You are required to complete a financial statement analysis project. This project consists of the following parts;
Part A: Financial analysis of a publicly-held company. We will use Ford’s latest consolidated and segment financial statements (form 10K) as filed with the SEC. You will calculate the current ratio and profit margin for the company as a whole. You will also answer general questions relating to Ford’s business operations.
Part B: Discussion of risks. You will search Ford’s form 10K and identify three majors risks identified by the company. You will also assess the company’s market share for automobiles. You will determine the company’s growth rate of EPS or dividends.
Part C: Discussion of Ford’s capital structure. You will review Ford’s consolidated financial statements. You will calculate the company’s debt/equity ratio and the earnings per share. You will also determine the company’s return on investment and the weighted average cost of capital.
Part D: Discussion of Free Cash Flow. You will 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. You will answer questions relating to whether the company maximizing the wealth of its shareholders? If not, what can they do to achieve this result? You will 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. You will conclude your analysis with other observations on the firm and whether your analysis differs from other analyses that are available. You will indicate if there is any other measure you would want in order to make an investment recommendation. Finally, you will 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? Defend your analysis in 2,000 to 2,500 words written in APA style and cite your sources in a reference list.
