An investigation of Lockheed's solvency by use of financial ratios
Bannat, Edward George
Fremgen, James W.
Larson, Harold J.
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This thesis is an application of the methodology in studies by Beaver and one by Dascher to an analysis of the financially troubled Lockheed Aircraft Corporation. There three previous studies used financial ratios in attempting to predict failure. All three studies were performed with firms that had already failed. their results demonstrate that there is a significant difference in financial ratios of failed and non-failed firms. This difference is particularly obvious when observing the non-liquid asset ratios. This thesis attempts to determine Lockheed's solvency in 1971, when it claimed to be facing bankruptcy. The conclusion is that failure in 1971 was, indeed, quite probable. In addition, Lockheed's ratios are analyzed during 197101972, as the firm has stated that it faces a new crisis, though not nearly of the proportion of the 1971 disaster. These last two years will serve as a starting point for future ratio analyses of Lockheed.
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Cox, Landon G., Jr. (Monterey, California. Naval Postgraduate School, 1974-06);The Lockheed Aircraft Corporation emerged from World War II a financially sound organization enjoying a reputation as one of the leading U.S. manufacturers of military and civilian aircraft. However, by 1971 Lockheed had ...
Link, Kent "A". (Monterey, California. Naval Postgraduate School, 1974-06);Lockheed Aircraft Corporation was a financially sound organization during the mid 1960s with a reputation as a leader in the aerospace industry. Long term debt for the corporation amounted to only $17 million in 1966 ...
Goodwin, Michael R. (Monterey, California. Naval Postgraduate School, 1974-06);Lockheed Aircraft Corporation emerged from World War II a financially sound organization with the reputation as one of the country's major manufacturers of both military and civilian aircraft. However, by 1971, Lockheed ...