1. Comparative Ratio Analysis
Afnan AlOyouni
Fatima Alibrahim
Roba AlGothmi
Sara AlDossary
FINA3314: Financial Statement Analysis
Section 201
December 23,2012

2. Outline Introduction Ratio Analysis Findings Conclusions

3. Ford Motor is an American automaker company, which was initiated by Henry Ford in Ford Motor is rated as the third largest automaker in the world and one of the supreme auto constructors of all time.

4. Ford have generated some great cars including the Thunderbird, Model T, Fairlaine, Galaxie, Falcon, and Mustang. They became gradually conscious of need for revolutionizing their cars to meet current time. They have done that by collective production, innovative styles, low prices, technology, and customer satisfaction.

5. Ford Motor Company would go on to become one of the major gainful companies in the world, in addition to being one of the survivors of the huge depression period. The Ford family has permanently governed the Ford Motor Company for over 100 years. Ford now embraces two trademarks: Ford and Lincoln.

6. General Motors Company was founded in 1908 by William C. Durant
General Motors Company was founded in 1908 by William C. Durant. General Motors has been the biggest company in the most important industry in the world. It was the world’s largest carmaker from 1931 to 2008, when it was surpassed by Toyota.

7. IN 2008, GM Asked the federal government for the cash it wanted to stay alive in the industry. They received $9 billion in federal aid at the order of President George W. Bush

8. In 2009, G. M. sold its good assets to a new, government-owned company
In 2009, G.M. sold its good assets to a new, government-owned company. Brands like Chevrolet, Cadillac and GMC were folded into the new company, renamed the General Motors Company. The new G.M. is far smaller and leaner. Brands like Saturn, Hummer and Pontiac were shut down or sold

9. In its new life, the automaker is proving that it can be profitable at a lower sales volume. The company announced in February 2011 that it earned $4.7 billion in 2010, the most in more than a decade. It was the first profitable year since 2004 for G.M., which became publicly traded in November 2010, ending a streak of losses totaling about $90 billion.

10. Ratios Liquidity Ratios Activity Ratios Leverage Ratios
Profitability Ratios

11. General Motors Company Ford Motor Corporation
In General Motors we found that the current ratio was 1.2 and in Ford Motor was so that this indicate the General Motors was better than the Ford Motor.
In General Motors we found that the acid test ratio was and in Ford Motor was so that this indicate the General Motors was better than the Ford Motor.
General Motors Company
Ford Motor Corporation
Current Ratio
1.231
0.796
Acid Test Ratio
0.938
0.702

12. General Motors Company Ford Motor Corporation
Average Collection Period
24 days
22 Days
In General Motors we found that the average collection period were 24 days and in Ford Motor were 22 days this means the Ford Motor was better than the General Motors because it was faster to collect a counties receivable.

13. General Motors Company Ford Motor Corporation
General Motors is better than Ford Motor because by using $1 of fixed assets they can generate sales.
General Motors is better than Ford Motor because by using $1 of total assets they can generate sales.
General Motors Company
Ford Motor Corporation
Fixed Assets Turnover
6.545
3.870
Total Assets Turnover
1.039
0.764

14. General Motors Company Ford Motor Corporation
Ford Motor has more borrowing than General Motors
Ford Motor is more exposed for the risk of having an unstable earnings or expenses.
General Motors Company
Ford Motor Corporation
Debt Ratio
73.63 %
91.5%
Debt to Equity
2.793 times
times

15. General Motors Company Ford Motor Corporation Operating Profit Margin
The time interest earned is about the earnings before interest or tax which called (EBIT). It’s a ratio that measures how could any business pay its debt off in the long term
Operating profit margin is a ratio that is used to measures how the firm is efficient and their pricing strategy
General Motors Company
Ford Motor Corporation
Times Interest Earned
10.474
2.566
Operating Profit Margin
3.76%
8.34%

16. General Motors Company Ford Motor Corporation
Net Profit Margin
6.11%
0.14%
Return on Equity
24.1%
134.5%
NPM measures how much out of every dollar of sales a company actually keeps in earnings
ROE is about how much the firm is making profit with the amount of money that the shareholder have invested

17. General Motor is more liquid than Ford, which means that it can meet financial needs as they arise. Also, when it comes to the ability to collect cash from customers, GM collects A/R faster than ford, which gives information that GM has stronger credit policies than Ford.
When it comes to the activities of both companies, we found also that GM is doing better than Ford. It has a better ability to generate sales from investing in fixed assets and in all assets.
When it comes to leverage, GM is better than Ford. The company doesn’t have as much assets financed by debts as Ford. GM also considered less risky and is able to pay its debt easily.
Finally, GM is more profitable than Ford because, the firm is more efficient and have good pricing strategy, they have control over the costs, and they have good net worth.
Conclusion