Garmin Ratio Analysis Paper

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For the ratio analysis paper, I chose Garmin LTD (ticker: GRMN), which was listed on my stocks choices for the Screening Method paper. Garmin is a holding company well- known for its global positioning system (GPS) and other navigation and communication products worldwide. It’s in the Technology sector of the Scientific and Technical Instrument Industry. Looking at the company’s financial documents and ratios, we can get a picture of what the company’s financial condition is. I. Market Ratios: First of all, looking at the market ratios, we can see an unstable performance of the company between June 2008 and March 2010. The stock price is about half of the industry’s average stock prices. Both of them fell dramatically in December 2008 and March 2009, but they went up and have had an upward trend until now. Below is the price chart of Garmin from June 2008 to March 2010: (Source: Msn Moneycentral) The company pays an annual dividend of 0.750, which is much higher than the industry’s average. Starting at 1.2 in June 2008, Garmin’s earning per share ratio dropped to 0.240 in March 2009, went up to 1.290 in December 2009, and suddenly dropped to 0.190 in March 2010. The industry’s EPS ratio is unstable, too. Besides, looking at the P/E ratio of the company, we can see a broad range of values. Compared to the industry average, Garmin’s P/E is much smaller, but they both follow the same trend. One interesting thing here is the PEG ratio of the company when it shows negative values during certain quarters. Because the P/E ratios are all positive, there might be negative growth in earnings during these quarters. This indicates the company has quite a lot of losses and declines in earnings through tough times. However, the industry average’s PEG ratio never reaches negative value, which means that the company must have had bad performances occasionally. In the

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