Financial Ratio Analysis Report Of Ford Motor Company

• Incorporated in 1919, Ford (F) Motor Company engages in automotive production and financial services. Automotive unit operates on a global scale in Americas, Europe and Asia. Financial segment offers purchase credit in the form of retail and wholesale financing. Ford’s competitors that currently trade in stock markets include General Motors (GM), Toyota (TM), Honda (HMC), Tesla (TSLA), Nissan (NSANY), Daimler AG (DDAIF), and Volkswagen AG (VLKAY).

Income Statement (in Millions)

SALES NET INCOME EPS DIVIDEND

2001 $160.504 -$5.347 -$2,95 $1,20

2002 $162.258 $355 $0,19 $0,40

2003 $166.095 $646 $0,35 $0,40

2004 $172.316 $3.184 $1,59 $0,40

2005 $176.835 $1.629 $0,86 $0,40

2006 $160.065 -$12.629 -$6,72 $0,05

2007 $168.884 -$2.836 -$1,43 $0,00

2008 $143.584 -$14.775 -$6,50 $0,00

2009 $116.283 $2.712 $0,86 $0,00

2010 $128.954 $6.561 $1,66 $0,00

• Ford’s golden year was 2005 where company made $176.8 billion in revenues. Since then, sales reduced to $130 billion. Ford was deeply affected from the financial crises in 2008. However, we see improvement in 2010 where Ford earned $1.66 per share.

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• Dividend History: Ford Company did not pay dividends in the last 4 years. Over the years, annual dividends reduced from $1.2 to 0. Last year’s dividend yield was 0%. In fact, Ford has not paid any dividends since 2006.

BALANCE SHEET

CURRENT ASSETS CURRENT LIABILITIES LONG TERM DEBT

2001 $276.543,00 $268.757,00 $167.173,00

2002 $295.222,00 $289.632,00 $167.331,00

2003 $310.723,00 $299.072,00 $177.998,00

2004 $295.487,00 $278.050,00 $129.330,00

2005 $269.459,00 $256.017,00 $119.980,00

2006 $279.196,00 $282.661,00 $171.832,00

2007 $279.264,00 $273.636,00 $168.530,00

2008 $216.052,00 $231.773,00 $151.669,00

2009 $192.040,00 $199.860,00 $131.635,00

2010 $164.687,00 $165.360,00 $103.988,00

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• When we look at Ford’s current assets, we observe a declining trend since 2003. In 2003, the value of current assets was $299 million whereas in 2010 current assets amount to only $165 million. Current liabilities are highly volatile and they barely match the current assets. The only good news is the reduction in Ford’s long-term debt.

Historical Fundamentals

P/E PROFIT MARGIN (%)

2001 -7,90 -3,30

2002 71,00 0,20

2003 30,50 0,40

2004 9,10 1,80

2005 12,00 0,90

2006 -1,10 -7,90

2007 -5,70 -1,70

2008 -0,80 -10,30

2009 6,70 2,30

2010 7,80 5,10

• Ford’s average P/E ratio is extremely volatile and in years 2006, 2007, and 2008 it was negative. Net Profit margin is also remarkably low and in the same years, it was negative. Ford was able to achieve the maximum profit margin of 5.1% in 2010. However, 2008 was a disastrous year where net profit margin was -10.3%.

Direct Competitor Comparison

F PVT1 GM TM Industry

Market Cap: 56.95B N/A 54.39B 140.74B 27.43B

Employees: 198,000 N/A 209,000 318,001 24.31K

Qtrly Rev Growth (yoy): -1.30% N/A 27.20% 5.80% 13.30%

Revenue (ttm): 133.36B 17.71B1 131.04B 246.36B 58.17B

Gross Margin (ttm): 15.73% N/A 10.35% 13.39% 21.40%

EBITDA (ttm): 13.98B N/A 9.10B 23.37B 5.77B

Operating Margin (ttm): 6.54% N/A 1.66% 3.00% 6.46%

Net Income (ttm): 7.26B -3.78B1 638.00M 6.75B N/A

EPS (ttm): 1.89 N/A -0.02 4.30 2.88

P/E (ttm): 8.68 N/A N/A 20.86 15.85

PEG (5 yr expected): 0.49 N/A 1.17 0.67 0.46

P/S (ttm): 0.42 N/A 0.41 0.57 0.54

• Ford’s gross margin of 15.73% is below industry average of 21.40%. In 2010, operating margin was 6.54% which is slightly higher than the industry average of 6.46%.

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