Competency
Evaluate financial ratios to differentiate profitability and liquidity across organizations.
Student Success Criteria
View the grading rubric for this deliverable by selecting the "This item is graded with a rubric" link, which is located in the Details & Information pane.
Scenario
A presidential election year is on the horizon. Control of the White House may shift political parties. Defense spending could be reduced whenever there is potential for a shift in political parties. 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 is in defense contracting, such as manufacturing military aircraft and helicopters. Contrarily, you have decided that if Boeing is not the best investment, a close competitor Airbus has the potential to be a stronger investment. You must evaluate the current stability of Boeing and Airbus to determine whether to recommend moving money from the Boeing investment to the Airbus investment.
Instructions
Write a 2–3-page memo to your fund administrator that includes the following:
- 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.
- Analyzes and provide a recommendation, supported by 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.
NOTE – Be sure the documents display proper grammar, spelling, punctuation, and sentence structure.
Assessment Requirements/Submission Requirement:
A 2–3-page memo in Microsoft Word.
A – 4 – Mastery
Report clearly and accurately explains different liquidity, profitability, and solvency ratios used to assess the financial health of a corporation.
A – 4 – Mastery
Accurately computes liquidity, profitability, and solvency ratios using Boeing's financial statements.
A – 4 – Mastery
Accurately computes liquidity, profitability, and solvency ratios using Airbus's financial statements
A – 4 – Mastery
Astutely and accurately compares and contrasts the financial ratios.
A – 4 – Mastery
Expertly analyzes, using significant supporting detail, whether you believe Boeing is stable compared to Airbus.
