Discounted Cash Flow (DCF) Valuation

Capital Asset Pricing Model (CAPM)

CAPM is a theory concentrated with deriving the expected rates of return on risky assets based
on the assets' systematic risk levels. Systematic risk is the variability of returns that is due to
macroeconomic factors that affect all risky assets. It cannot be eliminated by diversification.

Rates of Return
Systematic Risk () Estimation
Expected Rate of Return

Dividend Discount Model (DDM)

The Dividend Discount Model (DDM) is a technique for estimating the value of a share of Ford
Motor Co.'s common stock issue as the present value of all future dividends.

Intrinsic Stock Value (Valuation Summery)

Required Rare of Return (r)
Dividend Growth Rate (g)

Present Value of Free Cash Flow to the Firm (FCFF)

The FCFF valuation approach estimates the value of the firm as the present value of future FCFF
discounted at the weighted average cost of capital (WACC).

Intrinsic Stock Value (Valuation Summery)

Weighted Average Cost of Capital (WACC)
FCFF Growth Rate (g)

Present Value of Free Cash Flow to Equity (FCFE)

The FCFE valuation approach estimates the value of equity as the present value of future FCFE
discounted at the required rate of return on equity.

Intrinsic Stock Value (Valuation Summery)

Required Rare of Return (r)
FCFE Growth Rate (g)

Long-term Trends
Selected Financial Data since 2005
Main items of Ford Motor Co.'s financial statements.

Income Statement
Assets
Liabilities and Stockholders' Equity
Statement of Cash Flows
Per Share Data

Total Asset Turnover since 2005

Ford Motor Co.'s activity ratio calculated as total revenue divided by total assets.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Current Ratio since 2005

Ford Motor Co.'s liquidity ratio calculated as current assets divided by current liabilities.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Debt to Equity since 2005

Ford Motor Co.'s solvency ratio calculated as total debt divided by total shareholders' equity.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Net Profit Margin since 2005

Ford Motor Co.'s indicator of profitability, calculated as net income divided by revenue.

Calculation
Comparison to Competitors

Comparison to Automobiles Sector

Comparison to Consumer Goods Industry

Return on Equity (ROE) since 2005

Ford Motor Co.'s profitability ratio calculated as net income divided by shareholders' equity.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Return on Assets (ROA) since 2005

Ford Motor Co.'s profitability ratio calculated as net income divided by total assets.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Price to Earnings (P/E) since 2005

The P/E ratio tells analyst how much an investor in Ford Motor Co.'s common stock pays per
dollar of current earnings.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Price to Sales (P/S) since 2005

An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally
less subject to distortion or manipulation than other fundamentals such as EPS or book value.
Sales are also more stable than earnings and never negative.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry

Price to Book Value (P/BV) since 2005

The P/BV ratio is interpreted as an indicator of market judgment about the relationship between
a company's required rate of return and its actual rate of return.

Calculation
Comparison to Competitors
Comparison to Automobiles Sector
Comparison to Consumer Goods Industry