Compare the two companies based on their ratios. Use the last column in the template to detail how each company is doing in relation to the ratios. Explain the significance of how the company ratios compare to each other. RATIOS Ford Motor Co  General Motors Co ANALYSIS Profitability Ratios (%)       Gross Margin  15.01 17.9   EBITDA Margin  8.66 15.55   Operating Margin  2 3   Pre-Tax Margin  2.71 5.81   Effective Tax Rate  14.96 5.54   Financial Strength       Quick Ratio 1.04 0.73   Current Ratio  1.2 0.92   LT Debt to Equity  2.8 1.88   Total Debt to Equity  7.14 5.85   Interest Coverage  4.54 14.05   Valuation Ratios       Price/Earnings Ratio  4.9 35.6   Price to Sales P/S 0.2 2.2   Price to Book P/B 0.9 1.2   Free Cash Flow per Share 2.26 -6.95   Management Effectiveness (%)       Return On Assets  1.43 3.6   Return On Investment  2.18 6.02   Return On Equity  10.38 21.43   Efficiency       Receivable Turnover 2.5 4.74   Inventory Turnover 12.68 11.78   Total Asset Turnover  0.62 0.67   Free Cash Flow/Net Income 1.97 -1.28

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.1E
icon
Related questions
Question

Compare the two companies based on their ratios. Use the last column in the template to detail how each company is doing in relation to the ratios. Explain the significance of how the company ratios compare to each other.

RATIOS Ford Motor Co  General Motors Co ANALYSIS
Profitability Ratios (%)      
Gross Margin  15.01 17.9  
EBITDA Margin  8.66 15.55  
Operating Margin  2 3  
Pre-Tax Margin  2.71 5.81  
Effective Tax Rate  14.96 5.54  
Financial Strength      
Quick Ratio 1.04 0.73  
Current Ratio  1.2 0.92  
LT Debt to Equity  2.8 1.88  
Total Debt to Equity  7.14 5.85  
Interest Coverage  4.54 14.05  
Valuation Ratios      
Price/Earnings Ratio  4.9 35.6  
Price to Sales P/S 0.2 2.2  
Price to Book P/B 0.9 1.2  
Free Cash Flow per Share 2.26 -6.95  
Management Effectiveness (%)      
Return On Assets  1.43 3.6  
Return On Investment  2.18 6.02  
Return On Equity  10.38 21.43  
Efficiency      
Receivable Turnover 2.5 4.74  
Inventory Turnover 12.68 11.78  
Total Asset Turnover  0.62 0.67  
Free Cash Flow/Net Income 1.97 -1.28  
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 3 images

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College