Comparison of Chrysler and Ford

December 31, 1996 marked the end of a very successful year for Chrysler Corporation.

The company's continued to manage its growth effectively. The company's return on equity was an astounding 31.1%. This was significantly improved over the 18.7% in 1995, and considerably higher than the industry average. The company had earnings of $3.529 billion in 1996. This represented an increase of 75.9% from the $2.025 billion in 1995. The earnings were just short of the 1994 total of $3.713 billion. The earnings per share were $4.74 on a fully diluted basis, up from $2.56 the previous year. The company's stock was trading at $33.00 per share with a P/E multiple of 6.57. Dividends were paid out at a rate of $1.40 per share, up from $1.00 in 1995. This was the seventh dividend increase in the last three years. Net sales reached a record high of $61,397 billion. Worldwide 2.9 million vehicles were shipped, generating nearly 2.7 million in unit sales. Chrysler's combined market share in the U.S. and Canada increased to 16.1% from 14.7%.

Chrysler's operations were very profitable in 1996, nearly doubling the profits from 1995. Net earnings as a percent of revenues improved to 5.7%, up from 3.8% in 1995. The increase in operating performance occurred as the company was able to control costs in the face of a some strong growth in sales. Total revenues increased by 15.4%, with strong growth coming from both

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better position to be able to pay the interest charges on its debt. The times interest earned ratio improved from 4.47 to 7.05. The company used slightly more equity to fund its recent growth. The ratio of average assets to average stockholders' equity increased to 4.88 from 4.77. The percentage of long term debt to total assets went down to 12.8% from 18.3%. The debt to equity ratio also improved from 90.0% to 62.1%. Ford Motor Company The company's net income in 1996 was $4,446 million, or $3.64 per share fully diluted. This was an increase from the earnings in 1995, which were $4,139 million and $3.33 per share. The increase in earnings is the result of increases in total sales by 7% or $9.9 billion, up from sales of $136.9 billion in 1995. Unit sales were up 47,000 on a total volume of 6.6 million. The increase in earnings of $307 million from 1995 was the result of improved automotive results in North America, record earnings in Financial Services and one-time actions including the sale of 67 million shares of The Associates common stock and the sale of the assets of USL Capital. The earning results were offset partially by higher operating losses in South America and Europe and one time charges for employee sep

Category: Business - C