On December 3rd, 2009, Bombardier Inc. released its third quarter financial statements. Bombardier is a Canadian manufacture and maintenance business which develop transportations in fields of aerospace and trains. In Bombardier’s incomes statements, they have reported revenue of $4597 millions US dollars from three different sources- manufacture, service and other (e.g. financial derivatives). In contrast, its expense and cost of sales are reported at $4335 millions. There was also an independent section of financing income and expenses. Bombardier lost 31 millions in financing activities. Prior to the calculations of net income, Bombardier took income taxes into a factor and deducted these taxes from income. The net income of three-month ended period as of October.31st, 2009 was 168 millions and diluted EPS was $0.09.
Connection
The form of income statement posted online is multi-stepped. First part of the income statement concluded operating activities’ result while the second part of the statement mentioned financing (non-operating) activities. Income tax was introduced in the third section. At the end of the income statement, both basic and diluted EPS were shown. From the income statement, there was 200 million dollars of increase in the cost of sales comparing to 2008. This was mainly caused by an escalation of raw materials like coppers. Albeit there was an escalation in cost of sales, which was out of management team’s controls, other expenses figures gradually decreased from the previous year. All these information has shown that the company has an efficient management team who continuously working to enhance company’s performance.
Reflection
As the summary shown above, we can see Bombardier has diversified sources of income. This allows them to have greater flexibility in different crisis. In addition, one of the most intriguing factors of this company was their manufacture of train. As global warming becomes severer, a greener intercity transportation is needed to reduce emission of greenhouse gases. Railway or metro provide a solution to greener world. Although trains or metro are not as convenient as airplanes, I am certain that government will construct different railways to accommodate the demand for trains and metros. As an n advantage, Bombardier already has the technology to develop fast and green trains. Last but not least, Bombardier has a PE ratio of 10, which is still lower than the average stocks’ ratio, making it very appealing to investors. Therefore, I will buy this stock for long-term investment.
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