Ford Motor Company Vs General Motors

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Introduction

For this analysis I chose the Ford Motor Company and General Motors. Both companies have long been U.S. manufacturing giants in the automotive industry. The analysis spans a five-year period from 2012 to 2016.

Data Collection

All data was collected from 10K filings with the Securities and Exchange Commission and the industry standards were produced CSI Market.com.

Summary of Data

The data is broken down into four ratio groups – profitability, asset utilization, liquidity and debt utilization. These groups consist of two ratios with tables presented after each group.

Profitability Ratios
Profit Margin – The profit margin is calculated by dividing net income by sales. At first glance, one can immediately see Ford’s strong profits during the five year period with a 2014 being the exception when profits plummeted 56% from the previous year. This was due to higher costs, lower costs and several setbacks. General Motors, on the other hand, while not showing the same glitzy profit margin as Ford, remained extremely steady, although the industry norm for 2014 was 2.85%

Return on Assets – These are calculated by dividing net income with total sales. With the exception of 2014, the return was fairly steady. Both companies dipped at the end of the 2016 fourth quarter with the industry standard at 3.62% According to industry analysts, the decline was blamed on low gas prices causing consumers to snub smaller vehicles and embracing SUVs and pick-up trucks,

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