Ford Motor Company (F) receives Old York Operational Quality (B) Rating for fiscal year 2025

Mar 1

(B) | Consumer Discretionary | Automobile Manufacturers
By: Old York Financial
A Private Principal Research Report

the verdict

Old York Financial has assigned Ford Motor Company (F) an Operational Quality (B) Rating. Ford is currently a "Demolition Site" being cleared for a new foundation. In 2025, the company reported record revenue of $187.3 Billion, yet suffered a $8.2 Billion net loss due to a massive $19.5 Billion "EV U-Turn" charge. It earns a (B) because of this extreme bottom-line volatility and a -22.7% ROE. However, the "Ford Pro" commercial segment is a crown jewel, generating $6.8 Billion in EBIT at a 10.3% margin. For the Principal, Ford is a Tale of Two Companies: a world-class commercial fleet business (AA) chained to a hemorrhaging electric car experiment (CCC).

the old york analysis

owner earnings: the commercial cash pump We look past the $19.5B accounting write-down to see if the machine still generates "cold hard cash." Surprisingly, the industrial heart is still beating.

2025 Operating Cash Flow: $21.30 Billion
(-) Capital Expenditures: ($9.00 Billion)
(+) Depreciation & Amortization: $7.83 Billion
OLD YORK OWNER EARNINGS: $20.13 Billion

Analyst Note: Despite the massive GAAP loss, Ford generated $3.5 Billion in Adjusted Free Cash Flow. The "Owner Earnings" of $20B+ show that the core manufacturing process is still lucrative, but it is being aggressively drained by the $4.8 Billion EBIT loss in the "Model e" (EV) segment. Ford is essentially using its truck profits to pay for its electric education.

operational efficiency

ROIC (Return on Invested Capital): 10.1% (Adjusted)
ROE (Return on Equity): -22.7%
(GAAP) Net Profit Margin: -4.3%
Ford Pro Margin: 10.3% (The Profit Pillar).
Ford Blue (Gas/Hybrid) Margin: 3.0% (Squeezed by "Novelis" fire disruptions and tariffs).
Ford Model e Margin: -71.6% (The "Clogged Pipe").
Analyst Note (The Efficiency Paradox): While the GAAP ROE is a disaster, the Adjusted ROIC of 10.1% shows that when you strip away the one-time strategic "trash," the capital is still working. The goal is an 8% company-wide adjusted EBIT margin by 2029; they are currently at 3.6%.

growth & market dominance

2025 Consolidated Revenue: $187.3 Billion (+2% YoY).
The Hybrid Pivot: Hybrid sales grew significantly, with F-150 and Maverick leading the U.S. market.
Commercial Dominance: Ford Pro owns 42% of the U.S. Class 1-7 market larger than its next two competitors combined.
Software Subscriptions: Paid subscriptions grew 30%, with software margins exceeding 50%. This is the "Digital Oil" the Principal is waiting for.

the fortress check

Total Assets: $289.1 Billion.
Cash & Liquidity: $29.0 Billion Cash / $50.0 Billion Total Liquidity.
Total Debt: $106.0 Billion (Majority is Ford Credit debt).
Shareholder Equity: $35.9 Billion.
Capital Allocation: Maintained a $0.15/quarter dividend. Unlike GM, Ford is prioritizing the dividend yield (currently ~5-6%) over aggressive buybacks to keep the Principal patient during the "Renovation."

final determination

Rating: Old York Operational Quality (B)

Classification: The Industrial Renovation.

Ford is a (B) because its "Model e" segment is a massive anchor on an otherwise elite commercial business. The -22.7% ROE is a "Red Flare" that cannot be ignored, even if it's caused by a one-time strategic pivot. It stays at (B) until the Model e losses shrink below $3 Billion and Ford Blue restores its 5%+ margin.

Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.

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