Inventory Turnover In Ford Motor Company

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Inventory Turnover is a measure of how quickly the company is selling their goods (Investopedia). The inventory turnover is a measure of the sales of a company divided by the company 's inventory for a specified period. Ford Motor Company had sales of 144,077,000,000 and inventory of 7,866,000,000 giving an inventory turnover of 144,077,000,000/7,866,000,000=18.31 (Ford Motor Company, 2015, pp. 27, FS-4). This shows that Ford Motor Company had a high volume of sales in 2014. Similarly, General Motors Company had sales of 155,929,000,000 and inventory of 13,642,000,000 giving an inventory turnover of 155,929,000,000/13,642,000,000=11.43 (General Motors Company, 2015, pp. 28, 68). General Motors ' inventory turnover is lower than Ford Motor 's but is still pretty good compared to other automotive companies. Profit margin is another important ratio in the world of accounting that looks at the company 's profitability for the given timeframe (Investopedia). Net profit margin is found by dividing net sales by net revenue. Ford Motor Company 's net income for 2014 was 3,187,000,000 and the net revenue was 144,077,000,000 (Ford Motor Company, 2015, p. 27). Therefore, Ford 's profit margin was 3,187,000,000/144,077,000,000=2.21%. General Motors Company 's net income was 4,018,000,000 and their net revenue was 155,929,000,000 (General Motors Company, 2015, pp. 66, 69). This gave General Motors a net profit margin of 4,018,000,000/155,929,000,000=2.58%. Both companies had similar

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