You are required to complete a financial statement analysis project. This project consists of the following parts;
Part A: Financial analysis of a publicly-held company. We will use Ford’s
latest consolidated and segment financial statements (form 10K) as filed
with the SEC. You will calculate the current ratio and profit margin
for the company as a whole. You will also answer general questions
relating to Ford’s business operations.
Step 1: Locate Ford’s form 10K for the most current year.
1. Go to the SEC’s website: www.sec.gov
2. Under Filings and Forms, go to “search for Company Filings”
3. Click on : Company or fund name, ticker symbol, CIK (Central Index
Key), file number, state, country, or SIC (Standard Industrial
4. The Ticker Symbol for Ford is F
5. Locate the form 10K for the latest year. Ford files its annual
reports in February. Note the interactive document does not provide all
of the information. You will need to open the form 10K.
Step 2: In the Discussion 1.4, share your answers to the following questions. Share where you found the answers with your classmates.
1. What are Ford’s 2 major segments?
2. What are the major 3 components associated with Ford’s profitability for cars and trucks?
3. Comment briefly (one paragraph) on Ford’s planning assumptions and key metrics share.
4. Comment briefly (one paragraph) on Ford’s Market for Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities.
Step 3: Calculate the current ratio and the profit
margin for Ford . You may share your questions as well as your
calculations with your classmates in Discussion 1.4. It is useful to
understand that you may have difference calculations due to differences
in the formula for the ratio. Compare your answers to publicly-available
information to see if your answers are close. Use any of the websites
listed in the directions. Share your research with your classmates using
Discussion 1.4. Be sure to use the consolidated financial statements.
Step 4: Summarize your findings in a word document. Your final
submission will include the results from part A – D.
Part B: Discussion of
risks. You will search Ford’s form 10K and identify three majors risks
identified by the company. You will also assess the company’s market
share for automobiles. You will determine the company’s growth rate of
EPS or dividends.
Part C: Discussion of Ford’s capital structure.
You will review Ford’s consolidated financial statements. You will
calculate the company’s debt/equity ratio and the earnings per share.
You will also determine the company’s return on investment and the
weighted average cost of capital.
Part D: Discussion of Free Cash
Flow. You will determine Ford’s consolidated free cash flow. In this
part, you will make a prediction as to what the company’s stock price
would be in three (3) months. You will also review analysts’ estimates
and predictions for the past year.
Part E: An investment
recommendation. You will answer questions relating to whether the
company maximizing the wealth of its shareholders? If not, what can
they do to achieve this result? You will review your calculations and
discussion of the following 6 ratios and financial measures: Current
Ratio, Debt/Equity Ratio, Return on Investment, Earnings per Share,
Profit Margin and Free Cash Flow. You will conclude your analysis with
other observations on the firm and whether your analysis differs from
other analyses that are available. You will indicate if there is any
other measure you would want in order to make an investment
recommendation. Finally, you will make an Investment Recommendation. For
this recommendation, assume you have been asked by an investor, age 35,
who wishes to invest in conservative stocks that will provide some
income now but is mainly interested in growth over the next ten (10)
years. Would Ford meet this investor’s investment goals? Defend your
analysis in 2,000 to 2,500 words written in APA style and cite your
sources in a reference list.