Ford Motor Company

This essay Ford Motor Company has a total of 2088 words and 12 pages.

Ford Motor Company

GROUP PROJECT

ACC 505 - FINANCIAL ACCOUNTING 12/01/96

TABLE OF CONTENTS

DESCRIPTION PAGE

INTRODUCTION........................................................1

LIQUIDITY...........................................................1-3
Working Capital...................................................1
Current Ratio & Quick Ratio.......................................2
Receivable Turnover & Average Days\' Sales Uncollected.............2-3
Inventory Turnover & Average Days\' Inventory on Hand..............3

PROFITABILITY.......................................................3-7
Profit Margin.....................................................3-4
Asset Turnover....................................................4-5
Return on Assets..................................................5
Debt to Equity....................................................5-6
Return on Equity..................................................6-7

CONCLUSION..........................................................7-8

APPENDIX............................................................9

INTRODUCTION

Ford Motor Company, a large United States automotive corporation, strives for
success each and every year. The success of Ford Motor Company, as well as
other corporations, can be measured by analyzing the two most important goals of
management, maintaining adequate liquidity and achieving satisfactory
profitability. Liquidity can be defined as having enough money on hand to pay
bills when they are due and to take care of unexpected needs for cash, while
profitability refers to the ability of business to earn a satisfactory income.
To enable investors and creditors to analyze these goals, Ford Motor Company
distributes annual financial statements. With these financial statements,
liquidity of Ford Motor Company is measured by analyzing factors such as working
capitol, current ratio, quick ratio, receivable turnover, average days\' sales
uncollected, inventory turnover and average days\' inventory on hand; whereas
profitability analyzes the profit margin, asset turnover, return on assets, debt
to equity, and return on equity factors.

LIQUIDITY Working Capital

Ford Motor Company\'s working capital fluctuated significantly in the years
1991-1995. This phenomenon is directly attributable to the fact that Financial
Services current assets and

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