The Balance Sheet

Balance Sheet Analysis:

From a financial balance sheet analysis, Ford would fail as a healthy investment. Graham/Dodd would probably not have taken a second look at this company. Its debt/equity is poor; it reported negative income since 2006 (it was last profitable in the year ending December 31, 2005); the automobile industry is assumed by all to be virtually non-existent.

To coin a phrase that supported the March-June 2009 40% global stock market rally, Ford is doing "less worse" than what the market thought. In fact, it is doing better than its competitors.

GM and Chrysler, as it emerges from bankruptcy, will be distracted from making bold and key decisions. Investors who have written off Ford also believe that these bankrupt companies will undercut product pricing. People thought this too, before the bankruptcy. The thing is, it never really happened. At that point, the fate of the other "big two" was sealed. Now, GM and Chrysler have too many owners and it is under government intervention and supervision.