Purchased intangibles, net Prepaid pension asset Other assets Total assets Liabilities and stockholders' equity Accounts payable Customer advances and amounts in excess of costs incurred Salaries, benefits and payroll taxes Current maturities of long-term debt Other current liabilities Total current liabilities Long-term debt Accrued pension liabilities Other postretirement benefit liabilities Other liabilities Stockholders' equity Common stock, $1 par value per share Additional paid-in capital Retained earnings Accumulated other comprehensive loss Other Total stockholders' equity Total liabilities and stockholders' equity Consolidated Statement of Cash Flows Year Ended December 31 (In millions) Operating Activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Amortization of purchased intangibles Deferred federal income taxes Changes in operating assets and liabilities: 560 672 1,360 1,030 2,728 2,596 $ 27,984 $25,594 $ 1,998 $ 1,726 4,331 4,028 1,475 1,346 202 15 1,422 1,451 9,428 8,566 4,784 5,224 2,217 1,580 1,277 1,236 2,411 1,967 432 438 1,724 2,223 7,278 5,915 (1,553) (1,532) (14) (23) 7,867 7,021 $ 27,984 $25,594 2005 2004 2003 $1,825 $1,266 $1,053 555 511 480 150 145 129 24 (58) 467 Receivables Inventories Accounts payable Customer advances and amounts in excess of costs incurred Other Net cash provided by operating activities Investing Activities Expenditures for property, plant and equipment Acquisition of business/investments in affiliated companies Proceeds from divestiture of businesses/Investments in affiliated companies Purchase of short-term investments, net Other Net cash used for investing activities Financing Activities repayment of long-term debt Issuances of long-term debt Long-term debt repayment and issuance costs Issuances of common stock Repurchases of common stock Common stock dividends Net cash used for financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year As of December 31, there were the approximate shares outstanding: 2005-434,264,432 2004 - 440,445,630 As of December 31, the company's stock closed at the following values: 2005 $63.63 2004 $55.55 (390) (87) (258) (39) 519 (94) 239 288 330 296 (228) (285) 534 568 (13) 3,194 2,924 1,809 (865) (769) (687) (244) (91) (821) 935 279 234 (33) (156) (240) 28 29 53 (708) (1,461) (179) (253) (1,049) (2,202) 1,000 (12) (163) (175) 406 164 44 (1,310) (673) (482) (462) (405) (261) (1,631) (2,126) (2,076) 1,384 90 (1,728) 1,100 1,010 2,738 $2,484 $1,100 $ 1,010 2004- $55.55 (a) Compute and compare the Altman Z-scores for both years. (Do not round until your final answer; then round your answers to two decimal places.) 2005 z-score = 0 2004 Z-score = 0 Which of the following explain the trend in the Z-scores from 2004 to 2005? (Select all that apply.) Lockheed decreased its liquidity due to an increase in retained earnings. The market value of Lockheed's equity improved somewhat over the year. Lockheed improved its short-term liquidity by increasing cash. + Lcokheed improved its long-term liquidity by decreasing total liabilities. (b) Which of the following statements best describes the company's Altman Z-scores? OBoth the Altman Z-scores are above 3.00 which indicate the company has a very low probability of bankruptcy. OThe Altman Z-scores have increased from 2004 to 2005 which indicates the company's bankruptcy risk has decreased. OBoth the Altman Z-scores are below 1.80 which indicate the company has a very high probability of bankruptcy. OThe Altman Z-scores have decreased from 2004 to 2005 which indicates the company's bankruptcy risk has increased. Please answer all parts of the question. tatemICHIED Year Ended December 31 (In millions) Net sales Products Service Cost of sales Products Service Unallocated coporate costs Other income (expenses), net Operating profit Interest expense Earnings before taxes Income tax expense Net earnings Assets Cash and cash equivalents Short-term investments Receivables Inventories Deferred income taxes Other current assets Total current assets Property, plant and equipment, net Investments in equity securities Goodwill Income Statement 2005 2004 2003 $31,518 $30,202 $ 27,290 5,695 5,324 4,534 37,213 35,526 31,824 27,892 27,667 25,306 5,073 4,765 4,099 803 914 443 33,768 33,346 29,848 3,445 2,180 1,976 (449) (121) 43 2,996 2,059 2,019 370 425 487 2,626 1,634 1,532 801 368 479 $ 1,825 $ 1,266 $ 1,053 2005 2004 $2,484 $1,100 429 396 4,579 4,094 1,921 1,864 861 982 495 557 10,769 8,993 3,924 3,599 196 812 8,447 7,892 Balance Sheet December 31 (In millions) Purchased intangibles, net Prepaid pension asset Other assets Total assets Liabilities and stockholders' equity Accounts payable Customer advances and amounts in excess of costs incurred Salaries, benefits and payroll taxes Current maturities of long-term debt Other current liabilities Total current liabilities Long-term debt Accrued pension liabilities Other postretirement benefit liabilities Other liabilities Stockholders' equity Common stock, $1 par value per share Additional paid-in capital Retained earnings Accumulated other comprehensive loss Other Total stockholders' equity Total liabilities and stockholders' equity Consolidated Statement of Cash Flows Year Ended December 31 (In millions) Operating Activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Amortization of purchased intangibles Deferred federal income taxes Changes in operating assets and liabilities: 560 672 1,360 1,030 2,728 2,596 $ 27,984 $25,594 $ 1,998 $ 1,726 4,331 4,028 1,475 1,346 202 15 1,422 1,451 9,428 8,566 4,784 5,224 2,217 1,580 1,277 1,236 2,411 1,967 432 438 1,724 2,223 7,278 5,915 (1,553) (1,532) (14) (23) 7,867 7,021 $ 27,984 $25,594 2005 2004 2003 $1,825 $1,266 $1,053 555 511 480 150 145 129 24 (58) 467 Receivables Inventories Accounts payable Customer advances and amounts in excess of costs incurred Other Net cash provided by operating activities Investing Activities Expenditures for property, plant and equipment Acquisition of business/investments in affiliated companies Proceeds from divestiture of businesses/Investments in affiliated companies Purchase of short-term investments, net Other Net cash used for investing activities Financing Activities repayment of long-term debt Issuances of long-term debt Long-term debt repayment and issuance costs Issuances of common stock Repurchases of common stock Common stock dividends Net cash used for financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year As of December 31, there were the approximate shares outstanding: 2005-434,264,432 2004 - 440,445,630 As of December 31, the company's stock closed at the following values: 2005 $63.63 2004 $55.55 (390) (87) (258) (39) 519 (94) 239 288 330 296 (228) (285) 534 568 (13) 3,194 2,924 1,809 (865) (769) (687) (244) (91) (821) 935 279 234 (33) (156) (240) 28 29 53 (708) (1,461) (179) (253) (1,049) (2,202) 1,000 (12) (163) (175) 406 164 44 (1,310) (673) (482) (462) (405) (261) (1,631) (2,126) (2,076) 1,384 90 (1,728) 1,100 1,010 2,738 $2,484 $1,100 $ 1,010 2004- $55.55 (a) Compute and compare the Altman Z-scores for both years. (Do not round until your final answer; then round your answers to two decimal places.) 2005 z-score = 0 2004 Z-score = 0 Which of the following explain the trend in the Z-scores from 2004 to 2005? (Select all that apply.) Lockheed decreased its liquidity due to an increase in retained earnings. The market value of Lockheed's equity improved somewhat over the year. Lockheed improved its short-term liquidity by increasing cash. + Lcokheed improved its long-term liquidity by decreasing total liabilities. (b) Which of the following statements best describes the company's Altman Z-scores? OBoth the Altman Z-scores are above 3.00 which indicate the company has a very low probability of bankruptcy. OThe Altman Z-scores have increased from 2004 to 2005 which indicates the company's bankruptcy risk has decreased. OBoth the Altman Z-scores are below 1.80 which indicate the company has a very high probability of bankruptcy. OThe Altman Z-scores have decreased from 2004 to 2005 which indicates the company's bankruptcy risk has increased. Please answer all parts of the question. tatemICHIED Year Ended December 31 (In millions) Net sales Products Service Cost of sales Products Service Unallocated coporate costs Other income (expenses), net Operating profit Interest expense Earnings before taxes Income tax expense Net earnings Assets Cash and cash equivalents Short-term investments Receivables Inventories Deferred income taxes Other current assets Total current assets Property, plant and equipment, net Investments in equity securities Goodwill Income Statement 2005 2004 2003 $31,518 $30,202 $ 27,290 5,695 5,324 4,534 37,213 35,526 31,824 27,892 27,667 25,306 5,073 4,765 4,099 803 914 443 33,768 33,346 29,848 3,445 2,180 1,976 (449) (121) 43 2,996 2,059 2,019 370 425 487 2,626 1,634 1,532 801 368 479 $ 1,825 $ 1,266 $ 1,053 2005 2004 $2,484 $1,100 429 396 4,579 4,094 1,921 1,864 861 982 495 557 10,769 8,993 3,924 3,599 196 812 8,447 7,892 Balance Sheet December 31 (In millions)