Automotive Company Analysis

By: Choler Dill, Titus Omokore, Mihir Vashi

Industry Overview
•All 3 companies engage in the manufacturing and selling of Motor
Vehicles (used for the transportation of passengers, or passengers
and property), and Motor vehicle parts.
•The automotive industry is the 4th largest manufactured goods
export sector in the U.S. ($53 billion)
•Between 2014 and 2017, the number of cars sold in the U.S.
reduced by 20%
•There are over 133 million passenger vehicles traveling on U.S.
streets today
Size of the U.S. automotive aftermarket from 2008 to 2020 (in
billion U.S. dollars)
Ford Motor Company
• Founded in: 1903
• Current Market Cap: 43.031B
• Total Units Sold in 2016 (US only): 2,614,697 vehicles
• Products offered: Automobiles, Trucks, Buses
• 5th most valuable car brand in the world
General Motors Company (GM)
• Founded: 1908
• Current Market Cap: 48.836B
• Total Units Sold in 2016 (US only): 10 million vehicles
• Auto Brands: Buick, Chevrolet, GMC, Cadillac
• Recalled over 20 million cars in 2014
Tesla, Inc.
• Founded: 2003
• Current Market Cap: 47.16B
• Total Units Sold in 2016 (US only): 76,243
• Vehicle Models: Model S, Model X, Model 3
• 2nd oldest publicly listed American Automaker (behind Ford)
 Vertical Common-size of Income Statement
Ford Motors General Motors Tesla
2014 2015 2016 2014 2015 2016 2014 2015 2016

Revenue for sales 144,077 149,558 151,800 155,929 152,356 166,380 3,198 4,046 7,000

Automotive 94% 94% 93% 97% 96% 94% 90% 85% 80%

Cost of products sold 87% 83% 83% 89% 84% 82% 72% 77% 77%

Gross profit 13% 17% 17% 11% 16% 18% 28% 23% 23%

Operating expenses 13% 12% 14% 10% 13% 12% 33% 41% 32%

Selling expenses 8% 7% 8% 8% 9% 7% 19% 23% 20%

General expenses 5% 5% 6% 3% 4% 5% 15% 18% 12%

Total operating Expense 13% 12% 14% 10% 13% 12% -6% -18% -10%

Operating income before 0% 5% 3% 1% 3% 6% -9% -22% -11%

income taxes

net income 1% 5% 3% 1% 5% 3% -9% -22% -11%

 Vertical Common-size of Balance Sheet
Ford Motors General Motors Tesla
2014 2015 2016 2014 2015 2016 2014 2015 2016

Assets 208,615 224,925 237,951 177,501 194,338 221,690 5,830 8,067 22,664

cash and cash equivalents 5.20% 6.30% 6.70% 10.70% 7.80% 5.80% 32.68% 14.84% 14.97%

Accounts receivable, net 5.60% 4.90% 4.70% 5.10% 4.30% 4.30% 3.89% 2.09% 2.20%

Inventories 3.80% 3.70% 3.70% 7.70% 7.10% 6.20% 16.36% 15.84% 9.12%

Other assets 2.90% 1.30% 1.40% 0.90% 1.60% 1.80% 1.31% 1.43% 0.86%

Total Current Assets 66.10% 45.60% 45.60% 47.10% 35.70% 34.40% 54.54% 34.48% 27.62%

net investments in operating leases 11.10% 12.00% 12.10% 4.00% 10.40% 15.60% 13.15% 22.20% 13.83%

net property 14.40% 13.40% 13.50% 15.60% 16.10% 16.20% 31.37% 42.18% 26.40%

deferred income taxes 6.70% 5.10% 4.10% 14.30% 19.00% 15.80%

other assets 0.00% 2.10% 2.40% 1.10% 1.60% 1.80% 0.74% 0.58% 0.96%
 Vertical Common-size of Balance Sheet Cont.
Ford Motors General Motors Tesla
Liabilities 2014 2015 2016 2014 2015 2016 2014 2015 2016

Payables 9.60% 9.00% 8.90% 12.70% 12.40% 12.20% 13.34% 11.36% 8.21%

Total current liabilities 66.70% 36.60% 37.90% 37.00% 24.30% 26.30% 36.14% 34.84% 25.71%

Other liabilities and 21.10% 10.40% 10.30% 7.90% 6.50% 5.90% 2.65% 4.52% 8.35%
deferred revenue

Total liabilities 88.10% 87.20% 87.70% 79.70% 79.30% 80.10% 83.37% 85.98% 73.91%

Equity

Additional paid-in capital 10.10% 9.50% 9.10% 16.30% 14.20% 12.20% 40.22% 42.26% 34.30%

Retained earnings 4.50% 6.40% 6.60% 8.20% 10.40% 11.80% -24.59% -28.78% -13.22%

Total equity 11.70% 12.70% 12.30% 20.30% 20.70% 19.90% 15.64% 13.43% 20.97%
Liquidity Analysis
2015
2015 2015 2016
2016 2016

2015 2015 2015 2015

2016 2016 2016 2016
Debt Paying Analysis
2015 2015
2016 2016

2015 2015
2016 2016
Profitability Analysis

2014 2014 2014

2015 2015 2015
2016 2016 2016

2014 2015
2014 2015 2016
2015 2016
2016
Investor Analysis
2014 2014
2015 2015
2016 2016

2015 2014
2016 2015
2016
Recommendation: Tesla

● Rising market cap

● High gross profit margin
● Lower debt ratio and debt/equity
ratio
● Rising asset turnover and ROA
Post-Period Analysis