Financial Analysis for Managers

Running head: TEAM PAPER FINAL

Team Paper Final

Rosemary E. Beeson

Shad Brown

Scott Hubbard

Justin Marcon

Brian Philpot

University of Phoenix

FIN 324: Financial Analysis for Managers

Brad Thompson

September 2, 2003

Team Paper Final

Abstract

Running head: FORD AND GM

Ford and GM

Rosemary E. Beeson

Shad Brown

Scott Hubbard

Justin Marcon

Brian Philpot

University of Phoenix

FIN 324: Financial Analysis for Managers

Brad Thompson

August 19,2003

Ford and GM

Abstract

This paper will take a comprehensive look at two major automotive manufacturers: Ford Motor Company and General Motors. Areas that will be covered are final standing, securities, regulatory restrictions, analysis and recommendations for both companies to move into the next decade.

Ford Motor Company

Ford’s revenues did not change drastically over three years but they did change. For the year 2001 Ford had a decrease in revenue from $140,777 million to $130,827 million, and then an increase in 2002 from $130,827 million to $134,425 million. Given the fact in 2001 that Ford’s revenue decrease, they also had an operating loss of $8,862 million due to interest income. This was a major change since 2000, which resulted in a net loss of $5,468 million for the year 2001. As revenues increased in 2002 to $134,425 million they still were not as high as year 2000. This might have been due to the recession staring in early 2001, and revenue increasing in 2002 because of the zero percent interest programs.

Ford Motor Company posts a Current EPS of .53 (TTM). This rate is calculated by dividing the earnings available for common stock holders by number of outstanding shares of common stock. This rate is much lower than Ford’s competitor, General Motors Corporation. General Motors EPS is 4.62.

Ford Motor Company carries a great deal of debt in comparison with the industry average. Their listed debt to equity ratio is 22.36 compared to the industry...