Garmin Ltd./ Financial Analysis

Topics: Financial ratio, Financial ratios, Balance sheet Pages: 14 (4326 words) Published: October 21, 2010
I. Garmin Ltd
Corporate History/ Company Overview
Garmin Ltd. and its subsidiaries, design, manufacture, market and sell navigation, communication and information devices and applications since 1989. Garmin Ltd. (Nasdaq: GRMN) Is a company incorporated in the Cayman Islands on July 24, 2000 as a holding company for Garmin Corporation, a Taiwan Corporation, facilitating public offering of Garmin shares to the United States. Garmin has principal subsidiaries in the United States, Taiwan and the United Kingdom. Garmin owns, directly or indirectly, all of the operating companies in the Garmin group. The development of Global Positioning System (GPS) devices was offered an optimal scenario when the US Department of Defense removed on May 2000, a national security restriction process known as Selective Availability which degraded the accuracy of civilian GPS. Its permanent removal confirmation through a presidential policy statement in December 2004, favored the development of enhanced GPS receivers (Garmin, 2009). Garmin’s Industry

Garmin competes in the information technology sector, with a specific focus on Global Positioning System (GPS) equipment and software. Garmin is a worldwide provider of navigation, communication and information devices and applications mostly enabled by Global Positioning System (GPS) technology, in both portable and fixed mount versions. Garmin offers ergonomically designed, user-friendly products with innovating features and designs covering a range of applications and prices. Garmin designs and manufactures for four main segments: the automotive/ mobile, outdoor/fitness, marine and aviation (Garmin, 2009). Primary Competitors
Product lineCompetitors
Portable automotive Tom Tom N.V, Navigon AG and MiTAC Digital (Magellan, Mio and Navman). OutdoorsMagellan and Lowrance Electronics, Inc. (subsidiary of Navico Holdings AS.) MarineRaymarine Ltd., Furuno Electronic Company, Lowrance, and Simrad Yaching AS Fish Finder Depth SounderLowrance, Raymarine and the Hummingbird division of Johnson Outdoors, Inc., Simrad and Furuno General AviationLowrance, Honeywell, Inc., Avidyne Corporation, L-3 Avionics systems, Rockwell Collins, Universal Avionics Systems Corp., Chelton Flight Systems, Aspen Avionics, and Free Flight Systems. Genral Mobile Ratio ServiceMotorola, Inc., Cobra Electronics Corporation and Midland radio Corporation. SmartphonesApple, Inc., HTC Corporation, Nokia, Samsung and Sony Ericson Mobile Communications.

Primary Products and/or Services
Garmin designs and provides the following devices, under each of its 4 target segments: Auto/mobile: Aviation: Marine: Fitness/outdoor : PNDs Integrated systems Chartplotters Two-way radios Traffic receivers Panel mounts Sounders Watches Mobile phones (coming) Portable navigators Fishfinders Mapping handhelds

II. Financial Analysis.

This segment includes a brief analysis based on relevant ratios of Garmin Ltd. It shows the company ratio evolution for the last three years and a comparison with 2009 ratios of its main competitor, Tom Tom, and, in most cases, with their industry sector, whenever available. Given the technological nature of Garmin and Tom Tom, It has been taken in consideration a subset of the industry comparable with the companies under analysis. Liquidity Ratios

The ability to meet short term obligations is relevant to determine the firm’s cash availability to offset current debt. The quick ratio is a more conservative measure than the current ratio because it excludes inventory, and includes assets that can quickly be converted to cash. Inventories are typically the least liquid of a firm’s assets....
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