Ford_Balance_Sheet_2017.pdf[+]&GM_Balance_Sheet_2017.pdf[+]

Please review the above Balance Sheets for General Motors Company and Ford complete the table below by calculating the following ratios for each company using the 12/31/17 numbers?Then, you are asked to determine which company has the better current ratio, debt ratio, and return on total assets ratio.

Please round your answers to 2 decimal places. Remember, the debt ratio and return on assets ratios are percentages.So, if your answer is .0654, then it needs to be entered as 6.54, which is 6.54%.

FordGeneral MotorsWhich is better?Current Ratio: 1

: 1

Select an answer

Ford

GM

Debt Ratio%

%

Select an answer

Ford

GM

Return on Assets(enter negative with - sign)%

%

Select an answer

Ford

GM

Current Ratio

You'll need to calculate this by taking the 2017 Total Current Assets and dividing it by the Total Current Liabilities.Please round your answer to 2 decimal places.

For example, Ford's Current Ratio at the end of 2015 was 2.12.This tells you that they have $2.12 in current assets to every $1 in current liabilities.We usually prefer a ratio of 1.5 or better to 1.This is a measure of the company's ability to pay their short-term debt as they come due.

Debt Ratio

You'll need to calculate this by taking the 2017 Total Liabilities and dividing it by their 2017 Total Assets.You will then have to move the decimal place to the right 2 places to get a percentage.Please round your answer to 2 decimal places.

Which company has the higher Debt Ratio?This tells us how much of a company's assets are financed by debt.This indicates risk.The higher the debt ratio, the higher the risk.

Return on Assets

You'll need to calculate this by taking the 2017 Net Income and dividing it by their Average Total Assets.Average Total Assets will be calculated by taking the 2017 Ending Total Asset Balance and adding it to the 2016 Ending Total Asset Balance and divide the resulting number by 2.You will then have to move the decimal place to the right 2 places to get a percentage.Please round your answer to 2 decimal places.

This tells us how a good a company is at using the assets they have invested in the company to generate net income.A higher number indicates the company is doing a better job using the assets they have to generate net income.

Remember, net income is found in the Income Statement, not the Balance Sheet.Ford_IS_2017.pdf[+]&GM_Income_Statement_2017.pdf[+]