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Technology Stocks : Boeing keeps setting new highs! When will it split? -- Ignore unavailable to you. Want to Upgrade?

To: larry larsen who wrote (2251)	5/7/1999 3:21:00 PM
From: campe	Read Replies (1) \| Respond to of 3764

Larry, I had the same question...At any rate, this is why they brought in Debbie H. as CFO. She's rather sharp and is slowly changing the way BA tracks their program costs, etc. I think long term, she will be the major contributor to changing all this. After all, Phil is an engineer...

To: larry larsen who wrote (2251)	5/9/1999 11:13:00 PM
From: David C. Burns	Read Replies (1) \| Respond to of 3764

One of my consulting partners who analyzes projects for economic value has provided this explanation: Turns on capital can be several indicators, in the context of the analyst's comments. "Asset turns" is sales divided by assets, where the higher the turns or a rising trend signals more effective or improving use of assets. "Return on assets" is income (net income, operating income, pretax income) divided by assets, again where the higher the return or a rising trend indicates more effective asset use. A company can generate high margins (income to sales) and ineffectively use assets to produce those margins. The analyst is right on the money. Economic Value Added (EVA), which is growing in popularity, is a measure that requires managers return more on assets they manage than the cost of those assets. High margins could be generated while still not returning more than the cost of assets employed. For example, if a company's cost of capital is 15%, and it acquires a $100 of assets that generate $10 of sales and $5 of profit, a manager would have a 50% margin, yet only generate a 5% return on assets ($5 profit divided by $100 of assets), below the $15 cost of capital (15% cost times $100).