OMM 622 Week 2 Assignment 2.docx

Understanding is gained when they are accompanied by

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understanding is gained when they are accompanied by and reviewed with additional monetary documents. Financial ratio analysis Determining the financial ratio of a company will ultimately inform leaders on their organizations position when looking to achieve its own goals, being compared to similar companies within the automobile industry, and aiming to be become a competitive entity in the business sector as a whole. It is made clear that in order to determine the current financial ratio for any given company, one must divide the current assets (125,174,000) by the current liabilities (19,308,000). In doing so, one will find that the ‘current’ financial ratio of Ford Corporation is 6.483. When comparing to industry standards, it is paramount that leaders first calculate the debt ratio. In doing so, one must divide the total dollar amount of liabilities (173,137,000) by the total dollar amount of assets (189,406,000) to get a ratio of 0.9141. Now, after taking the total dollar amount of debt (105,058,000) and dividing that number by the equity (15,947,000), one will get a ratio of 6.587. So, it becomes easy to conclude that compared to standard operating procedures within the automobile industry, Ford Corporation has done an excellent job in maintaining its relevance and competitiveness.
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4 FORD Conclusion
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