1. Ford Motor Company
SIC
Consumer Retail

2. Agenda Business Overview Financial Indicators and Statements
Threats and Opportunities
Price Performance and Technical Analysis
Earnings Announcement
Final Notes and Recommendation

3. Business Segments Automotive Services: Financial Services
Ford & Lincoln
Operate Dealerships and Car Repairs
Provide Cars for Rental Companies and Government
Financial Services
Retail Financing, Direct Financing Leases, Loans to Dealers, and Provides Insurance Services.

4. Business Breakdowns

5. Corporate Management CEO - Mr. Alan R. Mulally since September 2006
In 2006, Ford borrowed $23.6 billion to finance a major restructuring and to provide “a cushion”
In 2007, Ford divested Jaguar, Land Rover, Aston Martin, and Volvo.
Ford was the only US auto manufacturer not to declare bankruptcy in 2008
Due to bankruptcy, General Motors and Chrysler are expected to be dramatically downsized, but Ford is “poised to emerge as the largest US automaker.”

6. Basic Info Indicator F TM GM Industry Average Market Cap 59.24B
P/E (ttm)
9.41
20.4
10.82
13.5
PEG
0.48
0.77
0.76
P/S
0.46
0.52
0.54
Dividend na
1.2%

7. Operating Efficiency/Liquidity
Indicator F TM GM
Profit Margin
5.09%
2.52%
4.55%
Operating Margin
6.90%
2.64%
4.28%
ROA
3.12%
1.10%
Current Ratio
1.55
1.18
1.13

9. Balance Sheet

10. Cash Flow

11. Opportunities Domestic Market
Better recovery following the recession in comparison to its major competitors: General Motors and Chrysler.
Adding a Ford Flex model in attempts to capture a greater amount of domestic consumption of hybrid vehicles.
Emerging Markets
Pursuing a major expansion plan, Ford aims to tap into the growing market potential in the countries, especially those in Asia.
The company expects 70% of its growth to come from the Asia Pacific and Africa region in the next decade.
Since last year, Ford has invested $510 million in China and $500 million in India as part of its expansion plan.

12. Opportunities (cont’d)
Weakness of Toyota
Has been hurt by recall and safety issues
Production remains below capacity after earthquake/tsunami
Strength of the Yen = expensive exports
Also applies to all other Japanese automakers: Nissan, Honda, Mazda, Subaru, others
Debt Reduction
Ford paid down about $3B in debt in the 1st Quarter of 2011 (reduced debt from 19.1B to 16.6B)
Will save $190M per year in interest
Ford’s credit rating remains BB-minus, but S&P’s said that Ford’s focus on debt reduction is “a positive factor”

13. Threats Slow Economic Recovery Rising Oil/Gas Prices
Higher Costs of Production
Recalled 1.3 million Ford F-150 Trucks
Problems with Airbags in its most popular pickup
$16.6 billion in debt
BB-minus credit rating by S&P

14. Price Performance (1 yr)

15. Technical Analysis
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16. Earnings Announcement
Record first quarter profit since 1998
Profit per vehicle in US rose more than 30%
Growth driven by higher profitability on compact cars
Seventh straight profitable quarter
Warned of parts shortages and commodities prices

17. Portfolio Analysis Durable goods vs. non-durables Cash position
Stability for summer

18. Recommendation
Buy a full position of $18,000