Subject: Business / Finance
CHAPTER 2 Assessing Martin Manufacturing’s
CASE Current Financial Position
Terri Spiro, an experienced budget analyst at Martin Manufacturing Company,
has been charged with assessing the firm’s financial performance during 2006
and its financial position at year-end 2006. To complete this assignment, she gathered
the firm’s 2006 financial statements (below and on the facing page). In addition,
Terri obtained the firm’s ratio values for 2004 and 2005, along with the
2006 industry average ratios (also applicable to 2004 and 2005). These are presented
in the table on page 88.
a. Calculate the firm’s 2006 financial ratios, and then fill in the preceding table.
(Assume a 365-day year.)
b. Analyze the firm’s current financial position from both a cross-sectional and
a time-series viewpoint. Break your analysis into evaluations of the firm’s
liquidity, activity, debt, profitability, and market.
c. Summarize the firm’s overall financial position on the basis of your findings
in part b.