Part A: Financial analysis of a publicly-held company. Use Ford’s latest consolidated and segment financial statements (form 10K) as filed with the SEC. Calculate the current ratio and profit margin for the company as a whole. Answer general questions relating to Ford’s business operations.
Part B: Discussion of risks. Search Ford’s form 10K and identify three majors risks identified by the company. Assess the company’s market share for automobiles. Determine the company’s growth rate of EPS or dividends.
Part C: Discussion of Ford’s capital structure. Review Ford’s consolidated financial statements. Calculate the company’s debt/equity ratio and the earnings per share. Also determine the company’s return on investment and the weighted average cost of capital.
Part D: Discussion of Free Cash Flow. 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. Answer questions relating to whether the company is maximizing the wealth of its shareholders? If not, what can they do to achieve this result? 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. Conclude your analysis with other observations on the firm and whether your analysis differs from other analyses that are available. Indicate if there is any other measure you would want in order to make an investment recommendation. Finally, 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?