Internal Audit

Strengths: Ford motor is one of the pioneers in auto manufacturing sector. It possess large market share of auto market and operating globally so Ford is recognized as a globally oriented company. Ford offers a large variety of products to its consumers and its product line caters all income classes and social classes of society. Ford has a large frame work of research and development so it keeps on inventing new products to cater the new market needs. After rise in fuel prices a need was felt in market that in future consumers will prefer to buy those vehicles which consume less fuel so being proactive Ford has already started working on producing hybrid energy vehicles and it has also started a joint venture with British Petroleum to develop hydrogen power. Ford has various brands and all of them have their own unique and distinct brand image which helps Ford to attract consumer from all sectors of life. Ford has been successful in developing its image as a patriotic company in United States due to which its customers are very loyal to it and prefer its products even if they lag behind in some features. Ford is also considered to be an environment friendly company because it has invested a lot of funds in efforts to develop environment friendly cars and to develop alternate fuels. It also ran an awareness campaign about breast cancer which also enhanced its corporate image. Despite that Ford sales are facing a declining trend but still its revenue has been above $150 million and its total assets have increased as compare to last year. Even after recession Ford has been successful to maintain its market share constant in European markets over last five years. It is ranked 7th in global fortune 500. Weakness: Most prominent weakness of Ford motors is its poor performance in North American region due to which Ford is compelled to close down its 14 manufacturing facilities in North America. There is a dire need to look into it that what¶s going wrong in there? Because if it went unaddressed that may be these factors who caused closed down in North America may cause trouble in operations in other regions too.

Ford is unable to offer desired products to their consumers after increase in fuel prices consumers are demanding vehicles which consume less fuel and Ford competitor¶s like Honda and Toyota are offering these kind of vehicles that¶s why ford is constantly losing its market share to its competitors. Ford is also liable for paying large amount of unfunded pension and health care obligations.Other weakness is also of almost equal importance.000 miles. After being hit by recession. After analyzing its financial statements it is evident and Ford is operating with large amount of debt than its competitors which is making its operations costly and resulting into less profit generation or even loss.07 4 0. 108 plants globally 0.28 0. because Ford is losing its market share constantly over last 4 years due to this.08 4 0.15 0.000 jobs up till now these job cuts are affecting its corporate image and performance too. And due to constant recalls Ford corporate image has severely affected and also wasted a lot of funds too.18 0.05 3 4 0. Ford is offering just 36000 miles warranty where as its competitors are offering warranties of their vehicles up to 100. Ford is constantly laying off its resources in result of it Ford has cut almost 30.05 0.32 0. Key Internal Factors Weight Rating Weighted Score Strengths Great Customer loyalty Diversity in products range Totals sales have been above $150 million constantly over past 4 years Dominate constant market share in European market from last 5 years Operates in 6 continents.06 3 0.20 .

04 4 0.1 1 0.1 1 0.05 0.05 0. declining market share in US markets Closing down 14 manufacturing facilities in North America Recognized as a Racial brand(white dominated) Reported loss of $14 billion at end of year 2007 Offering less warranty as compared to its competitors Operating with large debt as compare to its competitor¶s Cut 30.02 0.08 0.04 2 0.06 Weaknesses Inefficient marketing.20 0.1 .02 1 0.Catering all income classes Various product lines Patriotic brand image Ranked 7th on global fortune 0.20 0.1 0.1 0.08 0.03 4 4 2 0.08 1 0.1 1 0.1 0.32 0.16 0.03 0.000 jobs and more expecting at cost of low performance Poor operation declaration Total 1 2.03 1 0.1 1 0.

64 0.574 0.686 Industry Average N/A N/A N/A N/A Activity Ratios: 2006 2005 2004 Industry Average Inventory turnover Fixed assets turnover Total assets turnover A/C receivable turnover Average Collection Period 20 11.94 0.33 1.34 1.78 1.85 8.5 1.8 11.717 2005 1.38 16 3.1 Leverage Ratios: 2006 Debt to total asset Debt to Equity LTD to Equity TIE ratio 1.9 0.53 11.83 4.01 81.7 N/A .71 2005 0.22 4.733 Industry Average 1.Financial Ratio Analysis Liquidity Ratios: 2006 Current Ratio Quick Ratio 0.4 49.7 13.95 19.586 0.16 17.85 32.17 0.2 N/A 18.23 10.128 2004 0.94 17.93 0.65 -0.98 2004 0.25 30.

Profitability ratios: 2006 2005 2004 Industry Average Gross Profit Margin Operating Profit Margin Net Profit Margin -0.64 -3.005 0.012 0.04 0.045 3.14 16.I EPS -0.07 0.078 0.11 N/A N/A 2004 0.2 0.217 N/A N/A Industry Average 1.587% N/A 2004 N/A N/A N/A .35 Growth ratios: 2006 Sales N.09% -9.76% N/A 2005 0.03% -0.4 1.008 0.723 N/A 2005 0.07 3.2 8.053 0.208 29.1 Key Financial Ratios: 2006 ROA ROE EPS Price-Earning -0.02 2 -0.18 0.

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