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?

The company chosen was Ford.

Be3low is the figures used for the trend analysis

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.