Garmin Analysis - Following the Business Decisions Research Paper

Garmin Analysis - Following the Business Decisions - Research Paper Example asunder from this, Garmins return on capital employed, equity and sh areholders funds control all declined due to demoralize profitability in 2011. There are no significant changes recorded in the balance shred of the company apart from the increase in investment funds in marketable securities and the issuance of additional compensable in capital (Garmin, 2011). 2011 2010 2009 2008 2007 Current Ratio 2.98 3.73 3.50 4.14 2.91 Acid Test Ratio 2.51 3.16 3.05 3.25 2.28 Return on nifty Employed 0.27 0.39 0.49 0.77 0.89 Return on Equity 0.16 0.19 0.25 0.33 0.36 Return on Ordinary Shareholders Funds (ROSF) 28.98 32.52 70.30 73.15 78.81 (Garmin, 2011 Garmin, 2010 Garmin, 2009 Garmin, 2008) Cash ladder Trends As far as the exchange flows from operating activities are concerned, the company managed to improve the picture through and through efficient performance in 2011. Although the net income of the company d eclined slightly in comparison with the previous monetary year, the management still managed to show an increase in the operating cash flows. 2011 2010 2009 2008 2007 Operating Cash Flows 822,334 770,637 1,094,456 862,164 682,088 investiture Cash Flows (488,198) (72,869) (547,869) (56,349) (175,695) Financing Cash Flows (307,413) (510,821) (161,243) (809,109) (136,117) (Garmin, 2011 Garmin, 2010 Garmin, 2009 Garmin, 2008) On the other hand, cash flows from investing activities remained negative as they hold continued to be the same in the past years. However, in 2011 there has been a significant fountain in the negative balance of cash outflows from investing activities. The reason behind this significant increase is the bargain for of marketable securities by the company worth $ 1,172,555,000 in 2011. Similar to the trends shown in cash flows from investing activities, the cash flows from financing activities have also continued to show negative balance in 2011 as they have b een in the previous four years. Major Capital Expenditures The major capital expenditures of the company in 2011, as mentioned earlier in the balance sheet analysis, included the purchase of $ 1,172,555,000. This purchase is in line with the investment policy of the company, in light of which, the company aims at investing in less risky securities. In 2011, the net investments of Garmin in fixed securities increased to $ 491 million as compared to the figure of $ 25.5 million in 2010. The resolving of these safe play investment decisions has earned Garmin returns of 1.7 percent in 2011 (Garmin, 2011). Although this investment policy may be justified on the grounds that there are still traces of the recent financial crisis which can check risky play, but at the same time, it is expected that Garmins management shall be more fecund in determining the course of its business by exploring investment or capital expenditure options which are more effective and helpful in enabling the co mpany to regain its lost momentum (Cavallaro, 2009). isolated from this, the company acquired several business entities, which is appreciable since it will allow the company to stretch its market heading further. The recently acquired business entities include NAVIGON AG, TriTronics Inc. and two other worldwide distributing companies. Although the company has faced fierce controversy from other brands and has faced threatening anticipations of market share loss due to the popularity gained by smart