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Conduct Comparative Dupont Analysis Two Companies: Ford GM

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Conduct a comparative DuPont analysis of two companies. Find one large corporation included in the S&P 500. Then, find one of its largest competitors. Go to the investor relations portion of each corporation's homepage and find their most recent annual report. Calculate a complete DuPont analysis calculating the ROE, ROA, the profit margin, total asset turnover and equity multiplier. Critique the differences between the two corporations in approximately 100 words.

Part II
Using the most recent income statements (annual) for the two corporations from Part I of the assignment, calculate a common size analysis using a spreadsheet. Discuss the differences in the two corporations in approximately 75 words. Your answer can be completed below your spreadsheet analysis.

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Solution Summary

Your tutorial is in excel, attached, and includes the balance sheet and income statement for Ford and GM (cut and pasted into Excel), the ratios computed with the numerator and denominator shown for easy comprehension.

Solution Preview

I used Ford and GM. Ford?s 2012 annual report is not released yet so I used their 2011 annual report. GM's 2012 report was already posted so I used it.
www.ford.com
www.gm.com
 
Part I
Ford has outperformed GM in nearly all the measures. Their net income as a percent of sales is larger, meaning that they kept more of each dollar sold. Ford's asset turnover was lower than GM indicating that they generated fewer sales for the assets employed. Ford had ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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