NAME-ASHUTOSH SHARMA

SECTION- B (PGDM GENERAL)

ROLL NO- PGFB 1915

INDIVIDUAL ASSIGNMENT
ACCOUNTING FUNDAMENTALS
Boeing Cash Flow Statement

Q1) Boeing has been sourcing its cash primarily from which activity.
Ans. The main source of cash for Boeing is from operating activity, because if we look at the cash flow
statement it has more or positive cash inflow from operating activity.
Q2) What has led to high liquidity of Boeing’s earnings?
Ans. Increase in inventories, increase in cash flow in operating activity and increase in cash and cash
equivalent from previous years are responsible for high liquidity of Boeing’s earnings.
Q3) Has Boeing been able to negotiate with its customers and suppliers (in its favor/not its favor)?
Ans. If we look at the cash flow statement, we can infer that the creditors and other payables can be easily
paid from the net earnings from the operating activities. So, we can easily interpret that its customers and
suppliers are in favor of the company from the overall scenario of all three years data which has been
provided to us.
Q4) Which year Boeing had net cash inflows from changes in Current asset/Current liabilities? Does it
mean that during that year Boeing’s management of working capital was effective/not effective?
Ans. The maximum cash inflow for Boeing was in the year 2005 as it can be interpreted from the operating
activity the net cash inflows ie, changes in Current assets/ current liabilities (-592-1965+1775+3562-
1862+200) is $1118 million which is more in comparison to other years, and therefore it shows that
Boeing’s management of working capital is more effective. Also, there is net outflow of working capital in
year 2003 and 2004 whereas there is net inflow of working capital in 2005.
Q5) What has led to outflow under financing activity? Is it good for company in future?
Ans. The maximum outflow under financing activity of Boeing are in repurchasing of its own equity shares,
Debt payments and from dividends paid. This helps in minimizing the capital loss. Equity is normally
bought back when the market price of the share is less than Net annual value due to many factors and
from this company can easily strengthen its financial position through it.
Q6) Do you agree that Boeing’s cash flows are highly favorable and its ability to generate positive cash
flows from operations and ability to meet its obligations in future is high?
Ans. Yes, I agree that Boeing’s cash flows are highly favorable because its operating activity profit
generation is increasing year by year which is giving company chances to expand in other fields to invest
and provide funding to other sectors. As per the cash flow statement the ability to meet future obligations
is very high due to rise of positive cash flow (operations) ie. $7000(in million) in comparison with other
activities which is being used to expand and utilize money for expanding and also buying back the
company’s own equity from the surplus cash which will provide profit to the company in future. We can
also see that there is an increase in cash & cash equivalents by $2208 million