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FIN4504 Finance and Investment in Ford Motors Company

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Investments -- Equity Analysis Project (FIN4504)

   

Added on  2020-05-08

FIN4504 Finance and Investment in Ford Motors Company

   

Investments -- Equity Analysis Project (FIN4504)

   Added on 2020-05-08

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Finance and investment
FIN4504 Finance and Investment in Ford Motors Company_1
TABLE OF CONTENTSIntroduction – Ford Motors Company.......................................................................................3Performance of Ford Motors Company.....................................................................................3Calculations................................................................................................................................3S&P 500 and Industry analysis..................................................................................................5Ford Motors Company v/s Automobile Industry.......................................................................6Recommendation........................................................................................................................7References..................................................................................................................................9Appendices...............................................................................................................................10
FIN4504 Finance and Investment in Ford Motors Company_2
INTRODUCTION – FORD MOTORS COMPANYFord Motor Company (globally known as “Ford”), a second largest the United States basedmultinational deals in automobiles and automaking of cars as well as commercial vehicles,was founded in 1903. The company owns few brands like SUV, Troller and FPV; has stakesin many countries and is also jointly holds ventures across the world (Annual report of FordMotors Company, 2016). Although a public company, it is one of the largest family-ownedglobal business and is listed on New York Stock Exchange, NYSE. It was Ford whointroduced Fordism, meaning manufacturing of cars and management of industrial workforceon a large scale by assembly line moving. It is also ranked fifth globally for production ofvehicles and is eight on Fortune 500 Companies’ list. Ford worldwide had itsmanufacturingoperationslike in the United States of America, Canada, the United Kingdom,China, Australia, Germany, Mexico, Turkey, Argentina, Brazil, South Africa and cooperativeagreement in Russia.PERFORMANCE OF FORD MOTORS COMPANYLooking at the performance of the company from its financial statements, revenue hasincreased gradually since the year 2014, but the net income has not grown in proportion to itsrevenue. Similarly, the assets as well cash dividends declared by Ford has shown a risingtrend, which shows that the company is performing well for the equity holders who have alsogrown in number since 2014 (Bodie, 2013). Ford currently has two automobile divisions Fordand Lincoln, with highest no. of dealerships with Ford and Ford-Lincoln and lowest withLincoln. Ford reveals an average of negative return of 0.44 % in comparison to a positivereturn of 0.66 % of S&P 500. Ford has a good payout ratio of 63 % with dividends risingwith the growth rate of 13.98 %. With the P/E ttm of 12.92 and P/E Forward of 12.27, Priceearnings Growth comes at 3.52 %, which is reasonable. But the Present Value Growthopportunity is negative with one third percent, which is a negative sign for the investors toput in money for a long term. CALCULATIONS
FIN4504 Finance and Investment in Ford Motors Company_3

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