Operating Profit Airgon Case Study
• Operating Profit Margin (OPM)
Operating Profit Margin shows the relationship between the cost and the revenues. As the company grows the fixed cost should be a small percentage of the total cost and the OPM should increase. A low OPM means that the company has a low cost operating system.
Boeing recorded an OPM of 7.6% in 2013 and it was 7.7% in 2012. There is a slight decrease in the year 2013. Though the revenues increased the general and administration expenses has increased by 6.4% in 2013. Airbus shows an OPM of 4.4% in 2013 which is above 2012 which was 3.7%. This is due to the increase in the revenues by 4.9% in 2013.
Boeing shows a better low cost operating system than Airbus with an OPM of 7.6% against 4.4%. This has happened …show more content…
In 2013 inventories have grown by EUR 1,844 mio and cost of sales too increased by EUR 2,313 mio. Therefore Airbus indicates a better inventory day as 179.7 days where Boeing shows it’s inventory days as 213.8 days, which indicates that Airbus products are held only for 179.7 days in stocks before it’s sold. Airbus shows a better efficiency and cost control systems than Boeing. This can occur due the high volume in production that Boeing faces. Mainly the cost of sales of Airbus includes EUR 39.0 amortization expenses which are related to EADS merger and the Airbus …show more content…
Receivables collection period of Boeing in 2013 was 27.6 days where it has recorded a revenue increase of 6.02% and trade receivable increase of 16.7% in 2013, but it was 25 days in 2012. Airbus the revenue has grown by 4.9% and the receivables increased by 6.6% indicating receivable collection periods as 44.6 days in 2013 against 43.9 days in 2012. Airbus revenue includes sale of goods and services and also construction contracts, contracted research and development and customer financing revenues.
Airbus has a better receivable collection period and more efficiency in business for their receivables, than Airbus.
4.4 Investor Ratios
The investor ratios will figure, the healthiness of the business, to devise trading strategies and to clear out the underperforming stocks.
• Earnings per Share
Operating Profit Margin shows the relationship between the cost and the revenues. As the company grows the fixed cost should be a small percentage of the total cost and the OPM should increase. A low OPM means that the company has a low cost operating system.
Boeing recorded an OPM of 7.6% in 2013 and it was 7.7% in 2012. There is a slight decrease in the year 2013. Though the revenues increased the general and administration expenses has increased by 6.4% in 2013. Airbus shows an OPM of 4.4% in 2013 which is above 2012 which was 3.7%. This is due to the increase in the revenues by 4.9% in 2013.
Boeing shows a better low cost operating system than Airbus with an OPM of 7.6% against 4.4%. This has happened …show more content…
In 2013 inventories have grown by EUR 1,844 mio and cost of sales too increased by EUR 2,313 mio. Therefore Airbus indicates a better inventory day as 179.7 days where Boeing shows it’s inventory days as 213.8 days, which indicates that Airbus products are held only for 179.7 days in stocks before it’s sold. Airbus shows a better efficiency and cost control systems than Boeing. This can occur due the high volume in production that Boeing faces. Mainly the cost of sales of Airbus includes EUR 39.0 amortization expenses which are related to EADS merger and the Airbus …show more content…
Receivables collection period of Boeing in 2013 was 27.6 days where it has recorded a revenue increase of 6.02% and trade receivable increase of 16.7% in 2013, but it was 25 days in 2012. Airbus the revenue has grown by 4.9% and the receivables increased by 6.6% indicating receivable collection periods as 44.6 days in 2013 against 43.9 days in 2012. Airbus revenue includes sale of goods and services and also construction contracts, contracted research and development and customer financing revenues.
Airbus has a better receivable collection period and more efficiency in business for their receivables, than Airbus.
4.4 Investor Ratios
The investor ratios will figure, the healthiness of the business, to devise trading strategies and to clear out the underperforming stocks.
• Earnings per Share