Boeing Board of Directors Briefing on Senior Management Capabilities

This case is to designed to use your knowledge of financial reporting to draw inferences about managements capability. Your group has been hired by the firms Board of Directors to assess the quality of their senior management team. Your group has been selected by the Board of Directors because of your depth of understanding of strategy, financial reporting, and business trends. As a minimum, your group must prepare a fundamental analysis and critique of management of Boeing based upon the available managements assertions, data, and results reported in their most recent 10-K.

Your report to the Board of Directors should include:

Part 1. A brief description and critique of the firms management strategy. (Review MD&A in form 2020 10-K pgs. 24 - 58)

Part 2. Construct and analyze ratios (HMPD definitions) that assess Boeings profitability, liquidity and solvency. As a minimum, you should consider the following ratios:[1]

(1) Profitability

(a) Rate of return on assets (ROA)

(b) Profit margin & asset turnover

(c) Rate of return on common shareholders equity (ROCE)

(2) Liquidity

(a) Current ratio

(b) Quick ratio

(c) Cash flow from operations to current liabilities ratio

(d) Accounts payable turnover ratio

(3) Solvency

(a) Liabilities to assets ratio

(b) Long-term debt ratio

(c) Debt-equity ratio

(d) Cash flow from operations to total liabilities ratio

(e) Interest coverage ratio

What do you conclude about Boeings profitability, liquidity, and solvency under the present leadership team? Part 3. Based upon your results above as well as common size and growth rate analyses, prepare and defend predictions for Boeings:

(1) Growth in sales revenue,

(2) Growth in earnings,

(2) Growth in total assets,

(3) Capital expenditures, and

(4) Financial leverage (long-term debt / total assets) for 2021.

Part 4. Prepare a commentary, critique, and assessment of your Boeings management for the firms Board of Directors as of 12/31/2020.