Partial Classified Balance Sheet for Boeing
The following items appear on the consolidated balance sheet of Boeing Inc. at December 31, 2011 (in millions). The information in parentheses was added to aid in your understanding.
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Accounts payable
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$ 8,406
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Accrued retiree healthcare
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7,520
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Accrued pension plan liability, net
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16,537
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Accrued liabilities
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12,239
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Advances and billings in excess of related costs (current)
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15,496
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Deferred income taxes and income taxes payable (assume current)
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2,780
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Short-term debt and current portion of long-term debt
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2,353
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Non-current income taxes payable
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122
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Other long-term liabilities
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907
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Long-term debt
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10,018
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Source: Boeing, Inc., 2011 Form 10-K.
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Required
1. Prepare the Current Liabilities and Long-Term Liabilities sections of Boeing's classified bal- ance sheet at December 31, 2011.
2. Boeing had total liabilities of $65,703 and total shareholders' equity of $2,862 at December 31, 2010. Total shareholders' equity amounted to $3,608 at December 31, 2011. (All amounts are in millions.) Compute Boeing's debt-to-equity ratio at December 31, 2011 and 2010. As an investor, how would you react to the changes in this ratio?
3. What other related ratios would the company's lenders use to assess the company? What do these ratios measure?