Ford Motor Company Analysis Essay

Executive Summary Ford Motor Company is an American automobile manufacturer founded and headquartered in Dearborn, Michigan but incorporated in the state of Delaware. The company was started by Henry Ford in 1903 and is historically famous for the creation and implementation of the assembly line in manufacturing processes. Ford’s mission is to produce and sell automobiles – cars, trucks, SUVs, etc – from the ones initially designed and engineered by Henry Ford all the way through the newer versions created in the last few years. (Profitable Growth for All, 2012) In 2011, the company performed strongly – producing revenues of $134,264,000,000 and net income of $20,213,000,000. Financial data has been gathered from the 2011 annual report and 10-K forms filed with the SEC for further analysis. Appendix A contains these reports and appendix B contains select financial ratios calculated in the analysis. The ratios are divided into six major categories: short-term liquidity, capital structure and solvency, return on invested capital, asset turnover, operating performance and profitability, and financial market measures. All six combine to provide an overall picture of financial health for the company. The below analysis provides evidence that, although Ford’s public stock may be overvalued, the company itself is in good financial health. Company/Industry Description Ford is one of the world’s largest producers of cars and trucks but also engages in other business sectors, particularly vehicle financing, through subsidiaries. The major segments of the automotive production and sales portion include Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific-Africa. Ford Motor Credit Company is the predominant financing subsidiary of the firm. (Profitable Growth for All, 2012) As of 2011, Ford Motor Company’s vehicle brands included Ford and Lincoln; between the two lines, the company sold over 5.5 million vehicles through almost 12,000 dealerships around the world. (Profitable Growth for All, 2012) Since vehicles are durable goods, Ford and the entire automotive industry is highly affected by general economic conditions. Given the 2008 financial crises and its lasting effects, the sale of durable goods has been  relatively low in recent years. In addition to economic factors, Ford must also contend with competitors worldwide. The automotive industry is highly competitive and ever growing in terms of brands and the various vehicles offered by each. The high level of competition within the automotive industry, particularly in mature markets like the United States, has led to a very competitive pricing environment. Competitive pricing in automotive sales tends to surface in the form of price discounts, marketing incentives, and financing incentives to attract customers to a particular brand since vehicles do not tend to be highly differentiated products. In terms of brand recognition, Ford is well known as one of few American car makers still thriving and is probably best known for its pick-up trucks and sports cars, particularly the Mustang. Findings and Assumptions Select financial ratios have been calculated based on Ford Motor Company’s financial statements from 2011 and can be found in Appendix B. The financial statements used for calculations are contained in Appendix A. Based on the calculations, analysis of short-term liquidity, capital structure and long-term liquidity, return on invested capital, asset turnover, operating performance and profitability, and financial market measures are included here. Ford’s short-term liquidity looks promising. The current ratio of 1.16 is good; it shows that the company can pay its short-term obligations 1.16 times. Typically, a current ratio over 1 is considered healthy, though higher is definitely better. (Wahlen et al, 2008) At first glance, Ford’s cash ratio of 0.52 seems a bit weak. It shows that, although the company can meet its short-term debts per the current ratio, it only has enough cash on hand to meet 52% of its short-term obligations. The financial statements included tend to combine cash and marketable securities into a category labeled â€Å"cash and cash equivalents†. If the cash ratio is recalculated using this value instead of simply cash than the ratio improves to 1.10, which shows much stronger liquidity capabilities. Long-term solvency for Ford Motor Company also appears to be strong. The company’s times interest earned ratio of 1.96 means that it can cover its  interest charges on current debt issues almost two times over. This is a good sign that bankruptcy is not eminent and the company is solvent in the long-run. A higher debt to equity ratio means a company gets a larger portion of its financing from creditors than shareholders, though higher is a subjective measure and depends on the industry. (Wahlen et al, 2008) Automotive manufacturers tend to have debt to equity ratios above 2 because the industry is capital intensive. (Debt/equity ratio, 2014) Ford’s debt to equity ratio in 2011 was 10.89, far higher than the industry standard, potentially due to the circumstances of the time. The financial crisis of 2008 resulted in major financial bailouts across the automotive industry. These large levels of debt to the government would increase the debt to equity ratios of all compa nies that accepted the money. 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 return on assets from 2011 is 11.3%. This number seems strong on its own but the best information comes from comparing it to either competitors or previous years in the same company since return on assets varies drastically across industries. (Wahlen et al, 2008)) In 2010, Ford’s return on assets was only 4%. This increase is a significant improvement since the two ratios show that, in 2011, $100,000 of assets would generate $11,300 in income while the same assets in 2010 would have only generated $4,000 in income. Ford’s return on equity in 2011 was 134%, a hugely impressive ratio! This calculation shows that $100,000 in shareholder equity would generate $134,000 in income. Considering the ROE in 2010 was negative, this is an extreme improvement in profitability for the company. In 2010, Ford’s asset and inventory turnover ratios were excellent. The total asset turnover of 74.9% shows that the company is effectively deploying their assets and has been able to generate $74,900 profit for every $100,000 in assets. This is not surprising considering the high return on assets analyzed earlier. Days sales in inventory for Ford in 2011 was only 19 days – meaning the company could convert inventory to sales in less than 3 weeks. Like return on assets, the acceptable level of inventory convertability varies drastically from one industry to another. (Wahlen et  al, 2008) In recent years, automotive companies have averaged over 60 days for this inventory ratio. Ford’s 2013 days sales in inventory was almost 90 days and increased by 26% to over 100 days in January of 2014. These increased numbers are likely a result of the slow economic recovery and consequential decrease in car sales. (Young, 2014) Operating performance and profitability ratios, including fixed asset turnover ratio and operating performance ratio, also show financial strength for Ford Motor Company. The fixed asset turnover ratio of 5.62 shows that the company is able to generate significant revenues from fixed assets, i.e. property, plant, and equipment. Ford’s operating performance ratio of 15.06 also shows that the company is performing strongly. Ford’s price-earnings ratio of 3.15 means the company’s stock was trading at 3 times the earnings value as of December 31, 2011. This shows that investors were willing to pay 3 times its worth to own Ford stock, signifying that earnings growth was expected. The market-to-book ratio of 4.23 means that the market value of the stock is 4.23 times the book value of the same stock. In other words, Ford’s stock was overvalued in excess of 4 times its book value. Crucial Factors Many crucial factors play a role in analyzing a company’s financial situation. Some of these factors are internal – such as management, particularly changes in management, and the business model. Other factors are external – examples include governmental action, competitors, and the overall economic state. The above analysis of Ford Motor Company incorporated numerous crucial factors when interpreting the selected ratios and their piece in the overall financial health of the company. Conclusions Overall, Ford Motor Company seems to be in good financial health as of the end of 2011. Both short and long term solvency are strong, particularly when marketable securities are included in the cash ratio calculation. Ford’s capital structure is heavily tilted towards creditors, though this is likely due to the governmental bailout and lack of investors in the slowly recovering stock market. Return on assets and return on equity are both  impressive, particularly when compared to data from the previous year. In 2011, Ford had excellent asset and inventory turnover statistics. Unfortunately, these have since declined – most likely due to the decrease in automotive sales in today’s slowly recovering economy. Operating performance and profitability standards both show financial strength and good performance, though the financial market measures indicate that investors may be more ambitious than they should be about the performance strength. References (2012). Profitable growth for all: Ford motor company 2011 annual report. Retrieved from Ford Motor Company website: http://corporate.ford.com/doc/2011 Ford Motor Company AR_LR.pdf Debt/equity ratio. In (2014). Investopedia. Retrieved from http://www.investopedia.com/terms/d/debtequityratio.asp United States Securities and Exchange Commission, (2012).Ford motor company 10-k . Retrieved from Ford Motor Company website: http://phx.corporate-ir.net/phoenix.zhtml?c=87772&p=irol-SECText&TEXT=aHR0cDovL2Fwa S50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTgwODI3MDYmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc= Wahlen, J., Baginski, S., & Bradshaw, M. (2008).Financial reporting, financial statement analysis, and valuation. (7th ed.). Mason, OH: South Western CENGAGE Learning. Young, A. (2014, Feb 13). Us new auto inventories highest since ’09; gm, volkswagen top list; kia, hyundai up most; toyota stock at ‘healthiest’ level. International Business Times, Retrie ved from http://www.ibtimes.com/us-new-auto-inventories-highest-09-gm-volkswagen-top-list-kia-hyundai-most-toyota-stock-healthiest

Difference between Social Anxiety Disorder and Shyness Research Paper

Difference between Social Anxiety Disorder and Shyness - Research Paper Example This fear results in the inability of persons suffering from the condition to function normally in social situations. Social anxiety disorder is the most common mental condition around the world and it is estimated that at least twelve percent of the world’s population of children suffer from the condition which develops into their adulthood (Bandelow, Dan & Stein 2004). Social anxiety disorder is normally categorized into two; that is general and specific. The social anxiety disorder that is generalized is normally characterized by the intense fear of someone being humiliated or embarrassed by their actions and fear of being judged by those surrounding them. Specialized social anxiety disorder is where someone is chronically afraid of specific situations. Social anxiety disorder symptoms appear at an early stage in life. For instance, it is estimated that at least eighty percent of people suffering from the disease usually start experiencing symptoms by the time they attain t he age of 20 years (Bandelow, Dan & Stein, 2004). Symptoms associated with the social anxiety disorder are categories into three categories which are behavioral aspects, physiological aspects, and cognitive aspects. Cognitive symptoms of the disorder are where someone has the fear of how they will be presented to others. Symptoms include high self-attention during any social activity and being self-conscious. Most people who suffer from the disease also set performance standards that are too high for themselves. Behavioral aspects of the social anxiety disorder include fearing to be judged by others the society, feeling humiliated or embarrassed after saying something, being uncomfortable in meeting and interacting with people and being distant when with a large group of people among others. Physiological symptoms include shaking, sweating, difficulty in breathing, palpitations, and nausea especially when in crowds and meeting new people. Shyness is a feeling of awkwardness, lack of comfort and apprehension experienced by a person when in close contact with people especially new people. Shyness is considered a feeling or a personality trait and not a medical condition (Antony, 2010). There are various misconceptions that are associated with shyness. One such common attribution is that shy people normally have high intelligence. This is entirely wrong since research has proven that there is no relation to both negative and positive between shyness and intelligence. Shyness is most common in children and normally progresses into adulthood if it is not dealt with. In different cultures, shyness is perceived differently depending on the values imposed in the cultures. For example, in some cultures, shy people are often assumed to be weak while in other cultures shyness is usually associated with intelligence and thoughtfulness. There are various reasons why people experience shyness. Genetics greatly influence shyness where the traits are found among family member s or relatives. Shyness also results from a learned behavior where a person emulates the behavior of their role model which is common in adults (Antony, 2010). Family relationships also result in shyness, especially where children are not emotionally attached to their parents.  

Mobile telephone ( listening and reading, with vocabulary ) Assignment

Mobile telephone ( listening and reading, with vocabulary ) - Assignment Example In cases of emergencies such as accidents, mobile phones can be used to call the police. On the other hand, mobile phones also provide us with entertainment such as music or videos and they are also capable of storing a lot of data such as music videos, contacts as well as pictures. The mobile phones also have other applications such as word, spreadsheets, internet, alarm, camera, convertors and many other functions. As such, I chose this topic because mobile phones help us in different ways in our daily lives. 2 What was it about? Both the video and the article selected are about the importance of mobile phones in our lives. The video uses attractive pictures of the cell phones which show different models of phones available on the market. The video shows different types of cell phones and specific features about them and the article in particular outlines the important functions of cell phones. 3 Did you read or listen first? Why? Do you think the order you chose helped you or not? How many times did you need to read & listen before you felt confident about understanding the topic and vocabulary? How do you feel about this topic, e.g. positive or negative feelings? Do you agree/disagree with the ideas?† I listened and watched the video then proceeded to read the article. I repeated the process so as to get a clear understanding of the message presented in the article as well as the video clip as well. The vocabulary used in the video and the article is very simple. I did not find any new word that was confusing since the vocabulary used was easy to understand. I felt confident after reading the article and watching the video. This topic is very interesting and I have positive feelings about it given that some of us cannot live without cell phones. I have also discovered that cell phones have become an important part of our lives since we can use them to communicate or perform other work since they have many functions similar to computers. In the modern day, we use mobile phones to do a lot of things which are related to our work and social needs. I agree with the ideas suggested in the video and the article about the importance of mobile phones. 4. Did you learn anything new from this reading & listening? What? Since I also use a mobile phone on a daily basis, I did not learn anything new about this topic. 5. Was this topic connected in any way to your future studies and if so, how do you think you can find out more about it? Somehow, the topic is connected to my future studies since I use the mobile phone to perform a lot of functions such as researching different subjects related to my area of study. 6. What was easy/ difficult about it? The topic was easy to understand since the article was written in simple terms and was straight forward. The video also showed attractive images and it explained in detail the advantages of using a mobile phone in our lives. I realised that the mobile phones can enable us to reach people in diff erent parts of the world from anywhere. We use cell phones every day so I did not discover anything new about this topic. I can safely say that the topic was not difficult in any way. 7. Which was the more challenging aspect, the reading, or the listening? Why? There was nothing so challenging in reading the article and watching the video. The article in particular outlined more details that were clearly explained

There Is No Such Thing as Rest Essay Example | Topics and Well Written Essays - 1000 words

There Is No Such Thing as Rest - Essay Example It is evidently clear from the discussion that the history of slavery in America goes back to the times of its discovery by Christopher Columbus in the early 16th century. The discovery was followed by the invasion led by Spanish, British and French rulers who wanted to exploit the vast wealth of new world. They also brought the shipload of African slaves so that could have free labor to work in the fields and do other menial work. African tribal were initially captured from the west coast of Africa and later traded as slaves in the European market. They were skilled farmers and were also known for their artwork on metal and wood. Europeans exploited them by making them slaves and using their skilled labor for free. Hence, when they were short of farm laborers in America, African slaves were brought to America, thereby starting the tradition of slavery in America. For centuries, whites have been enjoying the free labor of slaves and have become used to treating the blacks as second-c lass citizens. Slavery was made into a full-fledged tradition with Africans and nonwhites becoming slaves for life. They were deprived of their rights to live in dignity vis-Ã  -vis fair living condition, food, and education. When native population or American Indians as they were known as started to rebel, control over blacks became the major concern for the Whites. The conflict escalated into the famous 7 years war which finally concluded into American Revolution. Mantis asserts that American Revolution became the catalyst for the abolition of slavery. American Revolution was significant because it laid the foundation for free democratic America, which promoted empowerment of the people.

Social Media and Television Research Paper Example | Topics and Well Written Essays - 2000 words

Social Media and Television - Research Paper Example The same have become very useful in communication. Meetings of high orders have been held in Facebook and LinkedIn; many scholarly materials in video or print form are being shared on these sites, and many great ideas are being exchanged on the very web pages. It is on these web sites that modern technology is met. These include the advertisements of new products in the market, new job opportunities, the next big event in a field or region regarding a group, weddings, church based meetings and many more. The engagement levels in the social media automatically outwit the controlled engagement on the traditional TV programs, which are not interactive at all. Instead of watching a performer on TV, young and informed people would prefer watching the same performer on YouTube and get responses from other friends about the music or the talk being watched (Silverman, 156). At the same time, the computers and smart phones are enabling the viewers to multi task by engaging many chat options a nd reaching a vast majority instantly. Thus, the social media and its encroachment into the TV and communication world had to be handled with care to engage the usefulness while spending time proportionally. It is on this line of argument that the managers of the TV stations and inventors of programs borrowed the idea of incorporating social media into the TV news programs and other interesting programs whether they are educative, entertaining, or just informative. Literature review During this year-2013, concerns have risen on how to incorporate as many social media into the TV programs. An initiative was started whose intention was to make TV shows more interactive and appealing to the social media users in an... The paper talks about that social media are not old in the technology arena, yet it has overtaken very many traditional programs and systems, which do not use technology of the modern time. Computers have developed so drastically that within a very short span one can barely survive without the aid of computers. It is through these computers based, and Internet enabled programs that the analogue world is nearly literally shaken off the market. Television programs have always been aired, and people have watched them with diligence and pathos. News anchors and news reporters have always presented their programs using the analogue systems without any heaviness of the heart since there was no option. On the contrary, no news anchor would be comfortable with the systems used just some ten or so years ago especially in the developed world. According to the paper the use of social media in TV programs is acceptably good idea. It has attracted many viewers back to TV watching, and as has been pointed out in the literature review above, a vast majority will watch TV programs if they are captivating and more involving as compared to one in which the viewer is only a recipient of the messages. Nevertheless, there are a few issues associated with the concept of Social TV, which need to be addressed, or at least viewers be made aware of them since they have impacts upon the viewers. One of the issues is the dependency on TV programs for consolation, companionship and comfort through the process commonly referred to as Social Surrogacy Hypothesis. Trere is an analysis of social media which has gone deep into the TV programs and it is been used to promote the programs. The social media has changed the mode of presentation of programs on TVs and has brought many changes to the TV program researches. Based on the awareness that viewers will respond to the programs live, the editors have taken their work more seriously, and no shoddy work is presented.

The Story of an immigrants life Essay Example | Topics and Well Written Essays - 1250 words

The Story of an immigrants life - Essay Example The reasons why people change the place of their living are very different. In some cases it is connected with financial problems, in others with various types of segregation and so forth. The most important thing is that change of the familiar atmosphere may bring the person to the change of all his values and purposes. The aim of this work is to analyze the cultural event connected with the history of my family and include the detailed reflection on how this story affected the sense of my identity. My story starts with the city of Bangladesh, which declared its independence in December 16, 1971. The new country faced constant contradictions between the official authorities and the ambitious struggle to move forward and achieve the success. In 1995, my uncle Ahmadur Rahman moved to the USA with his family in order to provide his children with the better life conditions. His family would have never left Bangladesh, if they knew about all troubles outside the city.

Caregiver's Ethics in the Health Care Setting Research Paper

Caregiver's Ethics in the Health Care Setting - Research Paper Example â€Å"If one compares the literature on various types of child maltreatment, it will become obvious that there is a dearth of information on the concept of child neglect, despite the fact that a large number of children are neglected each year† (Tower, 2002).   Some people are mistaken and do not really think about how children interacting with strangers could be a continuation or extension of abuse from their parents, rather than a sign of risk for the child.   But in this situation of the case, it is the daycare worker who may be guilty of child abuse. The ethics are complicated in this case, though because of the concept of client confidentiality and what it means to healthcare workers.   Confidentiality raises issues between the ethical and legal implications of a relationship between a client and a practitioner as well as between other groups within the nursing, health care, and other environments of interest in terms of the client and engagement and the client-worker relationship, in which ethics should take precedence in cases in which a client is not a threat to anyone.   It remains difficult to maintain confidentiality at times, and attention must be paid to the fact that people should disclose this information later even if the conditions do not seem to be ones that will adversely affect the client. Although privacy and confidentiality are not exactly the same thing, this report must state that information shared to help resolve the issues faced by the client is productive and does not fall under the auspices of confid entiality, because it is a natural sort of dialogue between professionals who are in a helping relationship with the client.   There is the fine line to be drawn in certain situations of client/practitioner confidentiality as well as confidentiality between practitioners and confidentiality in cases like this, which involve possible child abuse.   In some cases, the client has a right to confidentiality, but it may be less important to the client and working relationship that she/he has than the rights of others whom the client may harm.