The Boeing Company (BA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.13 | 6.93 | 6.53 | 5.53 | 5.52 |
| Receivables turnover | 25.28 | 29.37 | 26.46 | 23.58 | 29.75 |
| Payables turnover | 6.03 | 5.86 | 6.18 | 6.40 | 4.94 |
| Working capital turnover | 2.15 | 5.78 | 3.42 | 2.34 | 1.69 |
Based on the data provided, we can analyze The Boeing Company's activity ratios as follows:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Boeing's inventory turnover has been relatively stable over the past five years, with a slight increase from 5.52 in 2020 to 6.13 in 2024. This indicates that Boeing is effectively managing its inventory levels and turning over its inventory at a consistent pace.
2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers. Boeing's receivables turnover ratio fluctuated over the five-year period, with a peak of 29.75 in 2020 and a low of 23.58 in 2021. Despite some variability, the ratio generally remained within a reasonable range, indicating that Boeing is efficient in collecting payments from customers.
3. Payables Turnover:
- The payables turnover ratio demonstrates how quickly a company pays its suppliers. Boeing's payables turnover ratio also varied over the years, with a peak of 6.40 in 2021 and a low of 5.86 in 2023. Overall, Boeing has managed its payables effectively, maintaining a consistent turnover ratio, which suggests a balanced approach to managing supplier payments.
4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently a company utilizes its working capital to generate revenue. Boeing's working capital turnover ratio saw significant fluctuations, with a notable increase from 1.69 in 2020 to 5.78 in 2023. This suggests that Boeing improved its efficiency in utilizing its working capital to generate sales during this period, although there was some decline to 2.15 in 2024.
In conclusion, based on the analysis of activity ratios, The Boeing Company appears to have managed its inventory, receivables, payables, and working capital efficiently over the past five years, with some fluctuations but generally maintaining effective turnover ratios.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.58 | 52.67 | 55.87 | 66.00 | 66.10 |
| Days of sales outstanding (DSO) | days | 14.44 | 12.43 | 13.79 | 15.48 | 12.27 |
| Number of days of payables | days | 60.55 | 62.32 | 59.02 | 57.03 | 73.91 |
The activity ratios of The Boeing Company, as indicated by the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the company's efficiency in managing its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH):
- The company's Days of Inventory on Hand slightly decreased over the years, indicating an improvement in inventory management efficiency.
- A decrease in DOH from 66.10 days in 2020 to 52.67 days in 2023 suggests the company has been able to turn over its inventory more quickly.
- However, there was a slight increase in DOH to 59.58 days in 2024, which may indicate a need for closer monitoring of inventory levels and production processes in the future.
2. Days of Sales Outstanding (DSO):
- The company's Days of Sales Outstanding also fluctuated slightly over the years, indicating variations in accounts receivable collection efficiency.
- An increase in DSO from 12.27 days in 2020 to 15.48 days in 2021 might suggest a delay in collecting sales proceeds, affecting cash flow.
- There was a decrease in DSO to 12.43 days in 2023, indicating an improvement in accounts receivable management but a subsequent rise to 14.44 days in 2024, signaling potential challenges in collecting outstanding payments promptly.
3. Number of Days of Payables:
- The Number of Days of Payables decreased from 73.91 days in 2020 to 57.03 days in 2021, but then increased in the following years before stabilizing around 60 days.
- A decrease in days of payables may indicate a more aggressive approach to managing trade credit and paying suppliers promptly.
- However, a consistent level of around 60 days suggests a balance between managing working capital and maintaining good supplier relationships.
In summary, The Boeing Company's activity ratios show improvements in inventory turnover and management of accounts receivable over the years. However, fluctuations in these ratios highlight the importance of continuous monitoring and optimization of operational processes to enhance efficiency and maintain a healthy cash flow position.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.83 | 7.30 | 6.31 | 5.70 | 4.92 |
| Total asset turnover | 0.43 | 0.57 | 0.49 | 0.45 | 0.38 |
The Fixed Asset Turnover ratio for The Boeing Company has shown a positive trend over the years, increasing from 4.92 in 2020 to 5.83 in 2024. This indicates that Boeing has become more efficient in generating sales revenue in relation to its fixed assets, such as property, plant, and equipment.
On the other hand, the Total Asset Turnover ratio has also increased steadily from 0.38 in 2020 to 0.43 in 2024. This suggests that Boeing has improved its overall efficiency in generating revenue in relation to all its assets, including both fixed and current assets.
Overall, the long-term activity ratios for Boeing reflect improvements in asset utilization efficiency over the past five years. This indicates that the company has been able to make better use of its assets to generate sales, which is a positive sign for its operational performance and financial health.