Essay --

1.0 Analysis on Ford Motor Company Financial Condition Based on question 1, the table in appendix 1 indicates the financial statement of Ford Motor Company from the year 2008 to 2012. According to the table, the balance sheet has shown that, there were a positive figure in Ford’s operating income from the year 2012 to 2012. Meanwhile, there were slight decrement in the balance sheet from the year 2008 to 2009, whereby has designates negative value in the operating income. A convergence in factors produced in December 2007 to June 2009, was Great Recession due to bad bank loans, improper credit ratings, lax regulatory policies and misguided government incentives that encouraged reckless borrowing and lending (Lutterell et al., 2011). Besides that, this crisis also had drastic effects towards oil price because in 2008, the oil price has increases up to 18 % from 13% per year because of the crunch. It has resulted loss of trust towards U.S government and its capitalist economic system. According to Fraser Institute Index of Economic freedom has indicated that, from the second rank of global ranking, U.S has drop to 18th in 2012 (Federal Reserve Bank of Dallas, 2012) The increasing of economic challenges and crunch in 2008 has impacted badly on the annual reports of companies, in both terms of cash flow and operating losses. In the earlier year it is predictable weak, up to 15% drop in annual operational cash flows. Following the declines in automobile sales throughout 2008 has affected the other car maker in U.S, such as, General Motors (GM) and Ford Motor Company. In this case, the automobiles industry has requested for emergency loans in order to encounter upcoming cash shortages (Brent and Glass, 2009). Finally, with the resolv... ...7 compare to Ford which is 1.01 and GM 0.985 and as the average of the year the quick ratio is in positive form which is 0.981. In the past 5 years the total average of quick ratio which is been stated in the financial statement for Toyota is 0.9726 and Ford is 0.86 where else, GM has a low average 0.821 compare to Ford and Toyota. Finally, Ford and GM managed to step away from the low quick ratio issues and went up steadily due to their dedication in maintaining their current liabilities and inventories which Toyota failed to balance which resulted the decreased growth in the year 2012. To be concluded that Ford is the leading force in the automotive industry because of the expert staff, quality products and services. This company is the perfect investment opportunity; paying close attention to the risks and regulations and protecting their investors’ interests.