Financial Analysis Both General Motors Thesis

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Ford's value in 2007, was 0.01, compared to GM's value of 0.64. Comparatively, GM is using its assets in a much more efficient manner than Ford is.

V. Conclusions

Both General Motors and Ford have shown specific problems in their operational activity, as this is reflected in the financial ratios that have been analyzed. The most important problem that Ford seems to have was reflected by both the asset management and profitability ratios. Indeed, from our investigation, we were able to determine that not only Ford is not using the assets it has efficiently in order to generate higher revenues and sales for the company, but the values in 2007 were almost error-like small (0.01 in most cases).

At the same time, General Motor's asset management and profitability ratio values were somewhat higher and, generally, showed an ascending trend, but I don't think we can go as far as saying that General Motor is doing a good job in this area, simply because it is only a comparative approach and the fact that it is outperforming Ford does not necessarily mean that, on an absolute scale, it is actually managing its assets efficiently.

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Additionally, the values usually are much smaller than 1 and generally to small to draw a positive conclusion from this.

One of the significant problems that General Motors seem to have, and this was reflect both in the liquidity ratios and in some of the asset management ratios, is the very high levels of inventory. This shows a complex set of problems at General Motors. First of all, it production is not being efficiently sold and it is being stocked up rather than launched on the market.….....

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