Posted: February 24th, 2023
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Scenario
A presidential election year is on the horizon. Control of the White House may shift political parties. Whenever there is potential for a shift in political parties, defense spending could end up being reduced. You are presently a support analyst for a financial fund administrator with an extensive amount of money invested in the Boeing Corporation, a publicly traded company. Part of Boeing’s operations are in defense contracting, such as the manufacturing of military aircraft and helicopters. You must evaluate the current stability of Boeing to determine whether to recommend moving money from this investment to another investment.
Instructions
Write a management report to your fund administrator that:
Explains the different liquidity, profitability, and solvency ratios that are used to assess the financial health of a corporation.
Computes the liquidity, profitability, and solvency ratios using the 2018 Boeing Corporation’s financial statements.
Computes the liquidity, profitability, and solvency ratios of Airbus, a passenger plane competitor, using the 2018 financial statements.
Compares and contrasts the financial ratios of Boeing and Airbus.
Provides a recommendation, supported by the ratio calculations, as to whether you believe Boeing is stable enough compared to the competitor that if defense funding is reduced, the company will continue to prosper.
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