Gm Financial Ratios
From the information above it shows that the current of ratio of Ford is 120 percent while the current ratio of GM is 89 percent. The current ratio measures the company’s ability to pay short term and long term obligations. As Ford has the higher current ratio over GM, it depicts that Ford is more capable of paying its obligations to the creditors.
The quick ratio of Ford is 110 percent while GM has 73 percent. Quick ratio is an indicator of company’s short-term liquidity. As Ford has the higher quick ratio over GM, it shows that Ford has more abilities to meet its short term obligations with its liquid assets.
The cash ratio of Ford is 43 percent while GM has 29 percent. The cash ratio only includes the most liquid short-term assets of the company. This ratio did not include the inventory and receivables in the assets as there are no assurance …show more content…
The gross margin represents the percent of total sales revenue remains after incurring the direct costs associated with producing the goods and services the company sells. In this ratio, it shows that GM has more remaining sales revenue to meet its other costs and debt obligations.
The operating and profit margin of Ford both has 3 percent while GM both has 6 percent. Operating margin represents the revenue left after paying the operating expenses while profit margin represents the percentage of net income remains after subtracting all of the company’s expenses. As GM has the higher operating margin and profit margin, it shows that GM has more revenue than Ford both at before and after subtracting the expenses of the company.
From the analysis above, it shows that the two companies have different strengths. Ford has the higher liquidity ratio while GM has the higher profitability ratio. Well for me, both the two companies have credibility throughout the years. But the main purpose for investing is to earn. That’s why, I think GM is better investment
The quick ratio of Ford is 110 percent while GM has 73 percent. Quick ratio is an indicator of company’s short-term liquidity. As Ford has the higher quick ratio over GM, it shows that Ford has more abilities to meet its short term obligations with its liquid assets.
The cash ratio of Ford is 43 percent while GM has 29 percent. The cash ratio only includes the most liquid short-term assets of the company. This ratio did not include the inventory and receivables in the assets as there are no assurance …show more content…
The gross margin represents the percent of total sales revenue remains after incurring the direct costs associated with producing the goods and services the company sells. In this ratio, it shows that GM has more remaining sales revenue to meet its other costs and debt obligations.
The operating and profit margin of Ford both has 3 percent while GM both has 6 percent. Operating margin represents the revenue left after paying the operating expenses while profit margin represents the percentage of net income remains after subtracting all of the company’s expenses. As GM has the higher operating margin and profit margin, it shows that GM has more revenue than Ford both at before and after subtracting the expenses of the company.
From the analysis above, it shows that the two companies have different strengths. Ford has the higher liquidity ratio while GM has the higher profitability ratio. Well for me, both the two companies have credibility throughout the years. But the main purpose for investing is to earn. That’s why, I think GM is better investment