If a firm takes steps that increase its expected future ROE, does this
mean that shareholder wealth will also increase? Explain.
What are some qualitative factors analysts should consider when
evaluating a company’s likely future financial performance?
. What has happened to Ford’s liquidity position over the past 3 years? How does
Ford’s liquidity compare with its peers? (Hint: You may use both the peer key financial
ratios and liquidity comparison to answer this question.)
2. Take a look at Ford’s inventory turnover ratio. How does this ratio compare with its
peers? Have there been any interesting changes over time in this measure? Do you
consider Ford’s inventory management to be a strength or a weakness?
3. Construct a simple Du Pont analysis for Ford and its peers. What are Ford’s strengths
and weaknesses relative to its competitors?
