The objective of this practice is to study the performance of a listed company (either on TSX, NYSE or NASDAQ) by examining some key ratios for return and profitability over the last five years. You should be able to understand the relationship between financial numbers and various business strategies that the company is pursuing.

Reminder for analysis: Ben Graham said regarding security analysis in his classic, The Intelligent Investor in 1949:

"Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it - even though others may hesitate or differ." (You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.)" (Graham, 2006, p. 524)

General Instructions

The information should only come from the 10-K (annual report) of your chosen company. You may use other sources only to help you understand technical terms about the company's products, operations, or the industry.

Explain what you found (your interpretation of the results),

As discussed in class, the 10-K is where the company discloses material information about its business including its audited financial statements. You are allowed to use other sources but make

sure that your data is coming directly from the company's annual report.

The Mount has recently subscribed to a financial database called MergentOnline. Mergent provides financial information of both US listed and international companies. You can learn about the database here:

https://www.mergentonline.com/noticescm.php?pagetype=about

You can access the database from visiting Business research guide through our

library website:

http://libguides.msvu.ca/c.php?g=114487&p=5015597

From campus, you can use the direct link: http://www.mergentonline.com I will show you how to use the database in the class.

Specific Instructions

In an excel spreadsheet, input the relevant information that you need to calculate the following ratios in the format prescribed below for the last five years for Ford Motor Credit Company LLC.

Categories Ratios 2019 2018 2017 2016 2015

-Short-term solvency/ - Current Ratio

Liquidity ratio - Quick Ratio

-Long-term solvency or - LT Debt/Equity

financial leverage ratios- Time Interest Earned/

Interest coverage ratio

-Asset management/ - Inventory Turnover

Turnover ratio - Receivable Turnover

-Profitability measures - Gross profit margin

-Operating profit margin

-Net profit margin

-Return on invested capital

• Fill in the ratios for each category using the listed Ratios from 2015-2019 in the spreadsheet ForFord Motor Credit Company LLC

When explaining, discuss the company's financial performance explaining/interpreting the ratios (or changes to the ratios) that you calculated from the financial statements. You may like to compare your company's ratio with a major competitor or the industry average. Try to identify the causes of the major differences between the two companies.

Comment specifically on whether the company has durable competitive advantage (or wide moat) based on the ratio. You may also like to consider the qualitative factors discussed in the class. The appended materials for chapter 4 can come handy when you are commenting on wide moat.

2019 Annual Report- http://apdfs.mergentassets.com/13/2465513.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Security-Token=FwoGZXIvYXdzEIf%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDJjasoNTgsR1FirKLyKRA8VL9v1mdb9t%2F2nt6CixDiaDvrSPQNz545R3jDuTNrazcZzT1vJznY4g5hfyZRYvXC98UJ2xcEmBjvQ9fc6X24VUcVobjIp98el5fUkX%2Bc8d6DK43J3sFcPQ4S2YfHIwSGMzD9IVKwenh1anPegnZfqoh%2BYK0GErg9ITLycRn2UcglMrG4Sk8sVprwRkeq7csIc8f9hjq4QyWTSsRznOJ3xnMlHeoN7ON2HzGcSmTg0odoQC1Yl9S2hRwhCyCfNW9LFQ%2Bm7fSvsvLdFef8tw4MoaM%2F4LWwV2ZoujZsMleqc5vCkZt2U47tjdcH7ENE%2BuAt%2FXraK3qZg9Htp4RFCK9mAAeGMKCCP9aYQPGHbB08HKz%2FO1Hsql5qAihR7s2NzQi2%2B5gi5eRunq1B3KZejBSwu7HeUG6EpKvwNYWz7S%2F%2BrqIbxUxWJ7m4ZQikIigeDCrLoDTVkchKAqEIzHTFANuaZ49f3kZtay2Xp0jFujBoOlhw000VgRXm1cKgHbuOh%2BiN4YgZehrGfx5HvDbQL3%2BLyYKMGzmPwFMjUnCDQ1iUStAbRrwnzYwAXGID7dvthLUmcW8jOqDONgyl9lXnVSwshInAslH8JIQ3otyaYVdA%3D%3D&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAVUZYQLBHWKG6QHII%2F20201013%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20201013T220524Z&X-Amz-SignedHeaders=host&X-Amz-Expires=1200&X-Amz-Signature=bd46af71d8c5ba7c6f4d83212af7cc9181ac455c891eac0c1f7e25de3b086567

2018 Annual Report- http://apdfs.mergentassets.com/14/2465514.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Security-Token=FwoGZXIvYXdzEIf%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDJjasoNTgsR1FirKLyKRA8VL9v1mdb9t%2F2nt6CixDiaDvrSPQNz545R3jDuTNrazcZzT1vJznY4g5hfyZRYvXC98UJ2xcEmBjvQ9fc6X24VUcVobjIp98el5fUkX%2Bc8d6DK43J3sFcPQ4S2YfHIwSGMzD9IVKwenh1anPegnZfqoh%2BYK0GErg9ITLycRn2UcglMrG4Sk8sVprwRkeq7csIc8f9hjq4QyWTSsRznOJ3xnMlHeoN7ON2HzGcSmTg0odoQC1Yl9S2hRwhCyCfNW9LFQ%2Bm7fSvsvLdFef8tw4MoaM%2F4LWwV2ZoujZsMleqc5vCkZt2U47tjdcH7ENE%2BuAt%2FXraK3qZg9Htp4RFCK9mAAeGMKCCP9aYQPGHbB08HKz%2FO1Hsql5qAihR7s2NzQi2%2B5gi5eRunq1B3KZejBSwu7HeUG6EpKvwNYWz7S%2F%2BrqIbxUxWJ7m4ZQikIigeDCrLoDTVkchKAqEIzHTFANuaZ49f3kZtay2Xp0jFujBoOlhw000VgRXm1cKgHbuOh%2BiN4YgZehrGfx5HvDbQL3%2BLyYKMGzmPwFMjUnCDQ1iUStAbRrwnzYwAXGID7dvthLUmcW8jOqDONgyl9lXnVSwshInAslH8JIQ3otyaYVdA%3D%3D&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAVUZYQLBHWKG6QHII%2F20201013%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20201013T220739Z&X-Amz-SignedHeaders=host&X-Amz-Expires=1200&X-Amz-Signature=e4ab72f9d247508102a672a2071bdd459a217cd1daa52dc4853b6eb880d4b3f5

2017 Annual Report- http://apdfs.mergentassets.com/80/2100080.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Security-Token=FwoGZXIvYXdzEIf%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDJjasoNTgsR1FirKLyKRA8VL9v1mdb9t%2F2nt6CixDiaDvrSPQNz545R3jDuTNrazcZzT1vJznY4g5hfyZRYvXC98UJ2xcEmBjvQ9fc6X24VUcVobjIp98el5fUkX%2Bc8d6DK43J3sFcPQ4S2YfHIwSGMzD9IVKwenh1anPegnZfqoh%2BYK0GErg9ITLycRn2UcglMrG4Sk8sVprwRkeq7csIc8f9hjq4QyWTSsRznOJ3xnMlHeoN7ON2HzGcSmTg0odoQC1Yl9S2hRwhCyCfNW9LFQ%2Bm7fSvsvLdFef8tw4MoaM%2F4LWwV2ZoujZsMleqc5vCkZt2U47tjdcH7ENE%2BuAt%2FXraK3qZg9Htp4RFCK9mAAeGMKCCP9aYQPGHbB08HKz%2FO1Hsql5qAihR7s2NzQi2%2B5gi5eRunq1B3KZejBSwu7HeUG6EpKvwNYWz7S%2F%2BrqIbxUxWJ7m4ZQikIigeDCrLoDTVkchKAqEIzHTFANuaZ49f3kZtay2Xp0jFujBoOlhw000VgRXm1cKgHbuOh%2BiN4YgZehrGfx5HvDbQL3%2BLyYKMGzmPwFMjUnCDQ1iUStAbRrwnzYwAXGID7dvthLUmcW8jOqDONgyl9lXnVSwshInAslH8JIQ3otyaYVdA%3D%3D&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAVUZYQLBHWKG6QHII%2F20201013%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20201013T220807Z&X-Amz-SignedHeaders=host&X-Amz-Expires=1200&X-Amz-Signature=e3f94150c1f78b358cd5c55bc19fab548ac7a1a50269196891f49bdd6c6ab51c

2016 Annual Report- http://apdfs.mergentassets.com/85/2018785.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Security-Token=FwoGZXIvYXdzEIf%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDJjasoNTgsR1FirKLyKRA8VL9v1mdb9t%2F2nt6CixDiaDvrSPQNz545R3jDuTNrazcZzT1vJznY4g5hfyZRYvXC98UJ2xcEmBjvQ9fc6X24VUcVobjIp98el5fUkX%2Bc8d6DK43J3sFcPQ4S2YfHIwSGMzD9IVKwenh1anPegnZfqoh%2BYK0GErg9ITLycRn2UcglMrG4Sk8sVprwRkeq7csIc8f9hjq4QyWTSsRznOJ3xnMlHeoN7ON2HzGcSmTg0odoQC1Yl9S2hRwhCyCfNW9LFQ%2Bm7fSvsvLdFef8tw4MoaM%2F4LWwV2ZoujZsMleqc5vCkZt2U47tjdcH7ENE%2BuAt%2FXraK3qZg9Htp4RFCK9mAAeGMKCCP9aYQPGHbB08HKz%2FO1Hsql5qAihR7s2NzQi2%2B5gi5eRunq1B3KZejBSwu7HeUG6EpKvwNYWz7S%2F%2BrqIbxUxWJ7m4ZQikIigeDCrLoDTVkchKAqEIzHTFANuaZ49f3kZtay2Xp0jFujBoOlhw000VgRXm1cKgHbuOh%2BiN4YgZehrGfx5HvDbQL3%2BLyYKMGzmPwFMjUnCDQ1iUStAbRrwnzYwAXGID7dvthLUmcW8jOqDONgyl9lXnVSwshInAslH8JIQ3otyaYVdA%3D%3D&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAVUZYQLBHWKG6QHII%2F20201013%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20201013T221022Z&X-Amz-SignedHeaders=host&X-Amz-Expires=1200&X-Amz-Signature=dd508ca431eea12d39a5d486c8cb6ad3a4c044a36a9aba81992160219ab94719

2015 Annual Report- http://apdfs.mergentassets.com/33/2465833.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Security-Token=FwoGZXIvYXdzEIf%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDJjasoNTgsR1FirKLyKRA8VL9v1mdb9t%2F2nt6CixDiaDvrSPQNz545R3jDuTNrazcZzT1vJznY4g5hfyZRYvXC98UJ2xcEmBjvQ9fc6X24VUcVobjIp98el5fUkX%2Bc8d6DK43J3sFcPQ4S2YfHIwSGMzD9IVKwenh1anPegnZfqoh%2BYK0GErg9ITLycRn2UcglMrG4Sk8sVprwRkeq7csIc8f9hjq4QyWTSsRznOJ3xnMlHeoN7ON2HzGcSmTg0odoQC1Yl9S2hRwhCyCfNW9LFQ%2Bm7fSvsvLdFef8tw4MoaM%2F4LWwV2ZoujZsMleqc5vCkZt2U47tjdcH7ENE%2BuAt%2FXraK3qZg9Htp4RFCK9mAAeGMKCCP9aYQPGHbB08HKz%2FO1Hsql5qAihR7s2NzQi2%2B5gi5eRunq1B3KZejBSwu7HeUG6EpKvwNYWz7S%2F%2BrqIbxUxWJ7m4ZQikIigeDCrLoDTVkchKAqEIzHTFANuaZ49f3kZtay2Xp0jFujBoOlhw000VgRXm1cKgHbuOh%2BiN4YgZehrGfx5HvDbQL3%2BLyYKMGzmPwFMjUnCDQ1iUStAbRrwnzYwAXGID7dvthLUmcW8jOqDONgyl9lXnVSwshInAslH8JIQ3otyaYVdA%3D%3D&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAVUZYQLBHWKG6QHII%2F20201013%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20201013T221100Z&X-Amz-SignedHeaders=host&X-Amz-Expires=1200&X-Amz-Signature=5588934307551a818b01c5020ece8f83c023d19e49922d93330f26ee00bfd417