Ford and GM financial statement analysis

(1) Common-size analysis

(2) Liquidity ratios

(3) Solvency ratios

(4) Profitability ratios

(5) DuPont Model

Name: Student ID: Summary income statements and balance sheets are presented for Ford and General Motors for fiscal year 2001 (In millions). For additional information, their Web sites (and ticker symbols) are www.ford.com (F) and www.gm.com (GM). Note that these numbers are for over all operations, not just automotive. Income Statement (in millions) Fiscal Year Revenue COGS Gross Profit SG & A Interest Expense Tax Expense Net Income Ford Ford GM 12/31/2001 12/31/2000 12/31/2001 $162,412 $170,064 $177,260 125,706 140,499 130,942 36,706 29,565 46,318 13,602 11,847 23,302 10,848 10,902 8,590 (2,151) 2,705 768 (5,453) 3,467 601 Balance Sheet (in millions) Fiscal Year Cash & Marketable Securities Receivables, Trade (Net) Inventories Total Current Assets Total Fixed Assets Total Assets Total Current Liabilities Total Liabilities Total Equity Ford Ford GM 12/31/2001 12/31/2000 12/31/2001 $7,218 $4,851 $18,555 3,152 6,272 141,394 6,191 7514 10,034 36,260 39,310 193,843 33,121 37,508 34,908 276,543 284,421 323,969 44,546 43,327 64,246 268,757 265,811 304,262 7,786 18,610 19,707 Cash Flow Statement (in millions) Fiscal Year Cash Flow from Operations Cash Flow from Investing Cash Flow from Financing Ford Ford GM 12/31/2001 12/31/2000 12/31/2001 $22,764 $33,764 $9,166 (17,169) (9,867) (23,171) (2,976) (8,521) 22,372 ral Motors for fiscal mbols) are all operations, not just GM 12/31/2000 $184,632 145,664 38,968 22,252 9,552 2,393 4,452 GM 12/31/2000 $10,284 135,002 10,945 208,920 33,977 303,100 63,156 272,925 30,175 GM 12/31/2000 $10,871 11,313 (890) Name: Student ID: (1) Common-size analysis - Given the information in Sheet 1 complete the following tables: Income Statement - Common Size Ford Ford GM Fiscal Year 12/31/2001 12/31/2000 12/31/2001 Revenue 100% 100% 100% COGS Gross Profit SG&A Net Income Balance Sheet - Common Size Fiscal Year Cash & Marketable Securities Receivables, Trade (Net) Inventories Total Current Assets Fixed Assets, net Total Assets Total Current Liabilities Total Liabilities Total Equity Ford Ford GM 12/31/2001 12/31/2000 12/31/2001 100% 100% 100% following tables: GM 12/31/2000 100% GM 12/31/2000 100% Name: (2) Given the information in Sheet 1, a) Calculate the liquidity ratios for Ford and GM. Show calulations. b) Rate the liquidity from 1 to 10 for each company. A rating scale is estmated by company for liquidity on a 1-10 scale. A 1 represents severe problems and 10 excellence. Ratings of 1-2 should be considered red flags, and ratings of 9-10 could be green flags. The use of ratings depends on judgment and can be based on a combination of rules of thumbs (e.g., a current ratio below 1 can be considered "bad news"), industry comparisons, and market averages. Ford 2001 Year Current Quick Rating (1-10) Student ID: the liquidity ratios for Ford and GM. Show calulations. y. A rating scale is estmated by company for liquidity on excellence. Ratings of 1-2 should be considered red use of ratings depends on judgment and can be based t ratio below 1 can be considered "bad news"), industry GM 2001 Name: Student ID: (3) Given the information in Sheet 1, a) Calculate the solvency ratios. Show Calculations. b) Do you have any concerns about their abilities to meet their debt obligations? Year Liabilities to Equity Interest Coverage (Times Interest Earned) Ford 2001 y ratios. Show Calculations. b) Do you igations? GM 2001 Name: Student ID: (4) Given the information in Sheet 1, calculate the profitability ratios. Show calculations. Ford Year 2001 Gross Margin Profit Margin (PM) Return on Assets (ROA) Return on Total Equity (ROE) profitability ratios. Show calculations. GM 2001 Name: Student ID: (5) Given the information in Sheet 1, calculate the DuPont Model. Show Calculations. DuPont Model Ford GM Year 2001 2001 Profit Margin (PM) Asset Turnover (AT) Return on Assets (ROA) Financial Leverage (FL) Return on Equity (ROE)