Financial Analysis: General Motors and The Ford Company

Financial Analysis Objectives

The principal objective of this financial analysis was to compare the 2017 to 2019 financial

statements of the two of largest American automakers, GM and Ford. This study examines GMs'

and Ford's balance sheet and income statements by means of horizontal and vertical analysis.

Vertical analysis, also known as common-size analysis, conveys each line item on a financial

statement as a percent of the base amount for the same year.

Another method used to compare

the percentages was by horizontal analysis. In horizontal analysis, every amount given was

compared to the selected base year (oldest). For both company, 2017 was the base year. Year-to-

Year change analysis also helped explain the change within the different year percentages.

Lastly, the study includes various financial ratios, which study GMs' and Ford's liquidity, long

term debt paying ability, profitability, investor analysis, cash flow, projected balance sheet and

income statement.