Financial Analysis of Lockheed Martin

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  • Topic: Lockheed, Martin Marietta, Lockheed Martin
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A Financial Analysis of Lockheed Martin Corporation
Colby Scott
LeTourneau University

A Financial Analysis of Lockheed Martin corporation
The world of finance in today’s market is one of numerous ups and downs. With the global economy in constant flux, it is more important than every for companies to examine their financial status and compare their position to that of the relative market as well as their fellow competitors. In order to better understand the ways in which today’s managers examine their position on the market and evaluate their current value as a company we will examine the financial data of Lockheed Martin Corporation and perform a detailed financial analysis on the company. In this analysis we will examine financial rations of Lockheed Martin and in turn compare these rations to that of fellow market competitors. Upon completion of our financial analysis we will be able to understand the financial position of Lockheed Martin as well as the position of Lockheed Martin in their respective market, and in turn we will be able to fully comprehend the methods and data used by companies in order to evaluate their company.

Before going into an in depth analysis of our company, let us first examine the history behind Lockheed Martin. The Lockheed Martin Corporation traces its roots all the way back to the earliest days of flight. In 1909 aviation pioneer Glenn L. Martin organized a company around a small airplane construction business and transformed it into a major airframe supplier to U.S. military and commercial customers. In 1961 the Glenn L. Martin Company became the Martin Marietta Company after the completion of a merger with American-Marietta Corp., a leading supplier of building and road construction materials. In 1982, Martin Marietta was subject to a hostile takeover bid by the Bendix Corporation which bought the majority of Martin Marietta shares and in effect owned the company. However, Martin Marietta's management used the short time separating ownership and control to sell non-core businesses and launch its own hostile takeover of Bendix (known as the Pac-Man defense). The end of this extraordinarily bitter battle saw Martin Marietta survive and forced Bendix to be sold off. In 1913, Allan and Malcolm Loughead (name later changed to Lockheed) flew the first Lockheed plane over San Francisco Bay. The brothers later established their own corporation known as the Alco Hydro-Aeroplane Company which was later renamed the Loughead Aircraft Manufacturing Company. In 1926, following the failure of Loughead, Allan Loughead formed the Lockheed Aircraft Company in Hollywood, California. In 1929, Lockheed sold out to Detroit Aircraft Corporation. The Great Depression ruined the aircraft market, and Detroit Aircraft went bankrupt. A group of investors headed by brothers Robert and Courtland Gross, bought the company out of receivership in 1932. The syndicate bought the company for a mere $40,000. Ironically, Allan Loughead himself had planned to bid for his own company, but had only raised $50,000 which he felt was too small a sum for a serious bid. The first successful aircraft built in any number by the Lockheed Corporation was named the Vega and was best known for its use in several first- and record setting flights by, among others, Amelia Earhart, Wiley Post and George Hubert Wilkins. In the 1930s, Lockheed spent $139,400 to develop the Model 10 Electra, a small twin-engine transport which sold 40 units in the first year of production. Amelia Earhart and her navigator, Fred Noonan, flew this plane on their failed attempt to circumnavigate the world in 1937. The Lockheed Model 12 Electra Junior and the Lockheed Model 14 Super Electra expanded their market. The Model 14 also formed the basis for the Hudson bomber, which was supplied to both the British Royal Air Force and the United States military before and during World War II. In 1995 the these two...
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