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Final Instructions for Project 2
Watch this videos for instructions
https://www.youtube.com/watch?v=FnDA73Tbhbw
https://www.youtube.com/watch?v=anPO5pSNM0U&feature=youtu.be
I’ve reviewed your outline and either responded that it was adequate or gave specific ideas on improvements that need to be made.
You are now ready to begin writing your final project. The question that I expect from all of you is how long should your paper be. As with any good instructor, I’ll be ambiguous. I can’t imagine, however, that a good paper will be less than 5 pages at 1 to 1.5 spacing.
You should use and cite sources. I am not concerned about the format of the citations. Web sites are perfectly appropriate resources.
I’d like these turned in no later than the last Sunday before finals week. They will take time to read and grade. I will gladly look at drafts and provide feedback over the next week or so. Going into the final days of the semester, it may be too busy to provide feedback.
Project 2
https://www.youtube.com/watch?v=FnDA73Tbhbw
The purpose of this project is for you to develop skills to evaluate the financial information made available to us for all public corporations.
Your final assignment will be to write an evaluation of a company – your choice – that will be due final’s week. Until then we’ll do some exercises to help you find and accumulate the information you will need.
The evaluation will of course center on the company’s financial statements. Your goal will be to incorporate some of what we’ve covered – and will cover – into your analysis.
Where do we access the information? I offer the following choices but you are by no means limited to these options:
http://www.reuters.com/finance/stocks
http://moneycentral.msn.com/home.asp
using one of the sites above or one of your choosing:
Choose a public company that you think you want to analyze. Tell me what that company is.
Find the ticker symbol of that company. Usually from 1 to 4 letters. For example, Microsoft’s ticker symbol is MSFT. Tell me what the ticker symbol is?
I picked Ford Motor Company their ticker symbol F
Ford Motor Company – Annual Report
https://s22.q4cdn.com/857684434/files/doc_financials/2017/annual/Final-Annual-Report-2017.pdf
Tell me the company’s last closing price.
Tell me the company’s P/E ratio.
Tell me the company’s previous year’s earnings per share (EPS).
You need to use and talk about these financials in the paper and you can find these from that websites.
AN EVALUATION OF FORD MOTORS COMPANY
I. Introduction
Ford Motors recorded a tremendous increase on its financial performance during the first quarter of 2018, beating the analyst estimates. The company recorded a revenue of $41.96 billion and a net income of 1.7 billion thus increasing by 7% from the previous quarterly earnings. The improved performance was attributed to the cost cutting objectives such as dropping the sedan model of cars particularly in North America reduced taxes that were undertaken by the company. However, the second quarter recorded poor performance missing analyst’s estimates and reducing earnings by 50% from the previous quarter.
This research project critically looks into the viability and soundness of investing in Ford Motor company while at the same time providing recommendations that can be undertaken to not only improve on the company’s financial performance but also give advice to investors on the best choice of whether to invest or not to invest.
Despite having recorded poor performance during the second quarter of 2018, Ford motors can be a good company to invest in due to strong brand presence, improving financial performance and the necessary managerial action to improve company’s performance.
II. History of the Company
A. Support
Ford Motor Company was started on 16th June 1903 and founded by Henry Ford. The company is based in Michigan the city of Dearborn.
Example
The company has grown tremendously to survive during the great depression and emerge as one of the top five automakers.
Example
The company has also been under the control of family for more than 100 years. In addition to this, the company has also before owned top brands such as Aston Martin, Land rover, Mercury, Volvo and jaguar. Today, the company has two divisions which include Lincoln and Ford.
B. Support
At the start of its operation, the company manufactured several types of vehicles that runs from model A to K.
Example
In 1904, the company achieved the global status and the Ford of Canada became its initial location.
Example
Over the years, the company expanded to other parts of the world such as Ireland, France and England leading to opening up assembly lines and manufacturing plants.
C. Support
Towards 1919, the company manufactured about 50% of automobiles used in the United States while 40% in England.
Example
The tremendous market led to its strong growth and performance particularly the sales of Model T’s in the United States of America.
Example
In today’s competitive environment, Ford motors has innovate different types of cars according to different market needs and lays emphasis on technology, performance, fuel economy and safety standards.
III. Industry in which it competes
A. Support
Ford motor company operates in the automobile or automaker industry.
Example
The automaker industry comprises of a variety of organizations and companies that are involved in development, design, marketing, and manufacturing and selling of automobile or motor vehicles.
Example
Some of the best automobile companies include Bayerische Motoren Werke (BMW), Toyota, Volks Wagen, Ford Motor, Nissan, Mercedes Benz, Honda, and Audi among others.
B. Support
Some of the aspects that impact the automotive industry include exchange rate, political stability, economic growth, inflationary levels and technological advancements.
Example
Strong economy, politically stable and technologically advanced improvescompany’sperformance through increased production levels and reduced costs of operation.
Example
Additionally, low levels of inflation and stable exchange rates helps to improve company’s revenue since revenues are not eroded due to inflation and increased currency rates.
C. Support
The automotive industry acts as a watchdog for the economy and consumer spending thus having a huge contribution to the growth domestic product.
Example
The automotive industry accounts for about 4% of the GDP of the United States of America.
Example
Addition ally, the industry accounts for about $100 billion yearly on research and development and is considered to be capital intensive.
IV. Company Strategy
A. Support
The company’s strategy encompasses between customization and standardization particularly on its international markets while at the same time the United States of America as its domestic market as unique to international market.
Example
The corporate strategy is centered on cost leadership where the management objective is to manufacture quality automobiles at considerable price.
Example
Additionally, the company’s product lines comprises of a variety of automobiles across different categories that offer affordable types of cars on every category.
B. Support
Ford Company has divided its different international markets into different segments according to interests and the offerings across every region. Therefore, the company is able to customize its products that sit different markets.
Example
For example, in one of its markets, North America, the company comprises of muscle cars and trucks that are not offered on other parts of its market.
Example
Additionally, Ford motors introduced its model Kuga to the South African consumer and took it from Europe.
C. Support
Ford motors have also embarked on cost cutting strategies I order to improve its performance and reduce unnecessary costs.
Example
The company has announced plans to reduce its spending by $25 billion through simplifying its product lines such as emphasis on about 30 models instead of 100 different models across its different markets.
Example
Additionally, the company has also altered its architecture designs and introduced new modules such as suspension design etc. furthermore, the company intends to drop the next generation sedan type and hatchbacks.
V. Detailed analysis of company financials
A. Support
The financial ratios used to perform the financial analysis on the company include return on invested capital, profitability, operating profit, capital structure, short term liquidity and financial market structure.
Example
Ford motors have maintained a relatively stable current ration that indicate the ability to meet short term obligations.
Example
For a period of 13 years, the company’s current ratio has been 0.25 as the lowest level and 4.32 at the highest level with 1.31 as its average range.
B. Support
The company has a relatively mild solvency especially on the long term outlook as shown by the interest coverage and the debt equity ratios.
Example
The company has maintained an interest coverage ratio of between 6 and 4 which implies the company can cover the interest expenses that are more than two times over.
Example
The company’s debt to equity ratio has been ranging from 3.94 to 2.56 over the past 5 years that is an advantage which keeps its leverage low.
C. Support
In order to determine the financial capability and performance of the company, it is imperative to look into the operational performance.
Example
The company has recorded an average fixed asset turnover averagely at 5 which indicates strong ability to generate revenue from its fixed assets.
Example
Additionally, the price to earnings ratio of the company ranges from 17 to 5 over the past few years, which indicates strong performance on its stock price.
VI. Conclusion
In conclusion, despite having recorded poor performance during the second quarter of 2018, Ford motors can be a good company to invest in due to strong brand presence, improving financial performance and the necessary managerial action undertaken to improve company’s performance over the next few years.
A. Summarize the main points
Ford Motors has a strong international brand presence and consumer market for its products and service of about 7.3 % market across the world.
Fords changing business strategy such as introducing electric cars will increase its profitability over the coming years.
Despite missing analyst estimates in the second quarter, the company has recorded strong consistent financial performance over the past decade and survived financial tremors.
B. Make your recommendation
From the above in-depth analysis, I would recommend that an investor should invest in Ford Motor Company with holding period of at least 5 years in order to realize good returns on investment. This is due to the corporate strategy of the company to adopt electric cars that has a large untapped market hence creating possibility of growth over the next 5 years. Additionally, the company’s market share has remained consistent and growing over the past 5 years. However, it is imperative for the investor to not expect positive growth over the short term and intermediate future.
References
Cachon, G. P., & Olivares, M. (2010). Drivers of finished-goods inventory in the US automobile industry. Management Science, 56(1), 202-216.
Ford Motor Company – Financials. (n.d.). Retrieved from https://shareholder.ford.com/investors/financials/annual-reports/default.aspx
Govindan, K., Kannan, D., & Noorul Haq, A. (2010). Analyzing supplier development criteria for an automobile industry. Industrial Management & Data Systems, 110(1), 43-62.
Levinson, W. A. (2012). Henry Ford’s lean vision: Enduring principles from the first Ford motor plant. Productivity Press.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION. (n.d.). Retrieved from https://www.sec.gov/Archives/edgar/data/37996/000003799618000015/f1231201710-k.htm
| Rubric for BFIN 322 Final Project | ||||||||||
| Organization: 15% | ||||||||||
| a. | Organization includes both attention getter and purpose statement | 5 | 4 | 3 | 2 | 1 | 0 | |||
| b. | Logical sequencing which matches order of purpose statement | 5 | 4 | 3 | 2 | 1 | 0 | |||
| c. | Smooth transition between sentences and paragraphs | 5 | 4 | 3 | 2 | 1 | 0 | |||
| d. | Conclusion summarizes findings and addresses implications of research | 5 | 4 | 3 | 2 | 1 | 0 | |||
| Total: | ||||||||||
| Idea and Contents: History and Industry: 15% | ||||||||||
| a. | Clear description of the company’s history and the industry in which it competes | 5 | 4 | 3 | 2 | 1 | 0 | |||
| b. | Unambiguous identification of the industry in which the company competes. | 5 | 4 | 3 | 2 | 1 | 0 | |||
| c. | Writer provides relevant examples and illustrations of clear points | 5 | 4 | 3 | 2 | 1 | 0 | |||
| d. | Writer identifies the company’s position within the industry | 5 | 4 | 3 | 2 | 1 | 0 | |||
| Total: | ||||||||||
| Idea and Contents: Strategy: 15% | ||||||||||
| a. | Strategy clearly identified | 5 | 4 | 3 | 2 | 1 | 0 | |||
| b. | Appropriate strategic model cited | 5 | 4 | 3 | 2 | 1 | 0 | |||
| c. | Writer provides relevant citations, examples and illustrations of critical points | 5 | 4 | 3 | 2 | 1 | 0 | |||
| d. | Plausible strategic predictions/analysis | 5 | 4 | 3 | 2 | 1 | 0 | |||
| Total: | ||||||||||
| Idea and Contents: Financial Analysis: 40% | ||||||||||
| a. | Major financial data identified | 5 | 4 | 3 | 2 | 1 | 0 | |||
| b. | Depth of Ratio analysis | 5 | 4 | 3 | 2 | 1 | 0 | |||
| c. | Historical data logically presented | 5 | 4 | 3 | 2 | 1 | 0 | |||
| d. | Conclusion summarizes findings within financial data | 5 | 4 | 3 | 2 | 1 | 0 | |||
| Total: | ||||||||||
| Conventions: 15% | ||||||||||
| a. | Paragraphing reinforces organization | 5 | 4 | 3 | 2 | 1 | 0 | |||
| b. | Grammar, usage and sentence structure contribute to clarity of writing | 5 | 4 | 3 | 2 | 1 | 0 | |||
| c. | Words are specific and accurate | 5 | 4 | 3 | 2 | 1 | 0 | |||
| d. | Punctuation, Capitalization and spelling are correct | 5 | 4 | 3 | 2 | 1 | 0 | |||
| Total: | ||||||||||
