Sell in May and go away

But remember to be back in September. It’s an old advice at the stock-exchange and although it might also apply to me, I think it’s time for another (short) post.

Originally my plan was to visualise the Quantitative (and Qualitative) Easing or Asset Purchasing Programmes from the Fedral Reserve (FRB), Bank of Japan (BoJ) and European Central Bank (ECB) in relationship to e.g. inflation and interest. On gathering the data I realised the visualisation would only take me a couple of minutes indeed, but to get all the data I needed in a reliable way would mean reading a lot of complex documents with a structure very different from an annual report. This could take me several days of full-time work and I decided to switch to something else. For those who are interested three links for ECB, “FED” and BoJ.

Boeing 737

Photo by holgi on Pixabay

Everybody will remember the two crashes with a Boeing 737 Max in Q4 2018 and Q1 2019. As I’m not an expert on aviation (to put it mildly) I won’t comment on the events themselves, but it is clear that the following ban of the 737 Max was a huge blow for Boeing from a financial perspective.

At the same time we know they have an important competitor: Airbus. It seems reasonable to compare a series of quarterly reports of the two companies in a3D-graph, created by our familiar AnRep3D-generator. Let’s have a look at Q3 2018 – Q2 2019 for both. Applying some calculations the different numbers were derived from financial reports by Boeing and Airbus. Of course I had to use the same currencies for both companies, so I converted the EUR to USE for Airbus, using macrotrends.net Because a quarter is not a long period, I used the end of quarter rate for both balance and income-sheet.

Airbus A380

Photo by mrminibike on Pixabay

Looking at the numbers I was surprised to see Boeing had negative equity during two quarters and that’s why I added Q2 2018 for both. It didn’t help since it wasn’t an incident after all. Because of the negative equity, this time the graph shows total assets (width) and total liabilities (depth) as stated by the 3D-legend (or 3D-key). If the depth of a “building” exceeds the width, the equity (difference between the two) will be negative. This time the graph runs from past (front) to present (rear).3D-graph Boeing Airbus finance

Double-click the screenshot to open the real 3D-graph (html5) in your browser. Then clicking the right mouse-button, moving the mouse up and down will zoom the graph in and out. Clicking left and moving the mouse will tilt the graph in different directions (or move the observer’s viewpoint around a fixed graph – it’s relative of course). Double clicking in the graph translates it and moves the centre at the same time. As a result the way the graph tilts will change. Just try it. If you don’t know how to get the normal position back, just refresh the graph.

Looking at the visualisation in 3D, I was surprised – again – how useful it is to see such a 3D-image. Comparing the quarters of these representatives of the “old economy” to the new tech giants (e.g. FAANG – see other posts) it is clear how much of their money is in quality, documentation, regulation and of course physical components, whereas these new companies are able to create huge revenues and high margins with much less need for compliance. The “buildings” in the Boeing/Airbus graph are really flat and even if we would sum four quarters the revenue would still not be impressive when compared to the the amount of assets or liabilities.

Also surprising is the similarity between Boeing and Airbus from a financial perspective. Total assets and total liabilities are not very different and the same applies to their revenues. The profit is more volatile for Boeing and for Airbus the revenue is less stable, but maybe that’s just creative book-keeping? Airbus switched to IFRS15 by the way.sideview 3D-graph Boeing Airbus finance

Back to the accidents with the 737 Max: indeed Boeing suffered a huge loss over Q1 2019 – shown as a rather thick red roof, but at this moment the Q1-report for Airbus is not available yet. Will Airbus profit or will they suffer together? In a couple of days we will know and this 3D-graph will be extended.

For more information about our 3D-graph generator, visit our website!

About AnRep3D

AnRep3D is the new company, founded after the handover of Scientassist (together with VRBI) to one of my sons. From now I will focus on three-dimensional graphs for the financial markets, showing the main figures from annual reports in comparison.
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