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ABSTRACT - Running Head Ford Motor Company Financial...

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Running Head: Ford Motor Company Financial Analysis 1
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Ford Motor Company Financial Analysis 2 ABSTRACT Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well- tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
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Ford Motor Company Financial Analysis 3 Ford Motor Company was founded by Henry Ford in Detroit, Michigan. Ford was a skilled craftsman, who used his skills to create an experimental car in 1896. He created a two cylinder vehicle that was capable of going up to 20 mph. Ford left his primary job in 1899 to create Detroit Automobile Company and produced the Model A in 1903. The car had an under the floor engine and sold for $850. This car sold 1,708 units in its first season. As Ford refined the product, he became increasingly focused with vehicle speed. In 1904, he released an experimental car, called the 999, which had a max speed of 91.4 mph. Later that year, the company also introduced the Model B and Model C for $2,000. Ford improved upon the prototype to create the Model K in 1905 that sold for $2,500. The 1906 model was the Model N, which sold for $500. The Model N undercut Oldsmobile’s prices and paved the way for Fords most historical innovation in 1909; the Model T. The Model T, also known as the Tin Lizzie, was a very popular model for several reasons, including the rock-bottom price of $850, low fuel consumption, large engine size, and a top speed of 40 mph. 15 million Model T's were produced over the next 18 years and was considered the hallmark American vehicle. Ford rapidly increased production over the next several years, despite a major recall of the first million cars in 1922. During their continued production expansion, Ford began selling overseas in Great Britain, France, and Germany. The company realized continual innovation was a necessity to avoid product stagnation, notably with their only car color being black. As a result, in 1927, Ford stopped production of the Model T and worked on creating more innovative products that would move both the company and the industry forward.
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