Ford Motor Co. (NYSE:F)

The analysis of the financial ratios over the five-year period reveals several notable trends in the company's financial structure and ability to cover obligations.

Leverage Ratios

The debt to equity ratio shows a significant decline from 5.27 in 2020 to 2.85 in 2021, followed by a gradual increase over the subsequent years to 3.54 in 2024. This indicates a reduction in reliance on debt relative to equity during 2021, with a moderate reversal thereafter. When including operating lease liabilities, the pattern follows closely with slightly higher values, reflecting the impact of lease obligations on total debt levels.

The debt to capital ratio also declines from 0.84 in 2020 to 0.74 in 2021, then edges upward to stabilize around 0.78 by 2023 and 2024. This suggests a reduction in debt financing relative to the combined debt and equity base in 2021, with a partial increase but maintaining a relatively stable level thereafter. The inclusion of operating lease liabilities does not materially affect this ratio, indicating lease liabilities are consistently accounted for within total capital.

Debt to assets remains fairly consistent, decreasing slightly from 0.60 in 2020 to 0.54 in 2021 and maintaining levels close to 0.55-0.56 in the following years. The minimal variations after the initial decrease suggest steady management of debt relative to total assets.

Financial leverage, measured as the ratio of average assets to average equity, decreases sharply from 8.71 in 2020 to 5.30 in 2021, then increases gradually to about 6.36 by 2024. The initial decrease may reflect strengthening equity positions or asset reductions relative to equity, followed by moderate growth in leverage thereafter.

Coverage Ratios

The interest coverage ratio exhibits significant volatility across the period. It is extremely low at 0.32 in 2020, indicating poor capacity to cover interest expenses. This improves dramatically to 10.86 in 2021, demonstrating a strong increase in earnings relative to interest costs. However, the ratio turns negative at -1.4 in 2022, signaling operating losses or insufficient earnings relative to interest payments. Recovery occurs in the subsequent years with the ratio rising to 4.05 in 2023 and further to 7.49 in 2024, indicating improving profitability and interest coverage capacity.

Similarly, fixed charge coverage follows the same pattern: very low coverage in 2020 (0.47), strong improvement in 2021 (8.91), a negative coverage in 2022 (-0.75), and gradual recovery to 5.10 by 2024. This ratio’s behavior corroborates the fluctuations in the company’s ability to cover fixed financial obligations, including rent and interest, highlighting the significant operational challenges faced in 2022 and subsequent improvement in later years.

Overall, the data indicates a period of financial stress or operational difficulty around 2022, reflected in negative coverage ratios despite moderate leverage metrics. The situation appears to improve strongly by 2023 and continues into 2024, with coverage ratios indicating enhanced profitability and stable leverage, although debt levels remain relatively elevated compared to equity. The consistent inclusion of operating lease liabilities does not materially change leverage assessments, suggesting lease obligations are a stable component of the company's financial structure.

The financial data reveals several trends in the company's capital structure from 2020 to 2024. Total debt initially decreased significantly from 161,684 million US dollars in 2020 to 138,092 million US dollars in 2021. Following this reduction, total debt experienced a gradual increase over the subsequent years, reaching 158,522 million US dollars by the end of 2024.

Equity attributable to the company showed a different trajectory. After increasing substantially from 30,690 million US dollars in 2020 to 48,519 million US dollars in 2021, equity declined in 2022 to 43,242 million US dollars. It stayed relatively stable in 2023 at 42,773 million US dollars and showed a modest increase again in 2024, reaching 44,835 million US dollars.

The debt to equity ratio exhibited a notable decline from 5.27 in 2020 to 2.85 in 2021, indicating a significant improvement in the relative level of debt compared to equity. However, from 2021 onward, the ratio increased gradually year-over-year, ending at 3.54 in 2024. This upward trend suggests a progressive increase in leverage relative to the equity base after the initial improvement.

Total Debt

Decreased sharply in 2021, then steadily increased through 2024, though it did not return to the 2020 peak.

Equity

Peaked in 2021, followed by a decline through 2023, with a slight recovery occurring in 2024.

Debt to Equity Ratio

Improved markedly from 2020 to 2021, indicating lower leverage; subsequently, the ratio increased gradually, suggesting a steady rise in leverage relative to equity.

Overall, the data indicate an initial deleveraging phase completed in 2021, characterized by both reduced total debt and increased equity. Following this phase, a period of rising leverage is observed, as total debt increased relative to the more modest changes in equity, reflected in the upward trend of the debt to equity ratio through 2024.

Total Debt (including operating lease liability)

The total debt showed a decreasing trend from 162,998 million USD at the end of 2020 to 139,485 million USD in 2021, indicating an improvement in leverage or debt reduction strategies during that period. However, from 2021 onwards, the total debt steadily increased to 140,474 million USD in 2022, 151,107 million USD in 2023, and further to 160,862 million USD by the end of 2024, suggesting a renewed reliance on debt financing or increased liabilities in recent years.

Equity Attributable to Ford Motor Company

Equity exhibited notable volatility over the analyzed period. It surged significantly from 30,690 million USD in 2020 to 48,519 million USD in 2021, reflecting strong capital accumulation or profitability. Subsequently, equity declined to 43,242 million USD in 2022 and remained relatively stable around 42,773 million USD in 2023 before a slight recovery to 44,835 million USD in 2024. This pattern suggests fluctuations in retained earnings, capital restructuring, or market valuation impacts.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio experienced a substantial decline from 5.31 in 2020 to 2.87 in 2021, signifying a considerable reduction in leverage relative to equity during that year, likely driven by equity growth and debt reduction. However, post-2021, the ratio gradually increased each year to 3.25 in 2022, 3.53 in 2023, and 3.59 in 2024, indicating a rising leverage position relative to shareholders' equity. Despite this increase, the ratio remained well below the peak level of 2020, implying an overall improvement in capital structure compared to that baseline.

Summary

The financial data reveals an initial deleveraging phase in 2021 marked by decreasing debt and substantial equity growth, leading to a lower debt-to-equity ratio. This favorable shift was partly reversed in subsequent years as total debt rose and equity declined slightly, causing a moderate increase in leverage ratios. Nevertheless, the leveraged position by 2024 remains healthier compared to 2020 levels. These trends indicate cycles of capital management that balance debt repayment and equity fluctuations, reflecting dynamic financial strategy responses to business or market conditions over the period analyzed.

Total Debt

The total debt experienced a decline from 161,684 million USD in 2020 to 138,092 million USD in 2021. This reduction was followed by a slight increase to 138,969 million USD in 2022, and a further rise to 149,231 million USD in 2023, continuing with an upward trajectory to 158,522 million USD in 2024. Overall, after an initial decrease, the total debt shows a consistent growth trend during the last three years observed.

Total Capital

Total capital declined from 192,374 million USD in 2020 to 186,611 million USD in 2021, and then decreased further to 182,211 million USD in 2022. However, the capital base recovered significantly in 2023, reaching 192,004 million USD, and continued to increase to 203,357 million USD in 2024. This indicates a recovery and expansion in total capital after a period of contraction.

Debt to Capital Ratio

The debt to capital ratio decreased from 0.84 in 2020 to 0.74 in 2021, reflecting a reduction in leverage relative to capital. This was followed by a slight increase to 0.76 in 2022 and a continued gradual rise to 0.78 in both 2023 and 2024. The ratio indicates that leverage stabilized at a moderately high level after the initial reduction in 2021.

Summary

The data reveals that the company initially reduced its debt and overall capital between 2020 and 2021. Thereafter, while total capital experienced a recovery and growth phase from 2022 onwards, total debt resumed an upward trend following its initial decline. As a consequence, the debt to capital ratio dropped significantly in 2021 but has risen moderately since then, stabilizing near 0.78 by 2024. This suggests a cautious approach to leverage, balancing increased debt with growth in capital.

The analysis of the annual financial data over the five-year period reveals several notable trends and patterns in the company's capital structure.

Total Debt (including operating lease liability)

The total debt decreased significantly from 162,998 million US dollars in 2020 to 139,485 million US dollars in 2021, indicating an early reduction in leverage. However, this was followed by a slight increase to 140,474 million US dollars in 2022. The debt level then rose more noticeably in 2023 and 2024 to 151,107 million and 160,862 million US dollars, respectively. Overall, after an initial reduction in 2021, total debt gradually increased and nearly returned to the 2020 level by 2024.

Total Capital (including operating lease liability)

Total capital exhibited a declining trend from 193,688 million US dollars in 2020 to 183,716 million US dollars in 2022. This downward movement reversed in 2023 and 2024, with capital increasing to 193,880 million and 205,697 million US dollars, respectively. The recovery and growth phases in the last two years somewhat offset the earlier declines, leading to a higher total capital level in 2024 compared to 2020.

Debt to Capital Ratio (including operating lease liability)

The ratio decreased from a high of 0.84 in 2020 to 0.74 in 2021, reflecting the reduction in debt relative to capital. However, in the subsequent years, the ratio steadily increased to 0.76 in 2022, then to 0.78 in both 2023 and 2024, indicating a gradual rise in leverage as debt grew faster than capital. Despite the increase, the ratio in 2024 remains below the 2020 peak.

In summary, the data depicts an initial effort to deleverage the balance sheet in 2021, followed by a period of rising debt levels through 2024. This trend is coupled with a rebound in total capital starting in 2023. The debt to capital ratio aligns with these developments, showing a reduction in leverage early on before gradually increasing but stabilizing below the initial high level. These patterns suggest the company managed to reduce financial risk in the short term, but leveraged more heavily in recent years while simultaneously rebuilding its capital base.

Total Debt

The total debt exhibited a declining trend from 161,684 million USD at the end of 2020 to 138,092 million USD at the end of 2021. This reduced level of debt remained relatively stable through 2022. However, it increased again to 149,231 million USD in 2023, followed by a further rise to 158,522 million USD in 2024. Overall, the total debt decreased initially but then showed a gradual upward movement over the last two years.

Total Assets

Total assets decreased from 267,261 million USD in 2020 to 257,035 million USD in 2021, and experienced a slight further decline to 255,884 million USD in 2022. Subsequently, total assets increased to 273,310 million USD in 2023 and continued this positive trend to reach 285,196 million USD in 2024. This indicates a recovery and growth in asset base over the final two years following a period of contraction.

Debt to Assets Ratio

The debt to assets ratio dropped from 0.60 in 2020 to 0.54 in both 2021 and 2022, suggesting an improvement in the leverage position during this timeframe. However, the ratio subsequently rose to 0.55 in 2023 and 0.56 in 2024, indicating a modest increase in leverage relative to total assets. Despite this slight increase, the ratio remains below the 2020 level, reflecting an overall reduction in indebtedness relative to asset size compared to the beginning of the period.

Summary

The financial data reveals an initial reduction in both total debt and total assets during the 2020-2022 period, with a notably improved leverage ratio. The period from 2023 onwards demonstrated growth in total assets alongside a rise in total debt, leading to a marginal increase in the debt to assets ratio. The overall leverage remains more conservative compared to the starting point in 2020, indicating improved financial stability despite the recent uptick in obligations.

Total debt (including operating lease liability)

The total debt shows a decreasing trend from 2020 to 2021, dropping from 162,998 million US dollars to 139,485 million US dollars. In 2022, the debt slightly increased to 140,474 million US dollars and then continued to rise more significantly in 2023 and 2024, reaching 151,107 million and 160,862 million US dollars respectively. Overall, the debt levels indicate a cycle of reduction followed by a steady increase toward the end of the observed period.

Total assets

Total assets decreased moderately from 267,261 million US dollars in 2020 to 257,035 million in 2021 and further slightly to 255,884 million in 2022. However, the asset base experienced growth in 2023 and 2024, increasing to 273,310 million and 285,196 million US dollars respectively. This suggests a recovery and expansion phase in asset accumulation after two years of decline.

Debt to assets (including operating lease liability)

The debt-to-assets ratio followed a notable downward trend from 0.61 in 2020 to 0.54 in 2021, reflecting an improvement in leverage by reducing the relative debt burden against total assets. The ratio stabilized around 0.55 in 2022 and 2023 and slightly edged up to 0.56 in 2024, indicating a modest increase in leverage in the latest period but overall maintenance of a more balanced debt level relative to assets compared to the starting point.

Summary

Between 2020 and 2024, the debt and asset figures collectively reveal initial deleveraging followed by a gradual rise in both debt and assets. The initial reduction in debt and assets suggests a period of consolidation or adjustment, while the subsequent increases reflect renewed investment or financing activity. Despite the rising debt in later years, the debt-to-assets ratio remains below the 2020 level, indicating that growth in assets has partly offset the increase in debt, maintaining a relatively stable capital structure. This pattern may reflect a strategic approach to managing leverage while pursuing expansion or operational scaling during the period analyzed.

Total assets

The total assets have demonstrated a fluctuating but generally increasing trend over the analyzed period. Starting at 267,261 million USD in 2020, assets slightly declined to 255,884 million USD by the end of 2022. However, there was a recovery and growth in the subsequent years, reaching 285,196 million USD by the end of 2024. This suggests a renewed asset acquisition or appreciation after a short-term contraction.

Equity attributable to Ford Motor Company

Equity attributable to the company initially increased significantly from 30,690 million USD in 2020 to 48,519 million USD in 2021, indicating a strong improvement in net assets or retained earnings. Subsequently, equity decreased in 2022 and 2023 to approximately 43,242 million USD and 42,773 million USD, respectively. In 2024, equity rose slightly to 44,835 million USD. This pattern reflects volatility in retained earnings or other comprehensive income components, possibly influenced by operational results or market conditions.

Financial leverage

Financial leverage declined sharply from a high of 8.71 in 2020 to 5.3 in 2021, indicating a reduction in total liabilities relative to equity or a strengthening equity base. However, leverage increased moderately to 6.36 by 2024 after a gradual rise from 2021, suggesting the company assumed more debt or liabilities relative to equity during this period. Despite this uptick, leverage levels remain significantly lower than in 2020, implying an overall more conservative capital structure compared to the start of the period.

Summary of trends

Overall, there is evidence of asset growth after a brief decline, accompanied by fluctuating equity values and a significant initial reduction in financial leverage followed by a moderate increase. These dynamics may indicate strategic shifts in capital structure management, asset allocation, and possibly responses to external economic factors during the observed years. The company appears to have strengthened its equity position substantially in the early years before experiencing some volatility, while maintaining a lower financial leverage ratio than at the outset.

Earnings before interest and tax (EBIT)

The EBIT demonstrates significant volatility over the five-year span. Beginning with a modest positive value in 2020, there is a remarkable surge in 2021 to a peak of 19,583 million US dollars. This is followed by a sharp decline in 2022, where EBIT turns negative at -1,757 million US dollars, indicating a loss before interest and tax for that year. Subsequently, EBIT recovers in 2023 and 2024, rising to 5,269 million and then to 8,348 million US dollars, respectively. Although the values for these two years do not reach the peak of 2021, the upward trend signals a return to profitability and operational improvement.

Interest expense on Company debt excluding Ford Credit

The interest expense shows a general downward trend after an initial increase. Starting at 1,649 million US dollars in 2020, it slightly rises to 1,803 million in 2021, then steadily decreases through the subsequent years to 1,259 million in 2022, 1,302 million in 2023, and further down to 1,115 million US dollars in 2024. This suggests the company has been managing to reduce its interest burden, potentially through debt repayment, refinancing at lower rates, or a reduction in overall debt levels.

Interest coverage

The interest coverage ratio exhibits substantial fluctuations, reflecting changes in operational profitability relative to interest expenses. The ratio begins at a low level of 0.32 in 2020, indicating insufficient EBIT to cover interest expenses comfortably. It dramatically improves to 10.86 in 2021, consistent with the high EBIT observed. However, the ratio turns negative at -1.4 in 2022 due to negative EBIT, highlighting an inability to cover interest costs. Recovery is evident in 2023 and 2024, with the ratio rising to 4.05 and then 7.49, respectively, indicating an improved capacity to meet interest obligations and signaling a strengthening financial position.

Earnings before fixed charges and tax

This metric exhibited significant volatility over the observed periods. Starting at 996 million US dollars at the end of 2020, it surged dramatically to 20,027 million in 2021, indicating a substantial improvement in operational profitability before fixed costs. However, this was followed by a sharp decline into negative territory at -1,294 million in 2022, highlighting a period of operational losses or extraordinary expenses. The figure then recovered in 2023 and 2024, reaching 5,849 million and 8,998 million respectively, suggesting a stabilizing and improving operating performance but still below the peak observed in 2021.

Fixed charges

Fixed charges showed a moderate but consistent decrease across the years. Beginning at 2,112 million US dollars in 2020, these charges slightly increased to 2,247 million in 2021 but then declined over the subsequent years to 1,722 million in 2022, 1,882 million in 2023, and further down to 1,765 million in 2024. The overall trend reflects some cost management or refinancing efforts possibly aimed at reducing fixed financial obligations.

Fixed charge coverage ratio

The fixed charge coverage ratio displayed a highly variable trend, closely reflecting the changes in earnings before fixed charges and tax relative to fixed charges. It was extremely low at 0.47 in 2020, then improved sharply to 8.91 in 2021, indicating strong coverage and the ability to meet fixed charges multiple times over from earnings. In 2022, the ratio became negative (-0.75), signifying that earnings were insufficient to cover fixed charges, consistent with the negative earnings before fixed charges and tax. The ratio improved again in 2023 to 3.11 and further in 2024 to 5.1, indicating a considerable recovery in the ability to cover fixed charges, though not reaching the exceptional 2021 level.

Overall analysis

The data reflects a company experiencing significant fluctuations in operating earnings relative to its fixed financial obligations over the five-year span. The peak performance in 2021 was followed by a challenging year in 2022 marked by losses and insufficient earnings to cover fixed charges. Subsequent years indicate a recovery trend with improving earnings and coverage ratios, alongside a gradual reduction in fixed charges. The trends suggest operational and financial resilience with ongoing efforts to stabilize earnings and manage fixed costs effectively.