Ford Motor Company Ratio Analysis

864 Words 4 Pages
The Current Ratio(A4) for Ford Motor Company is 1.19 as opposed to the 2016 average of 1.20. This ratio shows the liquidity of the company. Whether or not it has the ability to pay long-term and short-term obligations made. The industry average was 1.3, which is higher than what was calculated. All this means that the industry has more current assets than Ford does. Quick ratio(A5) for the company is 0.71 in 2017 and 0.69 in 2016. The company does not have enough liquid current assets to pay its liabilities. Yes, it is higher than the industry quick ratio, which means that other industry competitors have the same problem. Sales / Receivables ratio(A6) is 2.33 in 2017-2018, that is really a low number. The industry average was 8.5. The company's receivables are turning slower than the rest of the industry, which means that the amount of sales need to have an increase. This is a hard objective, because Ford's are tough, and built to last. For …show more content…
The company has a low ROE and this indicates how well a company's management is deploying the shareholders' capital. As long as it is not negative ROE, it should be seen as a good investment. Because there is a Return on Equity.
SWOT ANALYSIS:
Strengths, What Ford Motor's does well is that they pay their bills faster than the industry average. Their stock price has been consistent but has lowered since 2016. The company can also say that they have been around for a long time, so are reliable and have a long track record.
Weaknesses, I would say that the company is placed at a disadvantage because of the DSO, DSI, and their average accounts receivable ratio is low. They only collect its receivables 2.33 times a year.
Opportunities, Ford has an opportunity of fixing all of these problems. They are not detrimental and if they stick to the same plan, it will not harm them any worse than they

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