Essay about Financial Evaluation in the Case of Kia Motor Company and Microsoft Corporation

Financial analysis in the matter of Ford Motor Co and Microsoft Corporation

Each business must make financial statements to provide a thorough picture about its past performance and situation to get the owners, the managers, the state and other stakeholders as well. In the case of enormous, international community limited businesses like Kia and Microsoft these statements and data are public, thus anybody can reach them throughout the internet. In addition, we can likewise compute a whole lot of financial percentages based on these types of data. If we like to acquire an authentic frame about the firms, we must know what these kinds of statement and ratios imply. In addition , really difficult intended for the companies that they want to offer other picture about their economical status to the owners and shareholders and an other to the state, particularly in the previous case the firm is interested in displaying high revenue to retain the older and win modern investors, while in the last mentioned case it wants to offer a worse photo in order to pay as little taxes as possible. Listed below, we examine the above mentioned two companies (Ford and Microsoft) for leverage, profitability and growth goal with some ratios. Ford Motor Co: Even as can see inside the income declaration, the total net income was rising and falling yearly, till 2008 it was negative that means Ford's expenses exceeded its revenues. Over the past four years, this quantity was the least, in amount -14, 672. 00 , 000, 000 $ in 2008, thank to the monetary crises. And so the in 2009 reached, in number 2, 717. 00 million dollar net income costs a good result. As the overall net income was negative or relative low, the proportions of earnings like ROE, ROA or ROIC, which give that how much percentage shares the internet income with the equity, the assets or the capital. We all can't declare it's good if these kinds of indicators are high, namely in 2006 ROE was a lot more than 300%, in 2008 much more than 80 %by Ford, since both the net income and the collateral were adverse, so in this case this high ratio intended problems, not success. In 2007 and 2009 this ratio was positive, for the reason that sign with the net income as well as the equity differed (plus and minus). Last year, the net income covered the 30 percentage of the debt of the stockholders equity, which usually cannot be said too high. ROA and ROIC were also negative from 06\ to 08 because of the bad income, however in 2009 the internet income turned out at more than 1% of the total assets and 2% of the capitalization. Until last year it didn't worth to buy Ford shares, particularly the earnings every shares (EPS ratios) were also negative, therefore it was in fact loss. This past year, this amount was 0, 91$ per shares. We are able to state that Ford's profitability is pretty low; their total net income is very low compared to their equity, property or increased. However , the firm develop a loss for many years and also the publication value remained also negative, its their market value exceeded might stayed over 5 mil $ at all times. This quantity was the least two years back, when the financial crisis hit the automotive industry. The quantity of shares improved yearly, generally last year, but their worth didn't, even in 2008 the current market price of your Ford talk about was 2, 29$. After the crises, the prices was having higher, last season a stocks and shares cost 10$. As the historical prices, the market value fluctuated also, namely the amount of shares improved slowly, hence the market capitalization was affected by the selling price of the shares. In 2009, Ford's market capitalization was slightly less than 30000 million bucks, which is almost 400% with the book value. This amount in certainly not too amazing, namely the marketplace value contain a lot of factors, which cannot be quantified like the reputation of the business, the expertise of employees and managers, the interpersonal values from the firm. We could realize that Kia reached a quite high market value through the shareholders after an enough strong fluctuation, vacillation. Nowadays, Kia ranked 4th among the market leaders in industry capitalization in the automobile industry beyond Toyota,...