Boeing 2020 10-K Inline XBRL Viewer (sec.gov) Boeing 10-year financial summary and ratios via Morningstar Growth. Profitability, and Financial Ratios for Boeing Co (BA) from Morningstar.com (15 pts) Given the following information, estimate Boeing's cost of capital? Assume the following information about Boeing Beta = 1.5 10-year Treasury yield to maturity (rf) - 1.5% Historical market risk premium (Rm -rf) = 7% Current stock price $208 per share Interest bearing debt $63.63 Share outstanding = 588M . Corporate tax rate - 21% Average cost of debt - 4% 2. (10 pts) Provide a description of Boeing's business. Your goal is to explain what the firm does (no commentary just a description). DO NOT COPY AND PASTE THE DESCRIPTION FROM THE 10-K. 3. (5 pts) How does the firm generate revenue and operating income? You can answer this with a table(s). What are the sources of the firm's revenue and operating income? 4. (15 pts) Examine the last 3 years of sales and operating income data. Briefly discuss THREE significant insights from your answers to the prior two questions that helps understand what the firm does and how it generates cash flows to shareholders. 5. (15 pts) Using the data provided in the Boeing 10-year financial summary and ratios via Morningstar link, provide a table of key ratios (you decide what is important). Discuss the ratios you included and explain why they are important, 6. (10 pts) How has the pandemic affected the firm's operations? 7. (15 pts) Briefly discuss Boeing's payout policy over the last 3 years. Does anything stand out? X (15 pts) Over the last year, Boeing's stock price has traded between $188 and $279. Today the stock is trading at $208. The board is considering two alternatives: (1) issuing additional equity, (2) buying back shares. Given these two choices which alternative should Boeing pursue? Justify your answer (don't hedge). Bonus: (10 pts) Construct Boeing's Proforma Income Statement for 2022 and 2023. Provide basis for understanding your forecast. Explain what you think the next two years (2022 and 2023) are going to look like for Boeing. (Sales, profitability, risks/hurdles to the firm's business, etc.) Ameride Get a compete trading experience Ascending TTM 2020-12 59,158 -9.8 -12,978 25.4 62,797 -0.3 -7,330 -22.3 Boeing Co BA Morningstar Rating Add to Portfoto Get E-mail Alerts Born This Page Dorpen om Quote Chart Stock Analysis Performance Key Ratlos Financials Valuation Insiders Ownership Filings Bonds Financials Export 2011-12 2012-12 2013-12 2004-12 2015-12 2016-12 2017-12 2015-12 2019-12 Revenue uso e 68,735 81,690 86,623 90,752 96,114 $4,571 93,392 101,127 76.559 Gross Margin 18.7 16.0 15.4 18.6 5.8 Operating Income USO I 5,520 6,039 6,328 7.195 7.170 5.538 10,053 11,801 -2,662 Operating Margin% 8.5 7.4 73 7.9 7.5 5.9 10.8 11.7 Net Income USO HII 4,018 3.900 4,585 5.45 5.176 4.895 8.197 10,460 -636 Earnings Per Share USD 5.34 5.11 5.96 7.83 13.85 17.85 Dividends USD 1.68 1.26 1.94 2.92 3.64 4.36 5.66 6.84 8.22 Payout Ratio 33.2 34.4 637 49.4 38.6 120.0 Shares 762 768 695 642 610 586 565 Book Value Per Share USD 8.01 7.76 11.96 20.53 2011 3.38 1.84 -2.27 -7.31 Operating Cash Flow USD 4,023 7,500 8,179 9.353 10,499 13,344 15,322 -2.446 Cap Spending USD -1,713 -1.710 -2,238 2,23 -2450 -2,613 -1,870 -1,791 -1.961 Free Cash Flow USOME 2,310 5.790 5.941 7.886 11.474 13,531 -4,407 Free Cash Flow Per Share USO 0.89 7.63 11.74 1239 12.44 18.23 22.90 1.45 Working Capital USD MI 8,536 12,327 13,553 11.065 17.822 12,354 5,292 5,240 4,917 Indicates Calendar year-end data information -11.7 -8,479 -11,873 -14.88 -20.88 2.06 337 751 737 569 -20.30 584 -24.57 -8,141 - 1.023 -18,410 -1,303 -19,713 -32.20 34,362 -9,164 Key Ratios Cash Flow Financial Health Efficiency Ratios 2013-12 2020-12 TTM 2011-12 100.00 81.28 2012-12 100.00 54.02 2015-12 100.00 100.00 34.56 100.00 5456 2017-12 100.00 51.45 2018-12 100.00 B0:58 2019-12 100.00 94.17 100.00 109.78 100.00 10025 2016-12 100.00 85.43 14.57 3.82 4.89 15.98 18.55 Profitability Growth Margins of Sales Revenue COGS Gross Margin SGSA RAD Other Operating Margin Net Int Inc & Other EST Margin 19.42 1872 4.96 15.42 4.57 15.44 415 14.59 3.67 5.83 5.11 -9.78 8.25 -0.25 7.96 4.55 4.52 4.04 3.55 2.36 3.40 3.23 4.20 4.26 3.47 5.70 -0.40 147 7.39 7.31 7.46 10.76 11.67 -1.45 -22.32 -11.67 7.33 -0.02 5.56 0.03 -0.16 -0.01 -0.19 -2.59 -0.62 7.85 -0.11 7.39 0.53 -2.95 -2.58 -24.89 7.56 7.44 5.89 10.76 11.47 -14.27 2012-12 2013-12 2010-12 2020-12 TTM 2011-12 25.63 2013-12 26.41 9.86 2014-12 23.65 599 0.95 33.96 4.76 0.97 27.66 5.38 0.99 S.BS 0.93 2017-12 18.41 8.77 1.02 2016-12 12.09 5.17 1.03 5.31 -13.50 -0.83 0.61 10.34 0.96 9.97 -20.42 0.40 0.95 Profitability Tax Rate Net Margins Asset Turnover (Average) Return on Assets Financial Leverage (Average) Return on Equity Return on invested Capital Interest Coverage 0.41 5.00 5.52 8.98 -0.51 -8.31 -5.50 5.41 22.76 4.61 15.15 5.34 14.90 20.09 346.19 127.94 28 25 11.83 82.97 26.10 44.14 23.84 46.22 2696 22:43 68.96 31.56 110.16 136.80 38.13 8482 76.30 28.91 13.76 17.15 27.02 19.20 25.43 -2.13 -5.71 -2.29 Boeing 2020 10-K Inline XBRL Viewer (sec.gov) Boeing 10-year financial summary and ratios via Morningstar Growth. Profitability, and Financial Ratios for Boeing Co (BA) from Morningstar.com (15 pts) Given the following information, estimate Boeing's cost of capital? Assume the following information about Boeing Beta = 1.5 10-year Treasury yield to maturity (rf) - 1.5% Historical market risk premium (Rm -rf) = 7% Current stock price $208 per share Interest bearing debt $63.63 Share outstanding = 588M . Corporate tax rate - 21% Average cost of debt - 4% 2. (10 pts) Provide a description of Boeing's business. Your goal is to explain what the firm does (no commentary just a description). DO NOT COPY AND PASTE THE DESCRIPTION FROM THE 10-K. 3. (5 pts) How does the firm generate revenue and operating income? You can answer this with a table(s). What are the sources of the firm's revenue and operating income? 4. (15 pts) Examine the last 3 years of sales and operating income data. Briefly discuss THREE significant insights from your answers to the prior two questions that helps understand what the firm does and how it generates cash flows to shareholders. 5. (15 pts) Using the data provided in the Boeing 10-year financial summary and ratios via Morningstar link, provide a table of key ratios (you decide what is important). Discuss the ratios you included and explain why they are important, 6. (10 pts) How has the pandemic affected the firm's operations? 7. (15 pts) Briefly discuss Boeing's payout policy over the last 3 years. Does anything stand out? X (15 pts) Over the last year, Boeing's stock price has traded between $188 and $279. Today the stock is trading at $208. The board is considering two alternatives: (1) issuing additional equity, (2) buying back shares. Given these two choices which alternative should Boeing pursue? Justify your answer (don't hedge). Bonus: (10 pts) Construct Boeing's Proforma Income Statement for 2022 and 2023. Provide basis for understanding your forecast. Explain what you think the next two years (2022 and 2023) are going to look like for Boeing. (Sales, profitability, risks/hurdles to the firm's business, etc.) Ameride Get a compete trading experience Ascending TTM 2020-12 59,158 -9.8 -12,978 25.4 62,797 -0.3 -7,330 -22.3 Boeing Co BA Morningstar Rating Add to Portfoto Get E-mail Alerts Born This Page Dorpen om Quote Chart Stock Analysis Performance Key Ratlos Financials Valuation Insiders Ownership Filings Bonds Financials Export 2011-12 2012-12 2013-12 2004-12 2015-12 2016-12 2017-12 2015-12 2019-12 Revenue uso e 68,735 81,690 86,623 90,752 96,114 $4,571 93,392 101,127 76.559 Gross Margin 18.7 16.0 15.4 18.6 5.8 Operating Income USO I 5,520 6,039 6,328 7.195 7.170 5.538 10,053 11,801 -2,662 Operating Margin% 8.5 7.4 73 7.9 7.5 5.9 10.8 11.7 Net Income USO HII 4,018 3.900 4,585 5.45 5.176 4.895 8.197 10,460 -636 Earnings Per Share USD 5.34 5.11 5.96 7.83 13.85 17.85 Dividends USD 1.68 1.26 1.94 2.92 3.64 4.36 5.66 6.84 8.22 Payout Ratio 33.2 34.4 637 49.4 38.6 120.0 Shares 762 768 695 642 610 586 565 Book Value Per Share USD 8.01 7.76 11.96 20.53 2011 3.38 1.84 -2.27 -7.31 Operating Cash Flow USD 4,023 7,500 8,179 9.353 10,499 13,344 15,322 -2.446 Cap Spending USD -1,713 -1.710 -2,238 2,23 -2450 -2,613 -1,870 -1,791 -1.961 Free Cash Flow USOME 2,310 5.790 5.941 7.886 11.474 13,531 -4,407 Free Cash Flow Per Share USO 0.89 7.63 11.74 1239 12.44 18.23 22.90 1.45 Working Capital USD MI 8,536 12,327 13,553 11.065 17.822 12,354 5,292 5,240 4,917 Indicates Calendar year-end data information -11.7 -8,479 -11,873 -14.88 -20.88 2.06 337 751 737 569 -20.30 584 -24.57 -8,141 - 1.023 -18,410 -1,303 -19,713 -32.20 34,362 -9,164 Key Ratios Cash Flow Financial Health Efficiency Ratios 2013-12 2020-12 TTM 2011-12 100.00 81.28 2012-12 100.00 54.02 2015-12 100.00 100.00 34.56 100.00 5456 2017-12 100.00 51.45 2018-12 100.00 B0:58 2019-12 100.00 94.17 100.00 109.78 100.00 10025 2016-12 100.00 85.43 14.57 3.82 4.89 15.98 18.55 Profitability Growth Margins of Sales Revenue COGS Gross Margin SGSA RAD Other Operating Margin Net Int Inc & Other EST Margin 19.42 1872 4.96 15.42 4.57 15.44 415 14.59 3.67 5.83 5.11 -9.78 8.25 -0.25 7.96 4.55 4.52 4.04 3.55 2.36 3.40 3.23 4.20 4.26 3.47 5.70 -0.40 147 7.39 7.31 7.46 10.76 11.67 -1.45 -22.32 -11.67 7.33 -0.02 5.56 0.03 -0.16 -0.01 -0.19 -2.59 -0.62 7.85 -0.11 7.39 0.53 -2.95 -2.58 -24.89 7.56 7.44 5.89 10.76 11.47 -14.27 2012-12 2013-12 2010-12 2020-12 TTM 2011-12 25.63 2013-12 26.41 9.86 2014-12 23.65 599 0.95 33.96 4.76 0.97 27.66 5.38 0.99 S.BS 0.93 2017-12 18.41 8.77 1.02 2016-12 12.09 5.17 1.03 5.31 -13.50 -0.83 0.61 10.34 0.96 9.97 -20.42 0.40 0.95 Profitability Tax Rate Net Margins Asset Turnover (Average) Return on Assets Financial Leverage (Average) Return on Equity Return on invested Capital Interest Coverage 0.41 5.00 5.52 8.98 -0.51 -8.31 -5.50 5.41 22.76 4.61 15.15 5.34 14.90 20.09 346.19 127.94 28 25 11.83 82.97 26.10 44.14 23.84 46.22 2696 22:43 68.96 31.56 110.16 136.80 38.13 8482 76.30 28.91 13.76 17.15 27.02 19.20 25.43 -2.13 -5.71 -2.29