Asef Khademi - 3.xlsx

S&S Air, Inc 2009 Balance Sheet Assets Current assets Cash 365,040 Accounts recieveable 1,534,680 Inventory 1,238,500 Total current assets ### Fixed assets Net plant and quipmen12,315,220

Total assets

15,453,900

Liabilities & equity Current liabilities Accounts payable Notes payable Total current liabilities

Long-term debt shareholder quity common stock retained earnings total equit Total liabilities and qu

715,680 1,446,400 2,162,080

3,825,000 150,000 9,316,820 9,466,820 15,453,900

S&S Air, Inc 2009 Income Statement Sales Cost of Goods Sold Other Expenses Depreciation EBIT Interest Taxable income Taxes (40%) Net income Dividends $ Add to retained earnings

$

20,077,000 14,985,000 2,399,000 655 2,038,000 362,000 1,676,000 670,400 1,005,600

$ $ $ 205,000 800,600

S&S Air, Inc. Financial Ratios Short term solvency ratios Current Ratio Quick Ratio Cash Ratio Asset Utilization or Turnover ratios Average Collection Period Inventory Turnover Ratios Receivable Turnover Total Asset Turnover Financial Leverage ratios Total Debt Ratio (TD/TA) Debt/Equity Equity Ratio (TE/TA) Times Interest Earned Ratio (EBIT/TI) there are no interes Profitability ratios ROA (NI/TA) ROE (NI/TE) Other Cash Coverage Ratio Profit Margin

S&S Air, Inc. Financial Ratios

Current Assets/Current Liabilities Current Assets - Inventory/Current Liabilities Cash/Current Liabilities Accounts Receivable/(Sales / 360) Total Revenues/Inventory Total Revenues/Accounts Receivable Total Revenues/Total Assets

3138220 1899720 365040

2162080 1.4514819 2162080 0.8786539 2162080 0.1688374

20077000 20077000 20077000

1238500 16.210739 1534680 13.082206 15453900 1.2991543

(Total Asset - Total Equity )/Total Assets Total Debt/Total Equity Total Equity/Total Assets EBIT/Total Interest Payments

5987080 5987080 9466820 2038000

15453900 9466820 15453900 362000

Net Income/Total Assets Net Income / Total Equity

1005600 1005600

15453900 0.065071 9466820 0.1062236

2693000 1005600

362000 7.4392265 20077000 0.0500872

(EBIT + Depreciation ) / Interest Income / Sale

0.3874155 0.6324278 0.6125845 5.6298343

In the present scenario, Mark and Todd have chosen Boeing as an aspirant company to undertake the ratio analysis. T

1. Size of Business Although S&S and Boeing operate in the same industry, manufacturing airplane, the sizes of these tow companies are 2. Differing Business Operations and Nature of Business Boeing is having a diverse business processes that include manufacturing commercial aircrafts, defense and aeronauti

3. Differing Market Comparatively, the sizes of the products and the target markets for these two companies are different. Boeing, for exa

undertake the ratio analysis. The decision might not be suitable for S&S Air Inc due to a variety of reasons that three of them are

es of these tow companies are not the same. Boeing is having comparatively large size operations, which can create different, no

ircrafts, defense and aeronautics. But, S&S manufactures light airplanes for recreational, mostly.

are different. Boeing, for example, manufactures large aircrafts, mostly for commercial purposes; while S&S, on the other hand

sons that three of them are as follow:

ich can create different, not equal, ratio comparison between these two airplane manufacturing companies. Therefore, Boeing is

ile S&S, on the other hand, manufactures small airplanes targeting a different market. Furthermore, Boeing a very well-know an

mpanies. Therefore, Boeing is not a good choice for performance comparison.

, Boeing a very well-know and established company in the aircraft industry targeting global airline industry. On the contrary, ‘S&

industry. On the contrary, ‘S&S runs operations by targeting and satisfying the demand for recreational aircrafts.

Ratios Short term solvency ratios Current Ratio Quick Ratio Cash Ratio Asset Utilization or Turnover ratios Inventory Turnover Ratios Receivable Turnover Total Asset Turnover Financial Leverage ratios Total Debt Ratio (TA-TE/TA) Debt/Equity Ratio Equity Ratio (TA/TE) Times Interest Earned Ratio (EBIT/TI) there are no i Profitability ratios ROA (NI/TA) ROE (NI/TE) Other Cash Coverage Ratio Profit Margin

S&S % 1.45 0.88 0.17 16.21 13.08 1.30 0.39 0.63 0.61 5.63 0.07 0.11 7.44 0.05

Industry Median Comparison and comments

% % 1.43 Whereas the currents ratio means how many dollars has in assets to one dollar in liabability, the co 0.84 The figures show that the company is in a better short-term liquidity position and can better meet 0.21 Both have enough cash to their liabilities. they almost perform similarly in this regard.

6.15 unlike the other ratios where S&S Air is doing better, the inventory turnover is worse compared to 9.82 Again, the industry is doing much better in receiveable turnover; it collects it recieveables in 9.82 d 0.85 It shows the company is having more dollars in sales for every dollar in asset, in compared with the 0.52 1.08 2.08 8.06

The figures show that company has relies less on debt. It has .39 in debt for every dollar in assets, The figure positive to the company rather than to the industry. Meaning the company has less fina The figure is way more positive for the industry. Meaning the industry has more equity to finance i Here, the industy is doing better than the company. The company's earnings cover more than five

10.53 The company's and the industry's performances are almost not comparable. To clarify, the industry 16.54 Performing good, the company is in less financial level than the industry.

8.43 The industry's median cash coverage ratio is somehow similar to the company's. They both do wel 5.15 The industry is making way more profit in sales compared to the industry. The company only make

e dollar in liabability, the comparison of S&S Air, Inc shows that it has more dollars than the average/median of the whole industry which m sition and can better meet its short-term obligations with its most liquid assets in compared with the industry. in this regard.

over is worse compared to the industry. Clarifying, while the industy finish their inventory in less than 7 days a month, the company, S&S A ects it recieveables in 9.82 days. The S&S Air company, on the other hand, is collecting its credit sales in more than 13 days. asset, in compared with the industry.

t for every dollar in assets, which the figure is great for industry. g the company has less financial leverage, in compared to the industry. as more equity to finance its assets. But, the company doesn't have to much nings cover more than five times its interest, while, on the other side, the industry's earnings can cover more than eight times their interes

able. To clarify, the industry generates 10.53 dollars in profit for every dollar in asset; the S&S Air company generates only 7 pennies in pro

mpany's. They both do well in generating cash from their operations ry. The company only makes 0.05-dollar profit in its sales, while the industry makes five times more than the company.

an of the whole industry which makes the company more trusted and long-living.

ys a month, the company, S&S Air, finish their inventory in more than 16 days on a monthly basis. re than 13 days.

re than eight times their interests. generates only 7 pennies in profit for every dollar in asset.

he company.

References: w. Stanley. & R. Amir. (year, N/A). Boeing Company. Britanica. Retrieved from: https://www.britannica.com/topic/Boeing-Company

Wikipedia. (year, N/A). Boeing. Retrieved from: https://en.wikipedia.org/wiki/Boeing Ration Analysis. (year, N/A). Researchmotic. Retreived from: http://www.researchomatic.com/ratioanalysis

eing

omatic.com/ratio-