Ford Motor Company Performance Evaluation

Running Head: FORD MOTOR COMPETITIVE ANALYSIS
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FORD MOTOR COMPANY

FORD MOTOR COMPANY
Table of Contents
Overall performance evaluation........................................................................................ 3
Recommendation.......................................................................................................... 4
References..................................................................................................................... 6

FORD MOTOR COMPANY
Comparative Analysis
Overall performance evaluation
In this report two companies have been analyzed on the basis of ratio analysis technique
to find out which is better and suitable for the purpose of future investment. Under this process
the ratio analysis technique has been used and it can be judged on the basis of liquidity,
profitability and solvency (Carreras-Simó & Coenders, 2019).
In terms of liquidity ratios, which are the real determinants of whether the company will
be able to settle the current costs with the help of the current assets the position of Ford motors is
overall feasible. The current ratio over the period of last three years for Ford Motors is 1.2 times
in year 2017, and it however decreased in the year 2018, but again improved a bit and reached to
1.19 times (Ford Motors Company, 2019). Further while comparing the position, with the world
class competitor Tesla Inc, the current ratio is 0.86 times in 2017 and reached to 1.13 times,
which is still lower than Ford. While the quick ratio showcases that Ford Company is able to
collect the cash in faster manner as the acid test ratio is 1.11 times, 1.05 times and 1.08 times. On
the contrary Tesla Inc. displayed the results as 0.56, 1.14 and 0.80 times. This implies that Ford
Motor has a better quick ratio, but the cash ratio reveals an upside, down position. This could be
a tricky situation but despite having cash in hand Tesla is not able to handle the current costs
well than Ford Motors and hence, Ford Motors scores well (Carreras-Simó & Coenders, 2019).
While analyzing the solvency of the companies and against the industry average it can be
ascertained that debt to equity ratio is highest for Tesla at 18.09 in the year 2019, and on the
other hand, the graph of acquiring the funds through equity was seen to have a falling effect.
This indicates that Ford Motors have changed the approach and hence the debt to equity ratio is
2.78 which is still higher and needs improvement. Due to high leverage the companies’ ability to