Financial Analysis of Rockwell Collins

Company Profile:

Rockwell Collins, a designer of airliner and military electronics, has been in business since early 2001 and is based out of Cedar Rapids, Iowa. They do have a warehouse located in Tigard, Oregon.

Financial Analysis:

There are many significant changes while observing the Balance Sheet. The main change is the difference is cash on hand. For year 2002, the net cash amount was ,000 then the next year it rose to ,000. The last year (2004) the cash amount was 6,000 the amount nearly quadrupled compared to the two previous years.

Another major change was the Retained Earnings. In year 2002, was ,000, the following year it nearly tripled to 3,000 (2003). The most recent year 2004, retained earnings were 2,000. Property Plant and Equipment stayed pretty consistent. This may indicate that the company may not have any interest in expanding as of now. Long Term Investments, as well, stay consistent.

Account Payable amount decreasing showing that they are paying off debts. Probably due to the company having more cash on hand or ordering less equipment and materials. Evidence top support this theory is that the inventory stays the same. In year 2002, the inventory located in the asset category read 3,000. In year 2004, the inventory is priced at 650,000. Apparently the company has no short term investments.

"Good Will" is listed on the Balance Sheet. There is net increase of ,000 between the years of 2002 and 2004. September 11th may have caused this because the companies' main product is airliner electronic equipment. After the event airline industries were struggling and could have caused a reduction in goodwill. Many employees were laid off from Rockwell Collins due less business. But a couple years later the airline industry grew in popularity, possibly increasing the goodwill.

One more item I observed on the Balance Sheet is the Total Stockholders Equity. That amount for the year 2004 is ,133,000. I divided the Net income by the stock information. My result was roughly $ .27 which means that for every dollar invested in the company, there is a return of 27 cents.

Depreciation, on the Cash Flow Statement, stayed consistent from 2002-2004. Depreciation in 2002 was 5,000 and in 2004 it was 9,000. This could represent that the company had not purchased any new equipment to increase the depreciation amount. Again this could be statistics supporting the idea the company is currently not expanding.

Also on the cash flow statement, there is a substantial change in liabilities regarding the operating activities. In 2002, there was an amount of -,000, in 2003, -,000 and in 2004 a positive amount ,000

On the Income Statement, the cost of revenue for 2002 and 2003 were very similar with 2002 cost of revenue being ,863,000 and 2003 at ,866,000. Then in 2004 the numbers sky rocketed to ,144,000 as the cost of revenue. So with an increase in COGS or Cost of Revenue, the Total Revenue should also greatly increase if sales remain consistent with the two previous years.

After reviewing the financial information and statistics, I conclude that the company is doing well. I wonder with the increase of revenue and cash on hand if they will soon expand. If there is an increase in equipment and land, that will signify growth. But the companies statistics lack that evidence and information.

I would be curious on viewing the following information for the next two years on this company. I predict that the companies sales will rise and keep on rising in the future.