PHILIP MORRIS TREND ANALYSIS

Philip Morris has experienced many ups and downs over the past few years. They announced on Friday, February 1, 2002 the hiring of a new Chief Executive Officer to help the company through this unstable period. From a trend analysis completed during this time period, Philip Morris’ instability in the market place becomes very clear.
Philip Morris’ current and quick ratios as compared to their industry standards have been declining over the last two years. In 1999 these ratios exceeded the industry standards by sizeable margins. By the end of 2000 these ratios had dropped dramatically and have fallen below industry standards. This would lead us to believe that Philip Morris does not have enough current assets on hand to cover their current liabilities. If it were necessary to cover all current liabilities, Philip Morris would have to liquidate some of their property, infrastructure, or equipment. In 1999 Philip Morris’ current assets were more than adequate to cover t...