Lockheed Martin Corporation Case Summary

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In FY2013, Lockheed Martin Corporation revenue is $45.4 billion, a 4.0% drop from FY2012. The gross profit does not have any fluctuation. However, the net profit increased from 1.1% to 15.2%. It is mainly due to the lower cost of products and an increase in other comprehensive income. The reason for the decrease in costs of products is the results of US$836 million investment into their business in capital expenditures and improving the efficiency and quality of their operations. Lockheed martin should ensure that they remain the low cost of products in-order to maintain the double digit net profit. From the common size balance sheet, Lockheed Martin Corporation does not have any obvious indications of any changes for the non-current assets and current assets for the past 5 years. As…show more content…
Their cash ratio remains low for the past 5 years which may has positive effect as Lockheed Martin Corporation utilise their cash on hand. Although in FY2011 and FY2012, the ROI is low, but the gross profit margin remains pretty much the same. These imply that the low ROI and net profit is caused by other factors like other comprehensive income. Lockheed Martin Corporation also has a high asset turnover ratio of more than 1 which means that they are able to generate more than a dollar per assets. Lockheed Martin Corporation maintains the debt to asset ratio at 100%. However, it debt to equity ratio is high. A higher debt to equity ratio basically means that the business relies more on external lenders thus resulting in slightly higher risk. There is a trend of increasing dividend payout ratio and dividend yield on common stock for the past 5 years. Last but not the least, base on the increasing dividend ratio Lockheed Martin Corporation is worth

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