A trend analysis is a statistical technique used to evaluate and identify patterns, tendencies, or trends in data over a specific period $($Tamplin$,2023).$ It involves the analysis of historical data to discern patterns and predict future movements or developments. Trend analysis is valuable for decision$-$making processes in business and other domains. For example, in finance, analysts might use trend analysis to predict the future performance of a stock based on its historical price movements. In marketing, businesses may analyze trends in consumer behavior to anticipate market demands. Overall, trend analysis provides insights that help individuals and organizations make informed decisions and develop strategies for the future.

Let's perform a trend analysis on three key line items from Ford Motor Co$.\text{'}$s consolidated balance sheet for the most recent four years: Cash and cash equivalents, Ford Credit finance receivables $($net of allowance for credit losses$),$ and Net property $($Ford Motor Co$.($NYSE:F$,$ n$.$d$.$; macrotrends, n$.$d$.).$

Cash and Cash Equivalents:

Dec $31,2022$: $$25,134$ million

Dec $31,2021$: $$20,540$ million

Dec $31,2020$: $$25,243$ million

Dec $31,2019$: $$17,504$ million

Dec $31,2018$: $$16,718$ million

Trend Analysis: The trend in cash and cash equivalents shows an increasing pattern over the past four years, indicating improved liquidity. This is a positive sign as it suggests the company has more funds available for operational needs. Additionally, the values for cash and cash equivalents are generally increasing over the four years, therefore, suggesting a positive linear trend, indicating that Ford has accumulated more cash and cash equivalents over time.

Ford Credit Finance Receivables $($Net of Allowance for Credit Losses$)$:

Dec $31,2022$: $$38,720$ million

Dec $31,2021$: $$32,543$ million

Dec $31,2020$: $$42,401$ million

Dec $31,2019$: $$53,651$ million

Dec $31,2018$: $$54,353$ million

Trend Analysis: The trend in Ford Credit finance receivables shows a decreasing pattern over the past four years. This indicates a negative linear trend, suggesting a reduction in the amount of finance receivables, possibly due to changes in lending practices or credit risk management.

Net Property:

Dec $31,2022$: $$37,265$ million

Dec $31,2021$: $$37,139$ million

Dec $31,2020$: $$37,083$ million

Dec $31,2019$: $$36,469$ million

Dec $31,2018$: $$36,178$ million

Trend Analysis: The trend in net property shows a gradual increase, suggesting ongoing investments in property, plant, and equipment. This could indicate expansion or modernization efforts by the company.

Conducting a thorough examination of Ford's trends requires several sequential actions. Consequently, additional measures should be implemented to ensure a comprehensive analysis $($Rathburn$,2023)$:

Comparative Analysis: Evaluate observed trends against industry benchmarks to gauge Ford's performance relative to its competitors.

Ratios: Compute and assess essential financial ratios $($e$.$g$.,$ liquidity, solvency, profitability$)$ to acquire a more in$-$depth insight into the company's financial well$-$being.

Qualitative Factors: Take into account qualitative elements like industry trends, economic conditions, and company$-$specific occurrences that might influence the identified trends.

Future Projections: Extend the trends into the future to anticipate potential challenges or opportunities.

By integrating these steps into the analysis, a more holistic comprehension of the trends and factors impacting Ford's financial performance will be achieved. It is crucial to approach financial analysis with a comprehensive viewpoint, considering both internal and external influences that may affect the company.Last week, you performed a trend analysis for the manufacturing company you selected in week $2.$ For this week, please refer to that company and assess the financial statements using the ratio tools you acquired in the course. Select at least one profitability, liquidity, solvency, and market valuation ratio and evaluate the results.

Based on your findings, post an initial response to the following:

What do the metrics tell you about the company$$s performance? Support your answer by explaining the results of your assessment.

If you were considering investing in the company, what other questions would you ask to gain further insight into the performance?