Two-part Finance Question – Calculate and evaluate financial statements

The following is a summary of performance data for the ABC Corporation over a three-year period:

(in millions)	Year 1	Year 2	Year 3
Sales	34,734	39,304	42,680
Cost of Goods Sold	33,550	37,852	40,648
Net Income	1,184	1,452	2,032
Assets	25,654	27,385	29,903
Total Debt	11,695	10,498	13,926
Equity	15,654	15,220	14,727
Operating Cash Flow	1,998	2,378	3,186
Investment Cash Flow	-2,781	-3,419	-4,049
Financing Cash Flow	-692	-287	-244

Based upon the information provided,  calculate the following:

• Profit margin on sales
• Return on assets
• Return on equity
• Total debt to total assets
• Total asset turnover

Explain and evaluate your results as they pertain to profitability, debt, and asset turnover for the company over a three-year period.

 

Part Two: Issues and Interests of Investors and Other Stakeholders; Analysis of Company Performance

Required:

1. Identify two items or issues that cannot be derived from the financial statements of General Motors and Ford. Explain why these items or issues would be of concern to investors and other stakeholders. In your rationale, address the specific interests of the different users of financial statements.
2. Compare and contrast Gneral Motros and Ford in terms of how well or how poorly they are performing in the areas of profit, debt, and asset turnover. Use appropriate ratios in your analysis. Indicate strategies for possible improvement in each area.