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You'll Be Surprised at the Size of Ford Motor Company's War Chest

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" $27.5 billion. I'll say that again: Twenty-seven point five billion dollars. That's the cash Ford Motor Company had stashed as of December 31. That's not all: On top of that huge hoard, Ford had another $10.8 billion in available-but-unused credit lines as of the same date, for a "total liquidity" of $38.3 billion.

To be clear, that's not some fluke number related to Ford's in-house bank, Ford Credit. That's cash, cash equivalents, and marketable securities available to its core auto-making business. It's a real cash pile, and it's just sitting there.

Why doesn't Ford spend it on new products, or a big share buyback, or fatter dividend payments? Why aren't Ford's shareholders screaming about that idle pile of cash? 

It turns out there's a very good business reason for Ford to have a giant war chest. Read on "

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This is nice to see, they need it to deal with their debt to equity ratio that stands at 4.901.

https://ycharts.com/companies/F/debt_equity_ratio

As you can see here, they cannot really afford to spend when you have almost 209 Billion in Debt. Yes assets of 239 Billion but that still makes this very tight.

https://ycharts.com/companies/F

I wish Ford had gone the route of bankruptcy to unload old legacy debt that is really hurting them.

 

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