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Federal Bailout

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Ford Motor Company and General Motors are two of the big three automobile companies in the United States. Henry Ford started the Ford Motor Company in 1903. General Motors was established when William Durant incorporated Buick Motor Company in 1908. Durant’s vision was to acquire the most reliable and largest automobile companies to create one massive company. Therefore, General Motors was formed out of numerous automotive companies. This would hopefully drive out the smaller automobile companies. Keep in mind that Ford Motor Company did not utilize the Federal Bailout that they were determined the industry needed to receive; however, General Motors did partake in the Federal Bailout. Here we will compare the two automotive companies …show more content…

An interesting fact, Durant thought cars were smelly, noisy, and dangerous but was intrigued by an idea Benjamin Briscoe had to build one gigantic automotive company. So knowing this, Durant owned Buick Motor Company and in 1908, he decided to incorporate it into General Motors. General Motors are on six continents and in 140 countries with ten major automobile brands. Technological advancements allow for different engine styles, digital entertainment, OnStar, and electric self-starters (Reference, 2016). Below is the financial analysis and comparison between Ford Motor Company and General …show more content…

Here we will focus on the days’ sales in receivables, days’ sales in inventory, and total asset turnover to contribute to our understanding of the company’s health. Days’ sales in receivables is the length of time it takes the company to pay for an item in this case General Motors sells their automobiles almost three times Ford Motor Company. Next, days’ sales in inventory show that the Ford Motor Company keeps an automobile in inventory about twenty days prior to selling it whereas General Motors maintains the vehicle longer. Finally, the total asset turnover provides how efficient a company uses its assets to generate sales. This is calculated by dividing the sales by the total assets. The higher the turnover ratio the better sales are an in this case General Motors’ maintains a higher turnover rate than Ford Motor

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