Why is Ford worth 44% more than GM?
There are many metrics to compare the “value” of Ford versus GM. Yahoo Finance lists them in the Key Statistics area of the stock page for each stock. A quick glance confirms that Ford is “valued” at higher ratios than GM for most of the metrics cited. You have to keep in mind though, that the metrics cited are backward looking and accounting driven. In other words, they are from the last reported accounting period (or whatever period Yahoo uses). GAAP reporting does not always capture a company’s true value. GM may have taken more accounting charges than Ford (especially for their recent deal with their labor unions) that temporarily reduced their GAAP statistics. One metric that I did not compare for both companies was their cash flow, which might present a better picture of how much money they are actually making (without the various accounting charges). Finally, Ford owns 100% of Ford Motor Credit, a finance subsidiary which itself has publicly traded debt.
