Ford Motor Company A Good Investment

Price earnings ratio is a valuation ratio of a company's current share price compared to its per-share earnings. Coca-Cola has a lower P/E ratio than Pepsi Co. The industry average for P/E ratio is 21.1. This means neither of the companies beat the industry average ratio. Between the

Ford Motor Company has been and till the date is known as the king of innovations in the automobile industry. Their research & development department and innovation of interchangeable parts in moving assembly lines resulted in extraordinary global extension for them. They are an old heritage who ruled and still doing impressive jobs in the global automobile market. Some prestigious motor brands are also owned by Ford.

In 1903 Henry Ford felt he was ready to market an automobile for the public and the Ford Motor Company was incorporated, this time with only $28,000 in cash put up by a new group of investors. That original investment was spent down to $300 before the company’s first car was sold, but from that time on the company was a success.

Ford is one of the most honorable automobile manufacturers in the world today. Henry Ford (July 30, 1863 - April 7, 1847), founded this prestigious company in 1903. In the year of 1908, he made the Ford model T car, and developed an assembly line as a means of production. This development revolutionized the industry, and allowed Ford to be able to sell millions of automobiles and become known all across the world. This company has impacted so many families' lives by giving them a great means of transportation and a product that will be trusted. However, investors need to understand companies as much as possible because strengths, weaknesses, opportunities, and threats arise within every industry. In some areas, ratings may be higher than others.

Profitability ratios show us whether the companies has the ability to generate profits from its operations. These ratios are important to the company as well as its investors. Profitability ratios let us know the overall performance and efficiency of the company. This includes

In 1903 Henry Ford felt he was ready to market an automobile for the public and the Ford Motor Company was incorporated, this time with only $28,000 in cash put up by a new group of investors. That original investment was spent down to $300 before the company’s first car was sold, but from that time on the company was a success.

Price-earnings Ratio: measures market value relative to earning by dividing market price per common share by earnings per share.

Price to earnings ration. This ratio is used in conjunction with other metrics to give analyst and investors are quick initial impression of whether a company would make a good investment. (investopedia, 2014)

In conclusion, we can state that Ford’s ratios shows a lot about the situation of the company. It’s clear, that also its book value equity and the net income were negative in the last years, it can realize a less than 3000 million $ net income only in 2009. In addition, its sales fall short of the previous ones, the operating revenue decreases continually. Besides, the total debt of the company is also very high, over the past 4 years it remained over 100 billion $ all the time, but it lessens yearly, as the interests too. The amount of Ford’s total

Financial ratios are great indicators to find a firm’s performance and financial situation. Most of the ratios are able to be calculated through the use of financial statements provided by the firm itself. They show the relationship between two or more financial variables that can be used to analyze trends and to compare the firm’s financials with other companies to further come up with market values or discount rates, etc.

Ford Motor Company is one of the largest United States automotive corporation company. The success of Ford Motor Company can be measured by analyzing and computing the three different valuation ratios, three different profitability ratios, and three financial strength ratios for three consecutive years. The outcome of the results can determine if the Ford Motor Company is a good investment. To enable investors and creditors to analyze these goals, Ford Motor Company distributes annual financial statements. With these financial statements, liquidity of Ford Motor Company is measured by analyzing factors such as the market value, market book value, price earnings ratio, enterprise value ratio, which provides the valuation ratios. Profitability ratio is the ability of business to earn a satisfactory income, which consist of gross

In addition to both short and long term solvency, a company’s return on invested capital should be analyzed when determining its financial health. Ford’s

A review of Ford’s 2010 Income Statement revealed the following information about the company’s profitability:

Ford in 2011 is on the rebound, having recovered from the darkest hours in the late 2000s. The company for the company is that many of its competitors are also rebounding, and there are significant long-run changes in the automobile industry. Ford needs to determine a strategy that will take the company through the next decade, and improve the company's competitive position. The company has four of the top fifteen best-selling cars in America, but also needs to set strategy globally, as many of the best automobile growth markets are overseas. Another strategic consideration is that CEO Alan Mulally remains in the process of changing the organizational culture at Ford, which had become stagnant and unresponsive to the changes in the industry environment.

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.