Ford Motor Company (F)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 |
| Financial leverage ratio | 6.36 | 6.39 | 5.92 | 5.30 | 8.71 |
The solvency ratios of Ford Motor Company indicate a strong financial position with consistently low debt levels relative to its assets, capital, and equity over the past five years. The Debt-to-assets ratio has remained at 0.00, suggesting that the company's total debt is negligible compared to its total assets during this period. Similarly, both the Debt-to-capital ratio and Debt-to-equity ratio have also been consistently low at 0.00, indicating that the company has minimal debt in proportion to its capital and equity.
Furthermore, the Financial leverage ratio, which provides insight into the company's financial risk and its ability to meet its debt obligations, has shown a decreasing trend from 8.71 in 2020 to 6.36 in 2024. This decreasing trend suggests that the company has been reducing its reliance on debt financing over the years, leading to a more balanced capital structure and lower financial risk.
Overall, Ford Motor Company's solvency ratios reflect a solid financial position with low debt levels, minimal financial leverage, and a conservative capital structure, indicating its ability to comfortably meet its financial obligations and sustain its operations in the long term.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | 1.52 | 1.37 | 0.98 | -0.87 |
Interest coverage ratio indicates a company's ability to meet its interest obligations on outstanding debt. In the case of Ford Motor Company, the interest coverage ratios over the past few years have shown a mixed trend.
As of December 31, 2020, the interest coverage ratio was negative at -0.87, which suggests that Ford's operating income was not sufficient to cover its interest expenses during that period. This raises concerns about the company's ability to meet its debt obligations solely from operating earnings.
Over the following years, there was an improvement in the interest coverage ratio. By December 31, 2021, the ratio had increased to 0.98, which is still below 1 indicating that Ford's operating income was just able to cover its interest expenses but with little margin for financial stability.
Subsequently, the interest coverage ratios for December 31, 2022 and December 31, 2023 improved further to 1.37 and 1.52, respectively. These ratios indicate that Ford's operating income was more comfortably covering its interest expenses during these years.
However, it's important to note that the data for December 31, 2024 is not available ("—"), which hinders the ability to assess Ford's recent interest coverage performance. In conclusion, while the trend shows an improvement in Ford's ability to cover interest expenses over the years, the negative ratio in 2020 and the absence of data for 2024 are important factors to consider in evaluating the company's financial health and ability to service its debt.