A stock represents a small share owned by an individual in an organization. The value of a stock fluctuates as the company’s value changes over time. Stocks are made available to the public when the company needs to increase its financial resources. Stocks are a long-term investment opportunity for the people who want to receive a return on investments (ROI).
Types of Stocks
When looking at the major stock exchanges in the United States, two names come up; the first is NASDAQ and the second is the New York Stock Exchange (NYSE).
Similarities and Differences
The similarity between the two stock exchanges is that they deal in the major shares of the United States’ connected equities. Not only do they trade in stock options but also in fixed incomes, cash equities, and exchanging traded goods. Their concentration on a specific stock exchange traffic allows them to thrive and dominate the stock exchange world. Their activities are synchronized through the Stock Exchange Commission which allows them to seamlessly trade and allow the suppliers to connect with the buyers.
The difference between the two stock exchanges is that the listing fee is higher and the requirements are more complex for NYSE than they are for NASDAQ. NYSE is auction-based whereas NASDAQ is a dealer market. NASDAQ’s major dealing is with the technological field but in contrast, NYSE works with small to mid-sized companies. Specialists manage individual stocks at NYSE but this is not the case with NASDAQ. The biggest difference, however; is that NYSE does not allow public stock trading but Nasdaq do (Hayes, 2022).
Companies working with Stock Exchange
Boeing Co. is the organization that manufactures airplanes for traveling and its stocks are traded through NYSE. On the other hand, Apple’s stocks are traded through NASDAQ.
Free Cash Flow for Boeing and Apple
In 2019, Boeing Co. saw a free cash flow of -3.94 billion dollars which was due to the decline of 128.76% observed in 2018. Then an increase of 392.07% from 2019, resulted in -19.417 billion dollars in 2020 (Macro Trends, 2021). Due to a decline of 8.15% in 2018, Apple’s cash flow was 58.896 billion dollars and the increase of 24.57% in 2019 resulted in 73.365 billion dollars of free cash flow in 2020 (AAPL, 2021).
Inference
From the data regarding Boeing Co.’s free cash flow, it can be inferred that the company’s stock is declining and even after a good year the stock did not recover much as it was showing cash flow in negative value. Apple’s stock, on the other hand, is doing well as even after the decline in 2018, the free cash flow in 2019 was considerably well, and then in 2020, the cash flow increased as the stocks performed well.
Financial Ratios
| Company | Liquidity ratios | Asset Management Ratio | Profitability Ratio | Current Ratio | Debt/Equity Ratio | Inventory Turnover Ratio |
| Boeing Co (2019) | 1.05% | 0.5729 | 5.83% | 1.0505 | -3.2894 | 0.9401 |
| Boeing Co (2020) | 1.39% | 0.3823 | -9.78% | 1.3937 | -3.5177 | 0.7808 |
| Apple (2019) | 35,9% | 0.7686 | 37.82% | 1.5401 | 1.194 | 39.4014 |
| Apple (2020) | -11.5% | 0.8476 | 38.23% | 1.3636 | 1.7208 | 41.753 |
Challenges, Strengths, and Weaknesses
Boeing Co.’s stock seems to be performing poorly as the profitability ratio is declining and the debt-equity is rising. It seems like the future of Boeing Co. is feeble as its stocks are not performing well. The travel industry has suffered greatly because of the pandemic and it is showing in the stock performance. Apple’s stock is doing fairly well as there was an increase in profitability ratio in 2020 as compared to 2019. The ratios of Apple seem promising and it is a better choice for anyone wanting to invest in stocks.
References
AAPL. (2021). Apple Free Cash Flow 2010-2021 | AAPL. https://www.macrotrends.net/stocks/charts/AAPL/apple/free-cash-flow
Hayes, A. (2022, January 21). The NYSE and Nasdaq: How They Work. Investopedia. https://www.investopedia.com/articles/basics/03/103103.asp
Macro Trends. (2021). Boeing Free Cash Flow 2010-2021 | BA. https://www.macrotrends.net/stocks/charts/BA/boeing/free-cash-flow
