Ford Motor Company (F)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.56 | 10.37 | 10.62 | 11.22 | 11.84 |
| Receivables turnover | 2.78 | 2.84 | 2.90 | 3.10 | 2.43 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 10.50 | 8.83 | 8.06 | 7.46 | 6.50 |
The following activity ratios for Ford Motor Company have been calculated based on the provided data:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Ford's inventory turnover has shown a slight decrease from 11.84 in 2020 to 10.37 in 2023, before increasing to 11.56 in 2024. This indicates that Ford is selling its inventory more quickly in 2024 compared to 2023, which is a positive sign of inventory management efficiency.
2. Receivables Turnover:
- The receivables turnover ratio demonstrates how efficiently a company collects on its credit sales. Ford's receivables turnover has fluctuated over the years, from 2.43 in 2020 to 2.78 in 2024. The increase in 2024 suggests that Ford has been more effective in collecting receivables compared to the previous years, reflecting improved credit management practices.
3. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays off its suppliers. The data indicates that Ford has not provided information on payables turnover for the years 2020 to 2024. Without this information, it is not possible to assess how effectively Ford is managing its payables and cash flow.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales. Ford's working capital turnover has shown a consistent increase from 6.50 in 2020 to 10.50 in 2024. This trend suggests that Ford has been able to generate more revenue per dollar of working capital, indicating improved operational efficiency and financial performance.
Overall, based on the activity ratios analyzed, Ford Motor Company has demonstrated strengths in managing its inventory, receivables, and working capital efficiently, contributing to optimization in operational performance and financial viability. However, the lack of information on payables turnover limits a comprehensive assessment of Ford's overall working capital management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 31.57 | 35.18 | 34.36 | 32.54 | 30.83 |
| Days of sales outstanding (DSO) | days | 131.35 | 128.49 | 125.74 | 117.56 | 150.41 |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios for Ford Motor Company show the following trends:
1. Days of Inventory on Hand (DOH):
- The DOH has shown a slight increase over the years, from 30.83 days in December 2020 to 35.18 days in December 2023, before decreasing to 31.57 days by December 2024.
- A higher number of days of inventory on hand may indicate that Ford is taking longer to sell its inventory which could tie up working capital and increase storage costs.
2. Days of Sales Outstanding (DSO):
- The DSO decreased from 150.41 days in December 2020 to 117.56 days in December 2021, but then increased to 131.35 days by December 2024.
- A high DSO may suggest that Ford is taking a longer time to collect its accounts receivable, possibly indicating issues with credit policies or the financial health of customers.
3. Number of Days of Payables:
- The data provided does not include information on the number of days of payables, indicating that this metric is not available for the analysis.
- Monitoring payables turnover can help assess how efficiently Ford is managing its accounts payable and its relationships with suppliers.
Overall, the analysis of Ford Motor Company's activity ratios suggests that there have been some fluctuations in inventory management and receivables turnover over the years. Further exploration of payables turnover would provide a more comprehensive view of Ford's working capital management efficiency.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.41 | 4.32 | 4.24 | 3.67 | 3.43 |
| Total asset turnover | 0.65 | 0.64 | 0.62 | 0.53 | 0.48 |
Ford Motor Company's long-term activity ratios reveal a positive trend in efficiency and asset utilization over the years. The Fixed Asset Turnover ratio has shown a steady increase from 3.43 in 2020 to 4.41 in 2024, indicating that the company generates more sales revenue per dollar of fixed assets invested, reflecting improved operational efficiency and productivity in utilizing its long-term assets.
Similarly, the Total Asset Turnover ratio has also demonstrated a consistent uptrend from 0.48 in 2020 to 0.65 in 2024, highlighting Ford's ability to generate more sales revenue relative to its total assets. This indicates effective management of its asset base, as the company is efficiently utilizing its resources to drive revenue growth.
Overall, the upward trajectory of both the Fixed Asset Turnover and Total Asset Turnover ratios suggests an enhancement in Ford's operational efficiency and asset utilization capabilities over the years, which can contribute positively to the company's overall financial performance and long-term sustainability.