Week 6 project
Identify and evaluate sources of debt financing
A company's debt, liabilities and risk are very important factors in understanding the company. Boeing Company's total debt has increased over the past five years. The company reported a five-year low of $7.512 billion in 2008 and a five-year high in 2009 at $12.924 billion. The company's 2011 reported total debt of $12.371 billion is an increase of 50.55% over 2007.
Debt Ratios
3. Total Debt to Total Assets Ratio = Total Debt / Total Assets
2009 - $12.924 billion / $62.053 billion = 0.21
2010 - $12.421 billion / $68.565 billion = 0.18
2011 - $12.371 billion / $79.986 billion = 0.15
As Boeing's total debt to total assets ratio is well below 1, this indicates that Boeing has many more assets than total debt, ensuring that the company is currently in good financial condition
2009 - $12.924 billion / $62.053 billion = 0.21
2010 - $12.421 billion / $68.565 billion = 0.18
2011 - $12.371 billion / $79.986 billion = 0.15
As Boeing's total debt to total assets ratio is well below 1, this indicates that Boeing has many more assets than total debt, ensuring that the company is currently in good financial condition
2009 - $12.924 billion / $62.053 billion = 0.21
2010 - $12.421 billion / $68.565 billion = 0.18
2011 - $12.371 billion / $79.986 billion = 0.15
As Boeing's total debt to total assets ratio is well below 1, this indicates that Boeing has many more assets than total debt, ensuring that the company is currently in good financial condition
4. Debt ratio = Total Liabilities / Total Assets
If the ratio is less than 0.5, most of the company's assets are financed through equity. If the ratio is greater than 0.5, most of the company's assets are financed through debt. Companies with high debt/asset ratios are said to be "highly leveraged." A company with a high debt ratio or that is "highly