Airbus Commercial Results of Full Year 2016

Introduction

Airbus SAS is a branch of multinational Airbus Group manufacturers in civil aircraft, Airbus based in Blagnac, Toulouse France. The production facilities are mainly based in France, Spain, Germany, China, U.K and the U.S.

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Airbus Commercial Aircraft Value of Inventory at End of Year

At the end of the 2016 financial period, Airbus logged a net of 321 jetliners with a total of 111 purchases by the customers that brought the total purchases to 731 aircraft with a record of cash purchases of 688 aircraft. Therefore the inventory remaining at year end stood at 43 aircraft.

In the financial periods of 2014 and 2015 the inventory at the end of the year was 750 aircrafts and 779 respectively and for 2016 at 731.

Calculate Cost of Goods Sold Periodic Inventory

Airbus Company cost the inventory sold for the year ending Dec 2016 was $63,952 million. The cost of the goods sold directly attached to the profitability of the organization via the gross margin for three months to September 2016 approximated at 11.859%. However, the cost of the goods sold had a direct link to the inventory turnover and for the three months up to September 2016 was 0.38. The cost of goods sold in the years 2014 and 2015 were $55,848 and $59,972 million respectively.

Analysis of Financial Results

What income statement format does the company use? Explain.

The company uses a comparative form of income statement format where results of different reporting periods are recorded in adjacent columns. This is because the company needs to keep track of the different number of sales for different aircraft models across different financial periods. This helps in forecasting and comparative studies for the performance of the company.

Compute the company's gross profit percentage for the year end.

The Gross profit of the company for three months ending September 2016 was $1,856,000,000. The gross profit twelve months was $7,296,000,000.

Gross profit percentage formula: Gross margin = Gross profit / Revenue.

= $1,856,000,000 / $15,657,000,000 = 11.86%

Therefore the gross profit margin = 11.86%

Gross profit margin for Dec, 2015 was 13.73%

= 8.85 / 64.45 = 13.73%

Gross profit margin for Dec, 2014 was 14.80%

= 8.99 / 60.71 = 14.80%

Did the gross profit percentage improve, worsen or hold steady?

The Gross profit margin worsened in comparison to the year 2015 where it dropped from 13.73% to 11.86%.

Gross profit / Revenues = 8.85B / 64.45B = 13.73%

How does the company's gross profit percentage compare to the industry?

The gross profit margin for Airbus is relatively higher than that of the industry especially in the financial period ending December 2016 as the industry's ratio approximated at 10.58% while that of Airbus was at 11.86%.

What are the company's inventory turnover and days sales in inventory for the year-end? Anything interesting about the ratios.

Days sales inventory = Ending Inventory / Cost of goods sold * 365

Airbus cost of goods sold = $13,800,000,000

Ending inventory = $36,669,000,000

Therefore Days inventory = 242.46

This shows that the ratio increased from the previous year's 228.86 thus indicating that the sales of the Airbus Company reduced or slowed down.

Links to data:

http://www.airbusgroup.com/int/en/investors-shareholders/Annual-reports-and-registration-documents.htmlhttp://www.marketwatch.com/investing/stock/eadsy/financials