Finacial Health Paper - Evaluating Evaluating Ford Motors...

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Evaluating Evaluating Ford Motors Financial Health (NAME) University of Phoenix (CLASS) Facilitator: (NAME) (DATE) 1
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Evaluating Ford motor company is the world’s second largest automaker. Ford’s automotive brands include: Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. In a business environment it is common knowledge that successful business owners or investors are constantly evaluating the performance of the companies they are involved with. They are constantly comparing historical figures with its industry competitors. To complete a thorough examination of Ford Motor Company’s effectiveness, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Financial analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. Financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. When financial ratios are used in conjuncture with various other business evaluations, they are invaluable. The liquidity ratios determine a firm’s ability to meet short-term financial obligations. Fords current ratio for year end 2007 is $1.08. This is figured by current assets $54,243/current liabilities $50,218. Ford has $1.08 in current assets for every $1.00 of current liabilities. Ford must be able to convert each dollar of current assets into at least $.93 of cash. General Motors current ratio is $60,135/$70,308 equals $.86. General Motors $.86 in current assets for every $1.00 of current liabilities which compares to the industry average of $2.65, and must convert $.38 of each dollar of current assets into cash to meet short-term obligations. Fords quick ratio is
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