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Financial Analysis - Garmin

In: Business and Management

Submitted By edboria
Words 933
Pages 4
Garmin Ltd. (GRMN) is the global leader in satellite navigation. It is a company that designs, manufactures and markets portable, fix mounted and hand held Global Positioning System (GPS) devices. It also manufactures devices for communication that utilizes the combination of GPS technology and cellular technology for better coverage. Its products serve the automotive, mobile, wireless, outdoor, recreation, marine, aviation and OEM applications. In 2000, Garmin Ltd became a public company and is currently trading on the NASDAQ (GRMN).

The company’s success is contributed by the quality of material and products that they deal with as well as its mission to enhance people’s lives through manufacturing of useful products by using this complex technology called GPS. This way the customer’s daily lives become less complicated and improved. Garmin also has a proven track record of solid revenue and earnings per share growth (www.forbes.com/garmin).

Balance Sheet Analysis:

The balance sheet ratios for Garmin for different years test the company’s liquidity and financial strength. “The smart business analyst comes to the balance sheet first to gauge the overall health of the company” (JWMI 530, Week Three, Lecture One). Garmin’s balance sheet represents the snapshot of its financial position on the last day of the year. (Brigham & Ehrhardt, 2011). Garmin seems to have a very strong balance sheet due to the company having zero long term and short term debt and plenty of cash. With, $1.27 billion dollars in cash (Garmin, 2012), approximately 20% of the company’s market cap consist of cash. This measurement is very important when determining a company's financial health. Garmin has a current ratio of 2.8, which tells us they are efficient on their operating cycles and/or have the ability to turn its products into cash (www.investopedia.com). A clear indication,...

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