Financial Accounting Project - Ratio Analysis of Fixed Assets NEED ASAP

Author Note

This paper is being submitted on October 19, 2014, for Esther Tejada

A141/ACG1033 Section 07 Financial Accounting II - 2014 Fall Quarter

TransDigm Group (NYSE: TDG)

Company Profile and Leadership

Formed in 2003, when Warburg Pincus acquired TransDigm Inc. – a company established in 1993, TransDigm Group Inc. is a global leader in the production of aerospace components, systems and sub-systems.

The members of the Board of Directors of TransDigm Group,(NYSE: TDG), are: W. Nicholas Howley – Chief Executive Officer and Chairman of the Board of Directors, William Dries – Retired Senior Vice President and Chief Financial Officer at EnPro Industries, Merv Dunn – Chief Executive Officer of Commercial Vehicle Group, Michael Graff – Managing Director of Warburg Pincus LLC and a General Partner of Warburg Pincus & Co., Sean P. Hennessy – Senior Vice President, Finance and Chief Financial Officer, The Sherwin- Williams Company, Douglas W. Peacock – Past Chairman of the Board of Directors and Chief Executive Officer of TransDigm Inc., Robert J. Small – Managing Director of Berkshire Partners LLC and John Staer – Chief Executive Officer of Satair A/S. The key members of the Management of the firm are: W. Nicholas Howley – Chief Executive Officer and Chairman of the Board of Directors, Raymond F. Laubenthal – President and Chief Operating Officer, Gregory Rufus – Executive Vice President, Chief Financial Officer and Secretary, Robert S. Henderson – Executive Vice President, Bernt G. Iversen, II – Executive Vice President in-charge of Business Development and Mergers & Acquisitions.

Products / Services, Major Customers, Major Suppliers

TransDigm Group Inc.’s major products are commercial and military aircraft components in three major segments of: Airframe, Power and Control, and Non-Aviation. These include: include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, NiCad batteries and chargers, engineered latching and locking devices, rods and locking devices, engineered connectors and elastomers, cockpit security components and systems, specialized cockpit displays, aircraft audio systems, specialized lavatory components, seatbelts and safety restraints, engineered interior surfaces and lighting and control technology. Most of TransDigm Group revenue is from after-market sales realized throughout the useful life of aircrafts – mostly a period of 30 years. The major suppliers of the firm’s inputs are leading providers of engineered industrial products like The Sherwin- Williams Company and EnPro Industries. The major customers include the leading aircraft manufacturing firms such as Boeing, as well as the U.S. Military.

Historical Stock Price

TDG’s annual stock price has been on a bullish up-run since 2009, due to a myriad of reasons. First, the Group has a unique positioning that provides a high barrier of entry to the competition and this provides it with sustainable high cash flows, sales and profit margins. Secondly, TDG has been very vibrant in making strategic acquisitions such as: 100% outstanding stock of McKechnie Aerospace Holdings Inc. for approximately $1.27 billion, acquired the actuation business of Telair International Inc. in 2010. In 2011, TDG did not rest on its acquisition laurel. It acquired the following in 2011: Aero Quality Sales; Schneller Holdings LLC and Harco Laboratories Inc,. In 2012, the following Aero-Instruments Co., LLC joined the TDG family through an acquisition. In 2013, TDG, acquired the following companies: Arkwin Industries, Inc.; Whippany Actuation Systems, LLC and Aerosonic, LLC.

All these have contributed positively to the TDG’s upline, bottom line and consequently on the stock price – by enhancing the net income, total assets, earnings per share and dividend per share.

Graph showing the market price of TransDigm Group Inc at various dates.

References

PriceWaterhouse Coopers. (2011). Mission Control. PWC.

TDG Annual Report. (2013).

TDG official website. www.transdigm.com

Yahoo Finance. (2013). TransDigm Group Incorporated and Aerosonic Corporation. Yahoo.

Dec 31 2011 Dec 31 2012 Dec 31 2013 Feb 28 2014 TransDigm Group Inc - Stock Price 95.67999999999999 133.05 160.12 178.14