S&S Air, Inc

2009 Balance Sheet

Assets Liabilities & equity
Current assets Current liabilities
Cash 365,040 Accounts payable 715,680
Accounts recieveable 1,534,680 Notes payable 1,446,400
Inventory 1,238,500 Total current liabilities 2,162,080
Total current assets ###
Fixed assets
Net plant and quipmen12,315,220 Long-term debt 3,825,000
shareholder quity
common stock 150,000
retained earnings 9,316,820
total equit 9,466,820
Total assets 15,453,900 Total liabilities and qu 15,453,900
 S&S Air, Inc
2009 Income Statement

Sales $ 20,077,000
Cost of Goods Sold 14,985,000
Other Expenses 2,399,000
Depreciation $ 655
EBIT 2,038,000
Interest $ 362,000
Taxable income 1,676,000
Taxes (40%) $ 670,400
Net income 1,005,600
Dividends $ 205,000
Add to retained earnings 800,600
 S&S Air, Inc.
Financial Ratios

Short term solvency ratios

Current Ratio
Quick Ratio
Cash Ratio
Asset Utilization or Turnover ratios
Average Collection Period
Inventory Turnover Ratios
Receivable Turnover
Total Asset Turnover
Financial Leverage ratios
Total Debt Ratio (TD/TA)
Debt/Equity
Equity Ratio (TE/TA)
Times Interest Earned Ratio (EBIT/TI) there are no interes
Profitability ratios
ROA (NI/TA)
ROE (NI/TE)
Other
Cash Coverage Ratio
Profit Margin
 S&S Air, Inc.
Financial Ratios

Current Assets/Current Liabilities 3138220 2162080 1.4514819

Current Assets - Inventory/Current Liabilities 1899720 2162080 0.8786539
Cash/Current Liabilities 365040 2162080 0.1688374

Accounts Receivable/(Sales / 360)

Total Revenues/Inventory 20077000 1238500 16.210739
Total Revenues/Accounts Receivable 20077000 1534680 13.082206
Total Revenues/Total Assets 20077000 15453900 1.2991543

(Total Asset - Total Equity )/Total Assets 5987080 15453900 0.3874155

Total Debt/Total Equity 5987080 9466820 0.6324278
Total Equity/Total Assets 9466820 15453900 0.6125845
EBIT/Total Interest Payments 2038000 362000 5.6298343

Net Income/Total Assets 1005600 15453900 0.065071

Net Income / Total Equity 1005600 9466820 0.1062236

(EBIT + Depreciation ) / Interest 2693000 362000 7.4392265

Income / Sale 1005600 20077000 0.0500872
In the present scenario, Mark and Todd have chosen Boeing as an aspirant company to undertake the ratio analysis. T

1. Size of Business
Although S&S and Boeing operate in the same industry, manufacturing airplane, the sizes of these tow companies are
2. Differing Business Operations and Nature of Business
Boeing is having a diverse business processes that include manufacturing commercial aircrafts, defense and aeronauti

3. Differing Market
Comparatively, the sizes of the products and the target markets for these two companies are different. Boeing, for exa
undertake the ratio analysis. The decision might not be suitable for S&S Air Inc due to a variety of reasons that three of them are

es of these tow companies are not the same. Boeing is having comparatively large size operations, which can create different, no

ircrafts, defense and aeronautics. But, S&S manufactures light airplanes for recreational, mostly.

are different. Boeing, for example, manufactures large aircrafts, mostly for commercial purposes; while S&S, on the other hand
sons that three of them are as follow:

ich can create different, not equal, ratio comparison between these two airplane manufacturing companies. Therefore, Boeing is

ile S&S, on the other hand, manufactures small airplanes targeting a different market. Furthermore, Boeing a very well-know an
mpanies. Therefore, Boeing is not a good choice for performance comparison.

, Boeing a very well-know and established company in the aircraft industry targeting global airline industry. On the contrary, ‘S&
industry. On the contrary, ‘S&S runs operations by targeting and satisfying the demand for recreational aircrafts.
Ratios S&S

Short term solvency ratios %

Current Ratio 1.45
Quick Ratio 0.88
Cash Ratio 0.17
Asset Utilization or Turnover ratios
Inventory Turnover Ratios 16.21
Receivable Turnover 13.08
Total Asset Turnover 1.30
Financial Leverage ratios
Total Debt Ratio (TA-TE/TA) 0.39
Debt/Equity Ratio 0.63
Equity Ratio (TA/TE) 0.61
Times Interest Earned Ratio (EBIT/TI) there are no i 5.63
Profitability ratios
ROA (NI/TA) 0.07
ROE (NI/TE) 0.11
Other
Cash Coverage Ratio 7.44
Profit Margin 0.05
Industry Median Comparison and comments

% %
1.43 Whereas the currents ratio means how many dollars has in assets to one dollar in liabability, the co
0.84 The figures show that the company is in a better short-term liquidity position and can better meet
0.21 Both have enough cash to their liabilities. they almost perform similarly in this regard.

6.15 unlike the other ratios where S&S Air is doing better, the inventory turnover is worse compared to
9.82 Again, the industry is doing much better in receiveable turnover; it collects it recieveables in 9.82 d
0.85 It shows the company is having more dollars in sales for every dollar in asset, in compared with the

0.52 The figures show that company has relies less on debt. It has .39 in debt for every dollar in assets,
1.08 The figure positive to the company rather than to the industry. Meaning the company has less fina
2.08 The figure is way more positive for the industry. Meaning the industry has more equity to finance i
8.06 Here, the industy is doing better than the company. The company's earnings cover more than five

10.53 The company's and the industry's performances are almost not comparable. To clarify, the industry
16.54 Performing good, the company is in less financial level than the industry.

8.43 The industry's median cash coverage ratio is somehow similar to the company's. They both do wel
5.15 The industry is making way more profit in sales compared to the industry. The company only make
e dollar in liabability, the comparison of S&S Air, Inc shows that it has more dollars than the average/median of the whole industry which m
sition and can better meet its short-term obligations with its most liquid assets in compared with the industry.
in this regard.

over is worse compared to the industry. Clarifying, while the industy finish their inventory in less than 7 days a month, the company, S&S A
ects it recieveables in 9.82 days. The S&S Air company, on the other hand, is collecting its credit sales in more than 13 days.
asset, in compared with the industry.

t for every dollar in assets, which the figure is great for industry.
g the company has less financial leverage, in compared to the industry.
as more equity to finance its assets. But, the company doesn't have to much
nings cover more than five times its interest, while, on the other side, the industry's earnings can cover more than eight times their interes

able. To clarify, the industry generates 10.53 dollars in profit for every dollar in asset; the S&S Air company generates only 7 pennies in pro

mpany's. They both do well in generating cash from their operations

ry. The company only makes 0.05-dollar profit in its sales, while the industry makes five times more than the company.
an of the whole industry which makes the company more trusted and long-living.

ys a month, the company, S&S Air, finish their inventory in more than 16 days on a monthly basis.
re than 13 days.

re than eight times their interests.

generates only 7 pennies in profit for every dollar in asset.

he company.
 References:

w. Stanley. & R. Amir. (year, N/A). Boeing Company. Britanica. Retrieved from:
https://www.britannica.com/topic/Boeing-Company

Wikipedia. (year, N/A). Boeing. Retrieved from: https://en.wikipedia.org/wiki/Boeing

Ration Analysis. (year, N/A). Researchmotic. Retreived from: http://www.researchomatic.com/ratio-

analysis
eing

omatic.com/ratio-