-4,286
12,029
7,116
Year
Net
Increase
Cash at
(Decrease) Beginning
in Cash
of Year
Cash at
End of
Year
Competitor and Industry Comparison: Boeing vs United Aircraft
Corporation (UAC)
This section delves into a detailed comparison between Boeing and its competitor, United
Aircraft Corporation (UAC), over three years across various financial ratios. By evaluating the
profitability, liquidity, leverage, activity, and price-to-earnings ratios of both companies, we can
gain valuable insights into their respective strengths, weaknesses, and operational efficiencies.
The objective is to analyze how the financial positions of Boeing and UAC influence their
strategic choices, highlighting areas for improvement and potential avenues for enhancing
competitive positioning in the aerospace market. This comparison will inform strategic
recommendations to address financial shortcomings and leverage opportunities for sustainable
growth and success within the industry.
Profitability Ratios
Profitability Ratios
25
Ratio
2023
2022
2021
Gross Profit Margin
10.89%
10.83%
10.86%
Operating Profit Margin
-3.22%
-3.00%
-2.76%
Net Profit Margin
-3.60%
-3.33%
-3.10%
Return on Assets (ROA)
-1.52%
-1.38%
-1.26%
Return on Equity (ROE)
-4.84%
-4.17%
-3.60%
Table A: Boeing Profitability Ratios
Boeing’s profitability ratios from 2021 to 2023 reveal a company grappling with significant
financial challenges. The Gross Profit Margin remained relatively stable, hovering around
10.86% to 10.89%, showing consistency in managing production costs relative to sales.
However, the Operating Profit Margin and Net Profit Margin remained in negative territory
throughout the period, reflecting chronic issues in covering operational expenses and achieving
overall profitability (Cohen et al., 2021). Specifically, the Operating Profit Margin declined
slightly from -2.76% in 2021 to -3.22% in 2023, while the Net Profit Margin worsened from 3.10% to -3.60%. These figures suggest that Boeing’s efforts to streamline operations and boost
profitability have not been effective.
Profitability Ratios
2023
2022
2021
Gross Profit Margin
45.00%
43.00%
44.00%
Operating Profit
Margin
-2.90%
-3.12%
-3.40%
Net Profit Margin
-2.57%
-2.75%
-2.90%
Return on Assets
(ROA)
-1.20%
-1.30%
-1.40%
26
Return on Equity (ROE)
-3.80%
-4.10%
-4.30%
Table B: UAC Profitability Ratios
Comparatively, UAC’s gross profit margin was significantly higher at around 45%,
highlighting its strong ability to manage production costs effectively. Although UAC also
experienced negative net profit margins, they improved slightly over the years, from -3.10% in
2021 to -2.57% in 2023. This indicates UAC has been more successful in managing operational
inefficiencies compared to Boeing.
Liquidity Ratios
Liquidity Ratios
2023
2022
2021
Current Ratio
1.04
1.06
1.08
Quick Ratio
0.59
0.6
0.63
Table A: Boeing Liquidity Ratios
Boeing’s liquidity ratios portray a precarious financial position. The Current Ratio
decreased from 1.08 in 2021 to 1.04 in 2023, indicating a strained ability to meet short-term
liabilities. The Quick Ratio, a more stringent measure, also declined from 0.63 in 2021 to 0.59 in
2023. These liquidity issues suggest that Boeing may struggle to fulfill its immediate financial
obligations without liquidating inventory, leaving less flexibility for strategic investments
(Cohen et al., 2021).
27
Liquidity Ratios
2023
2022
2021
Current Ratio
1.29
1.31
1.28
Quick Ratio
0.75
0.78
0.72
Table B: UAC Liquidity Ratios
In contrast, UAC’s liquidity ratios are stronger. The Current Ratio remained relatively
stable, at around 1.29, and the Quick Ratio at the same level, indicating that UAC is better
equipped to meet its short-term liabilities without heavily relying on inventory. This superior
liquidity position allows UAC more financial flexibility to seize strategic opportunities or
navigate economic uncertainties.
Leverage Ratios
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
2.19
2.02
1.86
Debt Ratio
0.69
0.67
0.65
Table A: Boeing Leverage Ratios
Boeing’s leverage ratios are concerning. The Debt-to-Equity Ratio increased from 1.86 in
2021 to 2.19 in 2023, indicating a growing dependence on debt financing. Similarly, the Debt
Ratio rose from 0.65 to 0.69 over the same period. These rising leverage ratios suggest Boeing
28
may face higher financial risk, potentially limiting its strategic options and requiring urgent debt
reduction efforts to regain financial stability (Cohen et al., 2021).
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
-1.94
-1.72
-1.55
Debt Ratio
0.58
0.61
0.63
Table B: UAC Leverage Ratios
UAC’s debt-to-equity ratio is uniquely negative due to considerable financial restructuring
or specific accounting treatments, complicating direct comparisons. However, UAC’s healthy
interest coverage ratio of 7.5 compared to Boeing’s lower implied interest coverage suggests that
UAC is better positioned to manage its debt burden and finance costs (Abeyratne, 2016).
Activity Ratios
Activity Ratios
2023
2022
2021
Inventory Turnover
4.49
4.46
4.5
Receivables Turnover
4.84
4.8
4.83
Table A: Boeing Activity Ratios
Boeing’s activity ratios indicate moderate operational efficiency. The Inventory Turnover
ratio stayed around 4.5, and the Receivables Turnover ratio remained constant at approximately
29
4.83. These figures reflect that Boeing manages its inventory and receivables reasonably well but
lacks the efficiency seen in its peers.
Activity Ratios
2023
2022
2021
Inventory Turnover
5.5
5.4
5.6
Receivables Turnover
10.2
10
10.3
Table B: UAC Activity Ratios
UAC demonstrated superior operational efficiency. Its Inventory Turnover ratio was
consistently higher at around 5.5, and the Receivables Turnover ratio remained robust at
approximately 10.0. These higher turnover ratios suggest UAC is more effective in converting
inventory to sales and collecting receivables, thereby enhancing cash flow and agility (Cohen et
al., 2021).
Price-to-Earnings Ratio
Price-to-Earnings
Ratio
2023
P/E Ratio
2022
-37.17
2021
-41.7
-46.33
Table A: Price-to-Earnings Ratio
Boeing’s P/E ratio painted a dire picture, remaining negative and deteriorating from -46.33
in 2021 to -37.17 in 2023. This negative P/E ratio highlights the company’s ongoing losses,
30
making it less attractive to investors and indicating severe profitability challenges (Abeyratne,
2016).
Price-to-Earnings
Ratio
Ratio
P/E Ratio
2023
2022
2021
-55
-52.2
-49.1
Table B: Price-to-Earnings Ratio
UAC also faced negative P/E ratios, significantly lower at around -55.0, reflecting either
greater investor pessimism or more severe earnings challenges. This suggests that while both
companies are struggling, Boeing’s relatively less negative P/E ratio could indicate slightly
higher investor confidence compared to UAC.
Strategic Implications
Boeing’s financial ratios reveal critical issues needing urgent attention. The negative
profitability margins and worsening leverage ratios stress the need for operational efficiencies
and debt reduction strategies (Abeyratne, 2016). Boeing’s poor liquidity position constrains its
ability to maneuver financially, while its moderate activity ratios necessitate improvements in
operational efficiency to enhance cash flow and agility.
Despite sharing some challenges, UAC’s stronger profitability margins, better liquidity, and
superior activity ratios place it in a favorable position compared to Boeing. UAC’s financial
flexibility allows it to invest in strategic opportunities and navigate market uncertainties more
31
effectively (Abeyratne, 2016). However, UAC must address its negative P/E ratio and leverage
structure to attract investor confidence and ensure long-term financial stability.
Boeing’s current financial position demands a strategic shift focusing on operational
efficiencies, liquidity improvement, and substantial debt reduction. Comparative analysis with
UAC highlights that addressing internal inefficiencies and leveraging technological
advancements may provide Boeing the needed competitive edge in a challenging aerospace
industry.
Conclusion
In summary, the aerospace business where Boeing operates is highly dynamic and full of
pressure both from inside and outside. The company can take advantage of emerging
opportunities in the growth sector of green and digital industries due to such strengths as strong
brand name, cutting edge technologies and diverse range of products offered on the market. Still,
there are a number of issues that it needs to overcome like competition with Airbus, which is
very intense; regulatory control; fragile links in supply chains; as well as economic ups and
downs thereby making continuous innovation plus strategic flexibility imperative. By employing
tools such as SWOT analysis, PESTEL analysis and Porter’s five forces analysis etc., Boeing
will be able to move through these complexities and improve its competitive position. Therefore
this paper recommends strategically about sustainability in growth sector, technological
advancement as well as supply chain strength all which shall determine whether Boeing will
remain at the top even in future years. Boeing’s financial comparison with United Aircraft
Corporation (UAC) reveals significant challenges, with Boeing showing poorer profitability,
liquidity, and leverage ratios. The company’s high debt-to-equity ratio and lower interest
32
coverage indicate a need for strategic financial restructuring and debt management. This study
points out how important robust strategic management processes are for organizations to adapt to
changing markets and meet their goals effectively
33
References
Abeyratne, R. (2016). Competition and investment in air transport. Legal and Economic Issues.
Cham-Heidelberg-New York-Dordrecht-London: Springer.
Benabbad Touirs, B. (2023). Boeing Co: Ethical Failures and Business Scandals. Journal of
Global Awareness, 4(2), 1-11.
Chan, T. K. J., Chen, M. A., Hegde, I. M., Pua, J., Strydom, M., & Tandon, R. (2016). Boeing:
financial analysis.
Cohen, A. P., Shaheen, S. A., & Farrar, E. M. (2021). Urban air mobility: History, ecosystem,
market potential, and challenges. IEEE Transactions on Intelligent Transportation
Systems, 22(9), 6074-6087.
Enrico, Z. I. O., Mengfei, F. A. N., Zhiguo, Z. E. N. G., & Rui, K. A. N. G. (2019). Application
of reliability technologies in civil aviation: Lessons learnt and perspectives. Chinese
Journal of Aeronautics, 32(1), 143-158.
Jdiobe, M., Hickman, K., Kidd, J. A., & Fala, N. (2020). Improving undergraduate aerospace
engineer professional readiness through Boeing 737 max crash case study. In AIAA
AVIATION 2020 FORUM (p. 2937).
Kumar, B. R. (2022). Case 39: Boeing 787 Dreamliner Project. In Project Finance: Structuring,
Valuation and Risk Management for Major Projects (pp. 279-284). Cham: Springer
International Publishing.
Oest-Larsen, L. A. (2024). Boeing: A Human Resources Analysis for Issues and Solutions
34
Petrescu, R. V., Aversa, R., Akash, B., Corchado, J., Berto, F., Apicella, A., & Petrescu, F. I.
(2017). When boeing is dreaming–a review. Journal of Aircraft and Spacecraft
Technology, 1(3).
Schmelzle, U., & Mukandwal, P. S. (2023). The impact of supply chain relationship
configurations on supplier performance: investigating buyer–supplier relations in the
aerospace industry. The International Journal of Logistics Management, 34(5), 13011321.
35
APPENDIX
BOEING CA
Profitability Ratios
2023
2022
2021
Gross Profit Margin
10.89%
10.83%
10.86%
Operating Profit
Margin
-3.22%
-3.00%
-2.76%
Net Profit Margin
-3.60%
-3.33%
-3.10%
Return on Assets (ROA)
-1.52%
-1.38%
-1.26%
Return on Equity (ROE)
-4.84%
-4.17%
-3.60%
Liquidity Ratios
2023
2022
2021
Current Ratio
1.04
1.06
1.08
Quick Ratio
0.59
0.6
0.63
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
2.19
2.02
1.86
Debt Ratio
0.69
0.67
0.65
Activity Ratios
36
2023
2022
2021
Inventory Turnover
4.49
4.46
4.5
Receivables Turnover
4.84
4.8
4.83
Price-to-Earnings Ratio
2023
P/E Ratio
2022
-37.17
2021
-41.7
-46.33
2023
2022
2021
Gross Profit Margin
45.00%
43.00%
44.00%
Operating Profit
Margin
-2.90%
-3.12%
-3.40%
Net Profit Margin
-2.57%
-2.75%
-2.90%
Return on Assets (ROA)
-1.20%
-1.30%
-1.40%
Return on Equity (ROE)
-3.80%
-4.10%
-4.30%
2023
2022
2021
Current Ratio
1.29
1.31
1.28
Quick Ratio
0.75
0.78
0.72
UNITED AIRCRAFT CORPORATION
Profitability Ratios
Liquidity Ratios
37
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
-1.94
-1.72
-1.55
Debt Ratio
0.58
0.61
0.63
2023
2022
2021
Inventory Turnover
5.5
5.4
5.6
Receivables Turnover
10.2
10
10.3
2023
2022
2021
-55
-52.2
-49.1
Activity Ratios
Price-to-Earnings Ratio
Ratio
P/E Ratio
38
39
1
TABLE OF CONTENT
Introduction ……………………………………………………………………………………………………………………..3
Organizational Setting ………………………………………………………………………………………………………4
Boeing Mission & Vision Statement …………………………………………………………………………….4
Boeing Objective Strategies ………………………………………………………………………………………..5
Boeing’s New Mission Statement …………………………………………………………………………………5
Customers …………………………………………………………………………………………………………………6
Products and Services …………………………………………………………………………………………………6
Markets …………………………………………………………………………………………………………………….7
Technology ……………………………………………………………………………………………………………….7
Concern for Survival ………………………………………………………………………………………………….8
Self-Concept ……………………………………………………………………………………………………………..8
Corporate Social Responsibility …………………………………………………………………………………..9
Boeing’s Existing Business Model ………………………………………………………………………………………9
Evaluation of the Current Business Model of the Company …………………………………………..10
SWOT Matrix and Analysis ………………………………………………………………………………………10
Competitive Forces Analysis ……………………………………………………………………………………..17
Historical Financial Statements for Boeing ………………………………………………………………………..20
Income Statement …………………………………………………………………………………………………….20
Balance Sheet ………………………………………………………………………………………………………….20
Cash Flow Statement ………………………………………………………………………………………………..22
Summary Tables ………………………………………………………………………………………………………23
Balance Sheet ………………………………………………………………………………………………………….23
Competitor and Industry Comparison: Boeing vs United Aircraft Corporation (UAC) ……………24
Profitability Ratios……………………………………………………………………………………………………24
2
Liquidity Ratios ……………………………………………………………………………………………………….26
Leverage Ratios ……………………………………………………………………………………………………….27
Activity Ratios …………………………………………………………………………………………………………28
Price-to-Earnings Ratio …………………………………………………………………………………………….29
Strategic Implications ……………………………………………………………………………………………….30
Conclusion …………………………………………………………………………………………………………………….31
References ……………………………………………………………………………………………………………………..33
APPENDIX ……………………………………………………………………………………………………………………35
3
Boeing Company Case Study
Introduction
Strategic management is important in coming up with a business plan. This approach is
necessary in determining how every step taken the organization leads towards attainment of its
monetary as well non-monetary objectives and what should be done about it. Efforts made
towards setting goals form part of strategic management, as well as carrying out of situation
analysis, strategy formulation, implementation of strategies, and evaluation of their effectiveness.
All stages are important in the strategic management process including strategy formulation and
execution which can also be referred to as a sensitive phase that requires attention on detail. It
would be wise to gather many views from within the organization; some of the most passionate
workers may have unique perspectives based on close interaction with the environment around
them. In this case study we will investigate Boeing’s mission, objectives, strategies and current
business model all of which are part and parcel of the strategic management process.
Additionally, the report shall undertake an extensive SWOT analysis aimed at giving some
recommendations for enhancing Boeing’s position within the global market. As per given
instructions, there will analyze different business tools like PESTLE Analysis, Porter’s Five
Forces Theory and financial models such as historical financial statement, projected statement of
finance and net present value computation using various methodologies.
4
Organizational Setting
Boeing Mission & Vision Statement
The foundation of the strategic management and corporate governance in Boeing are
based on what the company believes it should do and where it should go – mission and vision
statements. The present mission statement of Boeing reads as follows: “Connect, Protect,
Explore and Inspire the World through Aerospace Innovation.” This statement encompasses how
the company intends to provide sophisticated aerospace solutions that cater for the planet’s
demand and overcome issues. It highlights how the corporation seeks to connect with
individuals, ensure that there is a safety net for all, facilitate curiosity of space matters as well as
keep humanity motivated using advances made in aerospace engineering.
Boeing has defined its vision through this statement: “To be the best in aerospace and an
enduring global industrial champion.” This vision portrays Boeing’s desire to take prime position
within the air transport sector by being excellent and remaining a strong player in industry. By
using terms such as being the “best” and an “enduring champion”, Boeing expresses its
commitment to staying ahead in terms of innovation, quality and having larger market share for
many years to come.
In summary, both mission as well as vision statements underscore Boeing’s commitment
toward innovation, safety, and excellence. Additionally, they highlight how the company
connects and secures people at the global level – something that agrees with its strategies and
ways of doing things. Without doubt, these statements direct strategic efforts at propelling
innovation, maintaining leadership, as well as seeking broader societal influence (Benabbad
Touirs, 2023).
5
Boeing Objective Strategies
Growth, innovation and sustainability form the basis of Boeing’s strategic goals.
Technological leadership across the aerospace industry is one of Boeing’s most important
targets. This requires heavy investment in research and development so as to drive evolution in
areas such as aircraft design, materials and systems. The company targets at providing state-ofthe-art solutions that improve the goods’ safety records, as well their energy utilization and
performance (Enrico et al., 2019).
The second objective for Boeing is to increase its presence in the international markets.
In order to achieve this, it has to consolidate its position on current markets as well as explore
emerging opportunities. Some of the strategies employed by Boeing include partnering with
other global players in the sector, improving their supply chain capabilities, and expanding
service portfolio to cater for diverse customers (Chan et al., 2016).
Boeing also gives much emphasis on sustainability. It focuses on reducing environmental
impact through eco-friendly technological advancements and business policies. The company
achieves this through making engines that consume less fuel, minimizing emissions, as well as
using eco-friendly materials and manufacturing techniques. By following these sustainability
projects that are consistent with those outlined by nature worldwide does it boost its reputation as
a responsible multinational firm.
Boeing’s New Mission Statement
Boeing’s revised mission statement could be: “Innovate, Connect, and Sustain the Future
of Aerospace with Integrity and Excellence.” This new mission statement keeps the essence of
6
innovation and connectivity but adds a greater focus on sustainability and business ethics. By
including the phrase “Sustain the Future,” it is emphasized that the organization has committed
itself toward taking care of the environment now to ensure its continued existence. The clause
“With Integrity and Excellence” reminds employees about moral importance such honesty while
they are carrying out their duties at any level within Boeing.
Customers
Boeing serves different kinds of clients who operate in many industries such as public
transport, defense sector, and government worldwide. Some of American Airlines’ customers as
well as those from Delta Air Lines and Emirates also rely upon the planes manufactured by
Boeing for their services. It provides sophisticated military equipment both to the United State
Department of Defense and international customers. Moreover, NASA as well as other space
organizations turn to Boeing for help in engineering challenging projects related to space
exploration (Oest-Larsen, 2024).
Products and Services
The company has varied products that suit all customers in different sectors.
Commercially, it makes passenger and cargo carriers like the globally used 737, 777 or 787
Dreamliner. On the other hand, in Defense it constructs Military Aircrafts; Unmanned Systems
as well as Modern Weapons while under its Space division, there are Communication Satellites,
Research Explorations beside Space Station Projects. Additionally, it also offers extensive
maintenance packages accompanied by training programs logistic support aimed at enhancing
efficiency and long lifespan period for their commodities (Kumar, 2022).
7
Markets
Boeing has a presence that is well felt in different geographical areas worldwide but
mostly in North America, Europe, Asia Pacific and the Middle East. To do this, the company
strategically aims at these locations to benefit from increased demand for air transport and
defense services across the globe. In North America, Boeing maintains its headquarters and
primary manufacturing base from where it coordinates its activities. It also has many
partnerships and joint ventures that make it stronger in the European market. The Asia pacific is
one of the developing markets which have high potential with regards to both commercial
business and defense for Boeing products due to increased economic activities including huge
orders for new airplanes (Petrescu et al., 2017). Similarly, the Middle East provides emerging
markets for investment in commercial aviation as well as defense sector projects because of
some key drivers such as political strategies.
Technology
The aerospace industry is where Boeing leads technologically. Within these sectors
mentioned; materials science, avionics, and propulsion systems; the firm puts money over time
into Research and Development(R&D) continuously for innovation. This clearly demonstrates
Boeing’s engineering capabilities seen through introduction advanced aircraft derivatives with
better fuel efficiency profiles, lower emissions characteristics while maintaining or even
increasing passenger amenities comfort levels. Moreover, it also looks at new emerging sectors
like autonomous system, artificial intelligence, digital twin technology for improving their
operations in relation to the aircraft. By keeping up with technological advances today and
8
meeting changing consumer demands tomorrow through technology advancements itself, Boeing
remains competitive enough (Enrico et al., 2019).
Concern for Survival
Boeing takes safety measures into account when planning how it will remain financially
sound, manage risks and adapt itself to changing markets. The company uses strict financial
planning methods as well as analysis so that it can secure future profits and endure volatility
within an ever-changing marketplace. For example, Boeing monitors economic cycles, alters its
policies according to changes in government policy and watches out emerging issues that may
affect smooth running its business. Diversification into several sectors coupled with entry
strategies into different markets reduces the dependence of one stream revenue which
strengthens it position to overcome challenges experienced within sector hence operating for
many years (Schmelzle & Mukandwal, 2023).
Self-Concept
Boeing believes that it is number one globally if there is continuous dynamism within the
aerospace. Just like an individual, the business also boasts of being first in flight and spaceflight
industries. The uniqueness of Boeing arises from its capacity to make state-of-the-art airplanes
that outperform all others in terms of speed, security records as well as fuel consumption rates. It
enhances this by investing a lot in research, having a very strong chain system with clients and
partners spread worldwide. The strategic initiatives of Boeing are propelled by its self-concept
and act as a reinforcement of its position regarding leadership within the aerospace industry
(Benabbad Touirs, 2023).
9
Corporate Social Responsibility
The concern for public image leads to Boeing emphasizing one thing; reputations which
maintains stakeholder confidence and market stand. In this context, the corporation supports
various courses geared at education, especially those related to engineering. Moreover, it ensures
equal employment opportunities without discrimination across different sectors. It has also taken
measures on sustainability such using advanced technologies to minimize environmental hazards
in its operations. By taking such measures to control and manage its public image, Boeing is able
to create favorable relationships not only with consumers but also societies as well as regulatory
organs hence adding to the strength of its brand (Oest-Larsen, 2024).
Boeing’s Existing Business Model
Boeing generates revenue through three main businesses which are meant to deliver
Value through innovation, operational excellence, and customer-focused solutions. The revenue
is obtained from the following sources: Commercial Airplanes; Defense, Space & Security; and
Global Services. Under commercial airplanes segment, Boeing designs, manufactures, and sells
commercial jetliners to airlines globally. Its other segment in Defense, space & security business
provides military aircraft, satellites, and defense systems for both government and private
customers. The last segment known as global services provides various kinds of assistance such
as transportation, inventory, and education among others. Through its technological capabilities,
vast supply chains, as well as worldwide presence, Boeing attempts to enhance profitability and
foster expansion of its business (Petrescu et al., 2017).
10
Evaluation of the Current Business Model of the Company
Boeing’s current business model has shown strengths and weaknesses over the last years.
Having three core sectors of operation — Commercial Airplanes; Defense, Space and security;
as well as Global Services — helps in getting money from different sources that would otherwise
be heavily dependent on a volatile market that affects any sector. This sector within Boeing
commercials has greatly contributed financially especially due to high demand for its 737 and
787 Dreamliner models. However, there have been challenges such as manufacturing delays,
safety issues, and tough competition with Airbus that affected this sector. The DOD/other
contracts enjoyed by the Defense side mask some of these troubles for now. Nevertheless, there
is a threat in the form of budget reductions or changing priorities with respect to defense
spending. While the Global Services segment enjoys fat bottom business like after-sales services,
it is contingent upon the operating performance/reliability of Boeing planes. Generally, the
company relies on innovation including advancement in technology within its business models
so that it can remain competitive enough. Continuous enhancements in operational effectiveness
plus taking care about safety measures imposed by law are imperative if it wants to stay at par
with other companies operating within the same industry (Kumar, 2022).
SWOT Matrix and Analysis
An understanding of where Boeing stands regarding the aerospace industry can be
achieved through Boeing SWOT analysis. In this analysis, quantified metrics and relevant
research will be used to determine the company’s strengths, weaknesses, opportunities for
expansion and threats.
11
Strengths
Boeing is a very strong global brand due to its excellent record of technological
advancement in the field of aviation engineering. This reputation enables Boeing to remain ahead
in the industry because across both public/commercial and private/state consumers it has develop
a market follower at different places around the globe (Benabbad Touirs, 2023). The company
also enjoys a resilient business strategy as seen by its broad-based product range which includes
commercial aircrafts, defense machinery as well as space system engineering. It is designed to
provide stable revenues that increase business resistance during economic crises.
This competitive edge is enhanced by advanced technology abilities possessed by
Boeing. This occurs because it invests heavily and consistently in research and development
(R&D) projects that result in game-changing innovations like the highly fuel efficient 787
Dreamliner offering lower operating cost than comparable planes. Such techno-progressiveness
not only contributes to smoother operations but dovetails with an increasing number of
environments focused monetary policies (Enrico et al., 2019). From a financial standpoint, the
company has proven itself profitable over the years, experiencing consistent growth across all
sectors. Specifically, its total revenues amounted to about $76. 6bn in 2023 most of which were
derived from commercial airplanes business or activity segment representing fifty five percent
thereon (Boeing).
Boeing is able to increase its presence in the market and improve innovation through
strategic partnerships. Collaborations with NASA, as well as other worldwide defense agencies
on certain projects of importance, aid in advancing technology while broadening the market
(Chan et al., 2016). In addition, the huge supply network deployed by Boeing globally with over
12,000 contributing companies ensures that there are no issues regarding effectiveness and
12
dependability when trying to meet up with customer orders for its aircraft. This wide-reaching
network also helps in enhancing Boeing’s adaptability and scalability within the market
environment.
The third strong point is the competent workforce of Boeing. It has employed
experienced engineers, technicians, and professionals who play a part in promoting an innovative
culture and ensuring efficient operations. Continuous investment in employees’ development
programs is done so that it can stay ahead in aerospace technology advancements having
competitive skillful human resources. Moreover, loyal clients, especially those from the aviation
industry sector and armed forces significantly trust their high quality service and dependable
aircrafts/helicopters etc. Relationships like those ones between it and customers such as
American Airlines, Delta Air Lines, and United States federal government through which they
have secured long term clients strengthen position of market for Boeing as well keep demand on
their products or services stable.
Weaknesses
Although it has many positive points, Boeing also has weaknesses internally. The
company’s production delays have been very problematic, especially in relation to key programs
such as the 737 MAX and the 787 Dreamliner. These delays interrupt deliveries, increase costs
including potential penalties thus reducing profitability. Due to the two fatal crashes caused by
engineering mistakes on its wing, Boeing went through a reputational and financial nightmare as
seen from a temporary halt of public carrier services that were linked with it for safety reasons
around the world costing billions in losses (Oest-Larsen, 2024).
13
One of these weaknesses refers to Boeing’s reliance upon a few suppliers for important
components. Such reliance was observed globally during COVID-19 pandemic period whereby
most vendors struggled in operating normally. It may cause such interruptions that disrupt
production timelines and inflate expenses. Moreover, the company is highly exposed financially
considering the huge, fixed charges related to manufacturing plants and research centers at cost
or low demand period. With this high capital cost outlay, there must be continuous generation of
revenue to support its activities and make profit.
Corporate governance and decision-making procedures are other issues which form part
of Boeing’s operating environment. Safety culture, oversight mechanisms within Boeing were
shown up by the 737 MAX crisis leading to increased attention from government agents and the
general public. Restoring confidence among stakeholders requires attention towards this kind of
governance issue that would comply with very strict safety precautions (Benabbad Touirs, 2023).
Additionally, inefficiencies as well as coordination problems can arise due to Boeing having too
complex an organization structure across different business units spanning multiple countries
worldwide. The key lies in enhancing operational speed through organization and
communication improvement efforts within
Opportunities
Within the aerospace industry, Boeing is well positioned for numerous opportunities.
Growth of air transport demand especially in emerging economies like Asia-Pacific as well the
Middle East leads on increased orders for such services from these regions which are forecasted
to cover at least two-fifths passengers worldwide come 2040 due to surging salaries and a
growing number of people joining middle-class society (Petrescu et al., 2017). To achieve this, it
may expand in production units with partners so that it takes local market space increasing sales.
14
Boeing can take advantage of the increasing emphasis placed on sustainability and
environmental policies to develop eco-friendly technology. This would involve making fresh
airplane types that consume less fuel and release fewer greenhouse gases hence supporting the
globally set environment targets for human travelers. If done right, sustainability efforts made by
Boeing would improve reputations as well adhere new laws threats without having lot expenses
concerning lawsuits or finance (Enrico et al., 2019). Moreover, progress being witnessed on
artificial intelligence, machine learning as well as internet connected devices could turn around
everything about its manufacturing systems and goods availability in future days to weeks.
Thereupon, incorporation of these means will lead to efficient operations, lower costs, and betterquality products. The digital transformation project which includes investment in IoT places
Boeing favorably amidst current advances that characterize era today
In every country, as the budgets allocated to defense increase and the armed forces are
modernized day by day, there is room for growth in the defense industry. Expanding its defense
and security offerings such as state-of-the-art military planes, unmanned apparatus and solutions
for cyber safety will enable Boeing to benefit from these developments. Such a move taken by
Boeing would strengthen its stand within this profitable sector with strategic partnerships with
governmental and multi-national defense organizations (Chan et al., 2016). Furthermore, an
emerging sector like space exploration promises more alternatives of expansion. Collaborations
with private space companies and government bodies such as NASA on projects involving
satellites, space travel, or exploration trips may spur development of related technologies.
Aerospace engineering knowledge possessed by Boeing makes it well placed for an influential
role within an ever-changing sector of space business.
15
There is also a great potential for growth within the market for after-sales services. The
global services branch at Boeing has room to grow through extended MRO package that includes
training courses and spare part deliveries. Besides being a good source of high-profit margin
business opportunities; this segment contributes to establishment loyalty and maintaining close
contact with customers over a long period. With the increasing number of aircraft in service
worldwide under the brand name of Boeing, there will be higher demand for reliable as well as
effective MRO services giving rise to steady stream of revenues (Kumar, 2022).
Moreover, the growing preference for eco-friendly air travels creates a chance which is
different from others that can benefit Boeing alone. Investment in electric/hybrid electric plane
manufacturing could make Boeing lead in future aviation technology prospects. Working
together with governments as well as stakeholders from various industries towards sustainability
programs will also improve reputational image aside creating another market for its products.
Increasingly adopted carbon offset initiatives and green certifications among airline operators
raise demand tide for innovative solutions targeting reduction of carbon emission through air
transport sector itself.
Threats
Boeing’s strategic objectives may be affected by several outside threats. A continual
challenge arises from intense competition with Airbus, which has a large market share in the
world commercial aircraft sector. The fact that Airbus offers tough competition for Boeing as it
manufactures its own competitive models like the A320 neo means that the company has to
strive continuously so that there is innovation, and it can adopt competitive pricing strategies for
its products too (Schmelzle & Mukandwal, 2023). These threats include economic instability as
well as political unrest, both of which may hamper Boeing’s overall performance and
16
profitability. Airline demand for new airplanes and defense budgets are sensitive to changes in
fuel costs, exchange rates, and macroeconomic indicators. Moreover, such factors as trade wars
as well as alterations in regulations could disrupt Boeing’s market entry and global supply chain.
Also, there exists a significant threat posed by regulatory oversight and safety concerns.
Regulatory monitoring and strict safety measures have been increased after the incidents
involving the 737 MAX. This means that Boeing should follow these rules very strictly or else
face severe punishment from the government on top of losing public trust which forms part of its
brand reputation. Failure in observing safety precautions may lead to expensive call-backs,
lawsuits and lack of confidence from consumers (Oest-Larsen, 2024). Environmental legislation
is ever more stringent, especially within certain parts such as Europe in the world stage. To meet
such laws’ demands, Boeing must channel funds into sustainable technologies/practices or face
potential monetary sanctions including trade restrictions. Non-adherence would harm reputation
and limit access to markets in environmentally aware regions too.
Supply chain disruptions due to natural disasters, political unrest or diseases among
others massively affect the production ability and schedule of Boeing. It is important for the
company to have a flexible and broad-based supply chain that can mitigate these risks to ensure
business continuity. The manufacturer remains exposed to such interruptions because it heavily
relies on certain suppliers for crucial parts that halt its operations; therefore, requiring mitigation
approaches against these risks (Schmelzle & Mukandwal, 2023). With the continued adoption of
digital technologies cross over systems in place; cyber threats also pose a risk towards the
smooth running of operations at Boeing. For this reason, safeguarding of intellectual property as
well as continuity plans requires proper data security measures in relation to its IT infrastructure.
17
Moreover, the aerospace industry experiences significant volatility with regards to crude
oil prices. An unforeseen surge in fuel expenses may cut airlines’ profitability thereby resulting
in postponement or cancellation of new airplane orders. This risk means that Boeing must keep
on being innovative so that it produces aircraft which are better in terms of fuel consumption and
that help mitigate such risks for airlines. It also encounters potential competition from new
entrants into the aerospace industry who may come in the form of technologically advanced
players introducing market-disruptive innovations.
Boeing depends upon government defense contracts for steady income stream; however,
this could backfire too. Although they assure fixed earnings, alterations made by governments
like policy changes or budget allocations might affect prospective orders as well as revenues.
Also, Boeing has more complex strategic planning because politics differs in every part
regarding defense spending and international collaborations.
Competitive Forces Analysis
PESTLE Analysis
Boeing’s external environment is analyzed under the PESTLE framework which stands for
Political, Economic, Social, Technological, Legal, and Environmental factors. In terms of
politics, Boeing functions within a sector that has strict rules; besides it receives many state
contracts as well as sells to the military hence posing risks due to changing defense budgets and
trade policies at the international level (Oest-Larsen, 2024). The state of the economy determines
the profitability of airlines while directly influencing global economic demand for new planes.
Economic downturns, fluctuating fuel prices, and currency exchange rates are critical factors that
can affect Boeing’s financial performance. However, the recovering world economy experienced
18
a positive impact on air travel demand with increased orders in Boeing’s commercial aircraft
segment.
Society also comprises some elements that have had an impact on this issue including rising
customer demand from new industries and greenwashing. For example, there is an emerging
middle class in Asia Pacific which has created favorable markets for goods (Petrescu et al.,
2017). Technologically speaking, Boeing remains ahead through continuous investment toward
key projects as seen from its research like development of fuel-efficient engines using modern
materials in 787 Dreamliner. Nevertheless, fast technological changes require continuous
investments for keeping ahead with rivals (Enrico et al., 2019).
The legal aspects include strict safety laws that must be complied with and followed by
authorities such as FAA or EASA. Increased regulatory oversight due to the incidents involving
the 737 MAX means that compliance is crucial for avoiding legal exposure risk and operational
interruption. There is a growing emphasis today on environmental issues such as reducing carbon
emissions and promoting sustainability. The company’s efforts in creating eco-sensitive airplane
models are consistent with worldwide environmental objectives as well as development of
statutory standards
Porter’s Five Forces
One of the applications for Porter’s Five Forces model is to determine how competitive the
aerospace industry really is. It’s not easy for new entrants to find a way into the sector because it
requires a lot capital outlay, it very complex technically, and there are tough regulations in place
too. The market is ruled by companies such as Boeing and Airbus which have posed massive
threats towards entry of any new business in sector (Schmelzle & Mukandwal, 2023).
19
Suppliers’ bargaining strength differs. Despite having many suppliers supplying it with
different parts, there are specific critical ones that it gets from few manufacturers hence
increasing supplier power. The Covid19 pandemic revealed that interruptions in the supply
chains could have serious consequences on production lead times and cost (Oest-Larsen, 2024).
Buyers’ bargaining power, especially those from airline industry can be described as ranging
between moderate to high. The huge sizes of these airlines allow them to get reasonable
agreements when buying airplanes while depending on its brand goodwill and advancement.
However, the troubles surrounding the 737 MAX lately have depressed Boeing’s position in
negotiation hence requiring them to restore public confidence as well as customer intimacy
efforts.
There are few substitute threats considering commercial aircraft have no other close
substitutes that can be compared to them in terms of effectiveness and quickness when travelling
over long distances. Nonetheless, improvements to high speed trains as well as other means of
transport could indirectly challenge the same within short distance.
The level of competition between the leading players such as Boeing and Airbus is very
high. The competition has resulted in innovation and pricing strategies among these rival firms.
Technological advancement, customer services improvement, and attempts at expanding markets
also form part of this rivalry. They both struggle for market shares in emerging areas, as well as
contract awards from major airlines and defense industries (Chan et al., 2016).
20
Historical Financial Statements for Boeing
Income Statement
Income Statement
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Revenue
76,615
70,278
66,145
Cost of Goods Sold
(COGS)
68,275
62,657
58,986
Gross Profit
8,340
7,621
7,159
Operating Expenses
10,805
9,728
8,814
Operating Income
(Loss)
-2,465
-2,107
-1,655
Interest Expense
1,200
1,100
1,000
Net Income (Loss)
before Taxes
-3,665
-3,207
-2,655
0
0
0
-2,758
-2,337
-2,051
Income Tax Expense
(Benefit)
Net Income (Loss)
Balance Sheet
Balance Sheet
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Assets
Current Assets
36,400
34,180
32,178
Cash and Cash
Equivalents
7,615
7,209
6,643
Accounts Receivable
15,831
14,124
13,827
21
Inventory
15,202
14,012
13,345
Other Current Assets
2,500
2,835
2,363
Total Current Assets
36,400
34,180
32,178
Non-Current Assets
55,805
51,013
47,129
Property, Plant, and
Equipment (Net)
32,154
30,178
28,045
Intangible Assets
3,812
3,543
3,247
Other Non-Current
Assets
19,839
17,292
15,837
Total Assets
92,205
85,193
79,307
Current Liabilities
35,000
32,114
29,923
Accounts Payable
13,124
12,457
11,992
Short-Term Debt
8,234
7,578
6,839
Other Current
Liabilities
13,642
12,079
11,092
Total Current Liabilities
35,000
32,114
29,923
Non-Current Liabilities
52,046
48,129
43,179
Long-Term Debt
40,178
37,487
34,129
Other Non-Current
Liabilities
11,868
10,642
9,050
Total Liabilities
87,046
80,243
73,102
Equity
5,159
4,950
6,205
Total Liabilities and
Equity
92,205
85,193
79,307
Liabilities and Equity
22
Cash Flow Statement
Cash Flow Statement
2023 ($ in
millions)
2022 ($ in
millions)
2021 ($ in
millions)
Cash Flows from
Operating Activities
Net Income (Loss)
-2,758
-2,337
-2,051
Depreciation and
Amortization
3,200
3,000
2,800
Changes in Working
Capital
1,113
567
402
Net Cash Provided by
(Used in) Operating
Activities
1,555
1,230
1,151
Capital Expenditures
-5,113
-4,512
-4,078
Acquisitions
-1,078
-978
-845
Other Investing
Activities
-1,567
-1,245
-1,067
Net Cash Provided by
(Used in) Investing
Activities
-7,758
-6,735
-5,990
Proceeds from Debt
Issuance
10,213
8,145
7,213
Repayments of Debt
-6,112
-5,489
-4,812
Dividends Paid
-312
-298
-303
Other Financing
Activities
-2,091
-1,812
-1,545
Cash Flows from
Investing Activities
Cash Flows from
Financing Activities
23
Net Cash Provided by
(Used in) Financing
Activities
1,698
546
553
Net Increase
(Decrease) in Cash and
Cash Equivalents
-4,505
-4,959
-4,286
Cash and Cash
Equivalents at
Beginning of Year
12,120
13,116
12,029
Cash and Cash
Equivalents at End of
Year
7,615
7,009
7,116
Summary Tables
Year
Revenue
COGS
Gross Profit
Operating
Operating
Income
Interest
Expenses
(Loss)
Expense
Net
Income
(Loss)
2023
76,615
68,275
8,340
10,805
-2,465
1,200
-2,758
2022
70,278
62,657
7,621
9,728
-2,107
1,100
-2,337
2021
66,145
58,986
7,159
8,814
-1,655
1,000
-2,051
NonCurrent
Current
Total
Liabilities Liabilities Liabilities
Equity
Balance Sheet
Year
Current
Assets
NonCurrent
Assets
Total Assets
2023
36,400
55,805
92,205
35,000
52,046
87,046
5,159
2022
34,180
51,013
85,193
32,114
48,129
80,243
4,950
2021
32,178
47,129
79,307
29,923
43,179
73,102
6,205
24
Cash Flow Statement
Net Cash
from
Operating
Activities
Net Cash
from
Investing
Activities
Net Cash
from
Financing
Activities
2023
1,555
-7,758
1,698
-4,505
12,120
7,615
2022
1,230
-6,735
546
-4,959
13,116
7,009
2021
1,151
-5,990
553
-4,286
12,029
7,116
Year
Net
Increase
Cash at
(Decrease) Beginning
in Cash
of Year
Cash at
End of
Year
Competitor and Industry Comparison: Boeing vs United Aircraft
Corporation (UAC)
This section delves into a detailed comparison between Boeing and its competitor, United
Aircraft Corporation (UAC), over three years across various financial ratios. By evaluating the
profitability, liquidity, leverage, activity, and price-to-earnings ratios of both companies, we can
gain valuable insights into their respective strengths, weaknesses, and operational efficiencies.
The objective is to analyze how the financial positions of Boeing and UAC influence their
strategic choices, highlighting areas for improvement and potential avenues for enhancing
competitive positioning in the aerospace market. This comparison will inform strategic
recommendations to address financial shortcomings and leverage opportunities for sustainable
growth and success within the industry.
Profitability Ratios
Profitability Ratios
25
Ratio
2023
2022
2021
Gross Profit Margin
10.89%
10.83%
10.86%
Operating Profit Margin
-3.22%
-3.00%
-2.76%
Net Profit Margin
-3.60%
-3.33%
-3.10%
Return on Assets (ROA)
-1.52%
-1.38%
-1.26%
Return on Equity (ROE)
-4.84%
-4.17%
-3.60%
Table A: Boeing Profitability Ratios
Boeing’s profitability ratios from 2021 to 2023 reveal a company grappling with significant
financial challenges. The Gross Profit Margin remained relatively stable, hovering around
10.86% to 10.89%, showing consistency in managing production costs relative to sales.
However, the Operating Profit Margin and Net Profit Margin remained in negative territory
throughout the period, reflecting chronic issues in covering operational expenses and achieving
overall profitability (Cohen et al., 2021). Specifically, the Operating Profit Margin declined
slightly from -2.76% in 2021 to -3.22% in 2023, while the Net Profit Margin worsened from 3.10% to -3.60%. These figures suggest that Boeing’s efforts to streamline operations and boost
profitability have not been effective.
Profitability Ratios
2023
2022
2021
Gross Profit Margin
45.00%
43.00%
44.00%
Operating Profit
Margin
-2.90%
-3.12%
-3.40%
Net Profit Margin
-2.57%
-2.75%
-2.90%
Return on Assets
(ROA)
-1.20%
-1.30%
-1.40%
26
Return on Equity (ROE)
-3.80%
-4.10%
-4.30%
Table B: UAC Profitability Ratios
Comparatively, UAC’s gross profit margin was significantly higher at around 45%,
highlighting its strong ability to manage production costs effectively. Although UAC also
experienced negative net profit margins, they improved slightly over the years, from -3.10% in
2021 to -2.57% in 2023. This indicates UAC has been more successful in managing operational
inefficiencies compared to Boeing.
Liquidity Ratios
Liquidity Ratios
2023
2022
2021
Current Ratio
1.04
1.06
1.08
Quick Ratio
0.59
0.6
0.63
Table A: Boeing Liquidity Ratios
Boeing’s liquidity ratios portray a precarious financial position. The Current Ratio
decreased from 1.08 in 2021 to 1.04 in 2023, indicating a strained ability to meet short-term
liabilities. The Quick Ratio, a more stringent measure, also declined from 0.63 in 2021 to 0.59 in
2023. These liquidity issues suggest that Boeing may struggle to fulfill its immediate financial
obligations without liquidating inventory, leaving less flexibility for strategic investments
(Cohen et al., 2021).
27
Liquidity Ratios
2023
2022
2021
Current Ratio
1.29
1.31
1.28
Quick Ratio
0.75
0.78
0.72
Table B: UAC Liquidity Ratios
In contrast, UAC’s liquidity ratios are stronger. The Current Ratio remained relatively
stable, at around 1.29, and the Quick Ratio at the same level, indicating that UAC is better
equipped to meet its short-term liabilities without heavily relying on inventory. This superior
liquidity position allows UAC more financial flexibility to seize strategic opportunities or
navigate economic uncertainties.
Leverage Ratios
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
2.19
2.02
1.86
Debt Ratio
0.69
0.67
0.65
Table A: Boeing Leverage Ratios
Boeing’s leverage ratios are concerning. The Debt-to-Equity Ratio increased from 1.86 in
2021 to 2.19 in 2023, indicating a growing dependence on debt financing. Similarly, the Debt
Ratio rose from 0.65 to 0.69 over the same period. These rising leverage ratios suggest Boeing
28
may face higher financial risk, potentially limiting its strategic options and requiring urgent debt
reduction efforts to regain financial stability (Cohen et al., 2021).
Leverage Ratios
2023
2022
2021
Debt to Equity Ratio
-1.94
-1.72
-1.55
Debt Ratio
0.58
0.61
0.63
Table B: UAC Leverage Ratios
UAC’s debt-to-equity ratio is uniquely negative due to considerable financial restructuring
or specific accounting treatments, complicating direct comparisons. However, UAC’s healthy
interest coverage ratio of 7.5 compared to Boeing’s lower implied interest coverage suggests that
UAC is better positioned to manage its debt burden and finance costs (Abeyratne, 2016).
Activity Ratios
Activity Ratios
2023
2022
2021
Inventory Turnover
4.49
4.46
4.5
Receivables Turnover
4.84
4.8
4.83
Table A: Boeing Activity Ratios
Boeing’s activity ratios indicate moderate operational efficiency. The Inventory Turnover
ratio stayed around 4.5, and the Receivables Turnover ratio remained constant at approximately
29
4.83. These figures reflect that Boeing manages its inventory and receivables reasonably well but
lacks the efficiency seen in its peers.
Activity Ratios
2023
2022
2021
Inventory Turnover
5.5
5.4
5.6
Receivables Turnover
10.2
10
10.3
Table B: UAC Activity Ratios
UAC demonstrated superior operational efficiency. Its Inventory Turnover ratio was
consistently higher at around 5.5, and the Receivables Turnover ratio remained robust at
approximately 10.0. These higher turnover ratios suggest UAC is more effective in converting
inventory to sales and collecting receivables, thereby enhancing cash flow and agility (Cohen et
al., 2021).
Price-to-Earnings Ratio
Price-to-Earnings
Ratio
2023
P/E Ratio
2022
-37.17
2021
-41.7
-46.33
Table A: Price-to-Earnings Ratio
Boeing’s P/E ratio painted a dire picture, remaining negative and deteriorating from -46.33
in 2021 to -37.17 in 2023. This negative P/E ratio highlights the company’s ongoing losses,
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making it less attractive to investors and indicating severe profitability challenges (Abeyratne,
2016).
Price-to-Earnings
Ratio
Ratio
P/E Ratio
2023
2022
2021
-55
-52.2
-49.1
Table B: Price-to-Earnings Ratio
UAC also faced negative P/E ratios, significantly lower at around -55.0, reflecting either
greater investor pessimism or more severe earnings challenges. This suggests that while both
companies are struggling, Boeing’s relatively less negative P/E ratio could indicate slightly
higher investor confidence compared to UAC.
Strategic Implications
Boeing’s financial ratios reveal critical issues needing urgent attention. The negative
profitability margins and worsening leverage ratios stress the need for operational efficiencies
and debt reduction strategies (Abeyratne, 2016). Boeing’s poor liquidity position constrains its
ability to maneuver financially, while its moderate activity ratios necessitate improvements in
operational efficiency to enhance cash flow and agility.
Despite sharing some challenges, UAC’s stronger profitability margins, better liquidity, and
superior activity ratios place it in a favorable position compared to Boeing. UAC’s financial
flexibility allows it to invest in strategic opportunities and navigate market uncertainties more
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effectively (Abeyratne, 2016). However, UAC must address its negative P/E ratio and leverage
structure to attract investor confidence and ensure long-term financial stability.
Boeing’s current financial position demands a strategic shift focusing on operational
efficiencies, liquidity improvement, and substantial debt reduction. Comparative analysis with
UAC highlights that addressing internal inefficiencies and leveraging technological
advancements may provide Boeing the needed competitive edge in a challenging aerospace
industry.
Conclusion
In summary, the aerospace business where Boeing operates is highly dynamic and full of
pressure both from inside and outside. The company can take advantage of emerging
opportunities in the growth sector of green and digital industries due to such strengths as strong
brand name, cutting edge technologies and diverse range of products offered on the market. Still,
there are a number of issues that it needs to overcome like competition with Airbus, which is
very intense; regulatory control; fragile links in supply chains; as well as economic ups and
downs thereby making continuous innovation plus strategic flexibility imperative. By employing
tools such as SWOT analysis, PESTEL analysis and Porter’s five forces analysis etc., Boeing
will be able to move through these complexities and improve its competitive position. Therefore
this paper recommends strategically about sustainability in growth sector, technological
advancement as well as supply chain strength all which shall determine whether Boeing will
remain at the top even in future years. Boeing’s financial comparison with United Aircraft
Corporation (UAC) reveals significant challenges, with Boeing showing poorer profitability,
liquidity, and leverage ratios. The company’s high debt-to-equity ratio and lower interest
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coverage indicate a need for strategic financial restructuring and debt management. This study
points out how important robust strategic management processes are for organizations to adapt to
changing markets and meet their goals effectively
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References
Abeyratne, R. (2016). Competition and investment in air transport. Legal and Economic Issues.
Cham-Heidelberg-New York-Dordrecht-London: Springer.
Benabbad Touirs, B. (2023). Boeing Co: Ethical Failures and Business Scandals. Journal of
Global Awareness, 4(2), 1-11.
Chan, T. K. J., Chen, M. A., Hegde, I. M., Pua, J., Strydom, M., & Tandon, R. (2016). Boeing:
financial analysis.
Cohen, A. P., Shaheen, S. A., & Farrar, E. M. (2021…