Take the 2012 10k for General Motors and Ford Motor Company

Take the 2012 10k for General Motors and Ford Motor Company. Please compare the following financial ratios:

Current Ratio
Profit Margin
Times Interest earned
Debt to assets ratio
Return on Assets
Return on Equity
Inventory Turnover Ratio
Asset Turnover Ratio

Please compare the results of the ratio, explain how the firms compare with each other and make operational suggestions on how the company could improve its ratio. This submission should be no less than two pages and no more than five.

Attached is the rubric with grading criteria. If you have any questions, please post them to the \"Ask Your Instructor\" forum.

Use the following EDGAR Search Parameters:

General Motors: General motors Co (https://www.sec.gov/Archives/edgar/data/1467858/000146785813000025/gm201210k.htm)

Ford Motors: Ford Motor CO CIK (https://www.sec.gov/Archives/edgar/data/37996/000003799613000014/f12312012-10k.htm)

Solution

General motors

Ford Motors

Current asset/current liabilities

69996\\53992

43175\\35228

Current ratio

1.296

1.226

Profit Margin

Net Profit/ Net sales

6136\\152256

5664\\126567

4.030

4.475

Time Interest eARNED

Interest/ebit

-60.88

Debt Equity rATIO

4502\\36244

105058\\15947

0.124

6.588

Return On assets

6136\\79426

5664\\190554

7.725

2.972

Return on eQUITY

6136\\37000

5664\\15947

16.584

35.518

Inventory turnover ratio

140236\\14714

112578\\7362

9.531

15.292

so comparingthese data for 2012 we can make out following notes:

1. the sales level is quite higher than the ford motors.

2. However the profit margi sustained by both the companies is almost equal. But when seen in numbers General Motors is making much money correspondently the expenses are also high and so its not giving much of a competition to Ford for its profit margin.

3. The return on asset is highly maitained by General mOTORS, SO we can say that General motors has put their asset effeciently and managingthe fund in a more elastic way.

4. As per my opinion, Ford motors can make much more effective use of their liquid assets rather keeping it idol.

5. One of the most scary part of the analysis is the debt equity ratio in which Ford motors is far behind to meet the standards set. gENERALLY THE STANDARD IS 1:2 but they have gone far from these and tcreating a trouble for themselves by taking money outside the business rather own investments.
6.From these data, we can say that Ford motors is going from very hard time as they are not doing good however by only showcasing the profit margin to a level match uo with General motors, they are not justifying with the standards, assets as well as equity, The return on equity is showcasing 35% in Ford Motors but however if we analyse the situation then we ca make out that the profits are already less and the same has been accompanied with lower equity and they have debt for 6 times than the equity.