Ford Motors Financial Statements and Financial Ratios Analyzed

Ford Motors Financial Statements and Financial Ratios Analyzed

Hey All,

Thanks for visiting my Ford Financial Report page. On this page, you will be able to find preliminary information about Ford's current financial performance as well as some historical track records and trends. 

For a more detailed examination of Ford's financial performance, I offer two reports, which are "A Beginner's Guide to Ford Financial Analysis 2021" and "Ford Financial Report by Paul Borosky, MBA."  Both reports are written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, and include:

  • Summarized income statements for the last 5 years.
  • Summarized balance sheets for the last 5 years.
  • Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is where I use plain English to explain concepts.

 

For a MORE in-depth review of the company's financial statements and ratios, make sure to buy my "Ford Financial Report".  The financial report includes all aspects of my "Beginner's Guide" plus a whole lot more...

  • Professional financial analysis of important income statements, balance sheets, and financial ratio trends.
  • "Letter Grade" is assigned to most financial statement line items and financial ratios to help you better understand their overall trends for the last 5 years (Coming in 2021 reports).
  • Overall financial analysis summary for the company.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul, MBA.

PDF/Downloadable Version

A Beginner's Guide to Ford 2021 Financial Analysis

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Ford 2019 Financial Report by Paul Borosky, MBA.

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Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

Ford Motors: Brief Summary

Ford Motor Company, or Ford, trades under the ticker of "F" on the New York Stock Exchange (NYSE).  The company is led by Executive Chairman William Clay Ford Junior.  As for the CEO, this would be James Hackett.  The company headquarter is located in Dearborn, Michigan.  Ford competes in the auto manufacturing industry, specifically the cyclical consumer sector.  At present, the company employs approximately 190,000 people.  Their main products sold would be Ford cars, trucks, and Lincoln brand automobiles.

From a financial perspective, Ford has a market Of approximately $21.5 billion.  Their beta is 1.25.  This indicates that the company is moderately riskier as compared to the overall market.  Ford stock prices fluctuated from $3.98 to $10.56.  Their last dividend paid out was January 29 of 2020.  In the last four quarters, Ford has missed earnings estimates and three of the last four quarters.

Ford Financial Report Sources

“Ford Motors 2019 Company Analysis… For Beginners: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this report, I used Ford's 2018 10k, Ford's 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and Ford's 2019 10k annual report as the basis for information gathering. 

 

 

 

Section 1: Ford Motors Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Ford's important income statement line item trends from 2015 to 2019, in most cases.

Revenue Growth for Ford Motors:

In 2015, Ford had revenues of approximately $149.5 billion.  In the next three years, the firm would grow its revenues to approximately $160.3 billion.  However, in 2019, revenues fell to $155.9 billion.  Overall, Ford Motors has enjoyed a moderate revenue growth rate of 1.1% over the last five years.  Unfortunately, revenues did slide by almost 3% in the last year.  This is quite worrisome, especially since 2019 was a time of economic expansion.  From an investor's perspective, quarterly earnings should be monitored to ascertain whether revenues fall for the next year.  If this is the case, then it may indicate that the company is trending lower with the revenues.  This may mean reduced net profits or future cost-cutting efforts.

Ford 2021 Summary Income Statement

Column1

2021

2020 2019 2018

2017

Revenues

                 136,341

                 127,144                  155,900                  160,338

                   156,776

COGS

                 114,651

                 112,752                  134,693                  136,269

                   131,321

Gross Profit

                   21,690

                   14,392                    21,207                    24,069

                     25,455

 
SG&A

                   11,915

                   10,193                    11,161                    11,403

                     11,527

Depreciation

                     7,318

                     8,751                      9,689                      9,385

                       9,241

R & D                            -                            -                            -                            -                             -
Other

                     5,252

                     8,607                      9,472                      9,463

                       9,047

Total Operating Expenses

                   24,485

                   27,551                    30,322                    30,251

                     29,815

EBIT

                     4,523

                    (4,408)                         574                      3,203

                       4,881

Other Income

                   14,733

                     4,899                        (226)                      2,247

                       3,267

Interest Expense

                     1,803

                     1,649                      1,020                      1,228

                       1,190

EBT

                   17,780

                    (1,116)                        (640)                      4,345

                       8,159

Taxes

                       (130)

                        160                        (724)                         650

                          402

Net Income

                  17,910

                  (1,276)                           84                     3,695

                     7,628

 

Section 2: Ford Motors Balance Sheet Analyzed

For Ford Motors' balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Ford's balance sheet line item, such as cash, property, plant and equipment, and liabilities between 2015 to 2019.  Next, I then offer a summary analysis of Ford's important balance sheet line items.

Cash:   Ford Motors ended 2015 with $14.2 billion in the bank.  In the next two years, the company would increase its cash position to $18.49 billion.  However, the cash position would fall in 2018 to 16.7 billion just to rebound in 2019 to $17.5 billion.  This trend indicates that the organization was building a cash reserve between 2017 to 2015.  However, in the last two years, the organization seems to have fluctuated its cash position.  This could indicate the company is either rebuilding its cash position from 2018 after an acquisition or debt reduction.  The cash fluctuation for Ford could also mean that the organization has been restructuring.  The restructuring has led to an increase and then a reduction of their cash position. 

From an investor perspective, if the cash increases in the next year, then this shows that the firm made some type of internal decision to reduce the cash position substantially and is in the process of rebounding.  If the cash position falls, investors should be concerned about Ford's liquidity position.

Ford 2021 Summary Balance Sheet

Column1 2021 2020 2019 2018 2017
Cash                      20,540                  25,243                  17,504                  16,718                  18,492
Short Term Investment                      29,053                  24,718                  17,147                  17,233                  20,435
Account Receivable                      43,913                  52,394                  62,888                  65,548                  62,809
Inventory                      12,065                  10,808                  10,786                  11,220                  11,176
Other                              -                         -                         -                         -                         -
Current Assets                  108,996              116,744              114,047              114,649              116,801
Net PPE                      37,139                  37,083                  36,469                  36,178                  35,327
Goodwill                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -                         -
Total Assets                  257,035              267,261              258,537              256,540              258,496
Accounts Payable                      22,349                  22,204                  20,673                  21,520                  23,282
Accrued Expense                              -                         -                         -                         -                         -
Accrued Taxes                              -                         -                         -                         -                         -
Notes Payable                      49,692                  51,343                  53,946                  53,493                  51,621
LT Debt - Current                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -                         -
Total Current Liabilities                      90,727                  97,192                  98,132                  95,569                  94,600
LT Debt                      88,400                110,341                101,361                100,720                102,067
Other                              -                         -                         -
Total Liabilities                  208,413              236,450              225,307              220,474              222,792
Common Stock                      22,652                  22,205                  22,205                  22,006                  21,843
Treasury                        1,563                    1,590                    1,613                    1,417                    1,253
Retained Earnings                      35,769                  18,243                  20,320                  22,668                  21,218
Other                              -                         -                         -                         -                         -
Total Equity                    48,622                30,811                33,230                35,996                35,606
Total Equity & Liability                  257,035              267,261              258,537              256,540              258,496

Section 3: Ford Motors Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Ford Motors from 2015 to 2019.  In reviewing each of Ford's financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of Ford's Important Financial ratios. 

Ford's Current Ratio:

In 2015, Ford Motor's current ratio was 1.92.  With the gold standard for the current ratio being 1.0, this indicates that the company has substantially more current assets than operations needs.  From this, the organization should take action to reduce its current ratio to approximately 1.0.  In the next four years, the organization would do exactly this.  Between 2016 and 2019, the current ratio would fluctuate between 1.23 and 1.16, which was 2019.  This shows that the organization has taken steps to better utilize its current assets.

Ford's Total Asset Turnover:

Ford ended 2015 with a total asset turnover of approximately .66.  In the next four years, their total asset turnover would fall to .60 in 2019.  This shows that the organization is underutilizing and continuing to utilize its total assets less year-over-year.  To mitigate this problem, the organization needs to divest some of its assets, mostly fixed assets, to better align with the organization's projected sales.

Ford's Return on Assets:

As for profitability ratios, its return on assets ended 2015 at 3.28%.  In the next two years, the company would fluctuate between 2.96% in 2015 and 1.94% in 2016.  Unfortunately, though, in 2018 and 2019, return on assets would fall to 1.44% and .03%, respectively.  This means that the company made three cents for every dollar of assets.  For a manufacturer, this is a terrible position.  The organization needs to divest from some of its fixed assets to better optimize total assets controlled—shame on management.

Ford's Debt Ratio:

Ford Motor’s debt ratio ended 2015 at 53.4%.  In the next year, the organization would drop its debt ratio position to 39.2%.  In subsequent years, the firm would hold a solid 39% debt ratio, give or take a few basis points.  From an investor’s perspective, the company is doing an excellent job of keeping its debt low.  This shows that the company is well-positioned to write out recessionary times.  However, with interest rates being at historic lows, this also means that the company is missing out on opportunities to use debt for growth or research and development.  As a shareholder, I would expect the latter as compared to the former.

Ford Motors Liquidity Ratios 2019

Ratios 2019 2018
Current Ratio                           1.16                    1.20
Cash Ratio                           0.18                    0.17
Quick Ratio                           1.05                    1.08
Net Working Capital                       73,165                69,306

Ford Motors Asset Utilization 2019

Ratios 2019 2018
Total Asset Turnover                           0.60                    0.63
Fixed Asset Turnover                           4.27                    4.43
Days Sales Outstanding                       153.46                143.16
Inventory Turnover                         14.45                  14.29
Accounts Receivable Turnover                           2.38                    2.55
Working Capital Turnover                           2.13                    2.31
AP Turnover                           7.54                    7.45
Average Days Inventory                           0.04                    0.04
Average Days Payable                           0.02                    0.02

Ford Motors Profitability Ratios 2019

Ratios 2019 2018
Return on Assets 0.03% 1.44%
Return on Equity 0.25% 10.27%
Net Profit Margin 0.05% 2.30%
Gross Profit Margin 13.60% 15.01%
Operating Profit Margin 0.24% 3.48%
Basic Earning Power 0.15% 2.17%
ROCE 0.24% 3.46%
Capital Employed                     160,405              160,971
ROIC -0.05% 4.49%

Ford Motors Long-term Debt 2019

Ratios 2019 2018
Debt Ratio 39.21% 39.26%
Debt/Equity 305.03% 279.81%
Times Interest Earned                           0.37                    4.54