1. Introduction – provide purpose of paper and overview of content
2. Ratio Analysis. Collect ratios from Ford Motor Co from the last 3 years
– Liquidity ratios: current ratio and quick ratios
– operating efficiency ratios: days of sales in inventory, accounts receivable turnover, inventory turn over, total assets turnover
– profitability ratios: gross profit margin, operating profit margin, net profit margin
– debt to equity, time interest earned, financial leverage (equity multiplier)
– Roe, Roa
2. Write 2-3 pages of analysis of the ratio results to answer the following;
– how liquid is the company
– anaylze operating efficiency ratios
– is management generating a substantial profit on the company’s assets?
– how is the company financing its assets? Discuss how much risk is associated with the financial structure of the company
– have the company’s roe and roa changed over the last 3 years? (Apply DuPont Analysis)
– what ratios have been mostly changed and why?
3. Develop a recommendation with supporting rationale as to whether the assigned company’s recent results in ratio analysis is of sufficient strength, will the company be financially sustainable over the next several years, which steps should be done to improve its financial performance, what should management do?
Use of tables encouraged