Case Analysis Of Boeing And Boeing

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Boeing is a very interesting company. Boeing may only be one company but they compete in two different markets: commercial airlines and the defense industry. The main competition in the commercial airline market is Airbus. Airbus and Boeing seem to have the commercial airline industry in a chokehold basically having no other competitors. Since the industry has high barriers to entry they will not see much competition anytime soon. Boeing is the American leader in commercial airplanes and Airbus is the European leader, which means they are constantly battling. Their competing aircrafts are the Airbus A380 and the Boeing 747. Both companies have many variations of their respected aircraft and according to Business Insider, Airbus’ A380 outranks …show more content…

This ratio is the revenue divided the total number of employees multiplied by 40 hours a week and 52 weeks in a year. This analyzes how much money each employee produces in revenue each hour. Boeing reaches a ratio of $294.47 juxtaposed with an Industry Average of $224.36. Boeing is getting $70.10 more per employee each hour compared to the Industry. Financial leverage ratio that is the most appropriate is the Debt to Equity Ratio. The Debt to Equity ratio measures the amount of debt a company uses to finance their assets relative to the amount of shareholder’s equity. The higher the debt to equity the more debt is used to finance the business. Boeing obtained a ratio of 1.5728 and the Industry has a 1.7587 or in other words Boeing uses 18.59% less debt to finance their company. Finally, the DuPont Analysis gives an in-depth look into the how much money a company’s assets generate and how much debt a company uses to get returns. This ratio decomposes ROE and ROA in order to determine whether Financial Leverage, Asset Turnover, or Profit Margin increase the two ratios. In the case of the Industry, when financial leverage goes up then the ratios increase meaning that if a company in this industry funds its assets with less equity then their returns will improve

In this essay, the author

  • Explains that boeing is a very interesting company, but they compete in two different markets: commercial airlines and the defense industry. airbus and boeing have high barriers to entry, which means they are constantly battling.
  • Explains that boeing's defense market is more complex than their commercial airline market. lockheed martin and raytheon create joint ventures because the defense industry requires a diverse product mix that one company may not be able to fulfill.
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