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Ford Motor Company Essay

1279 words - 6 pages

Ford Motor Company |
Spring 2013 Final Project
|
By Drake Dukes, Sarah Miller, Josh McKeon, Mackenzie Sowers, and Danny Lee |

5/9/2013
|

Introduction
Ford Motor Company aka “Ford” is an American multinational automaker headquartered in a suburb of Detroit, Michigan founded by Henry Ford and incorporated in 1903, 109 years ago. Ford introduced methods for large-scale manufacturing of cars through the use of the world famous assembly lines. Ford Motor Company engages in the development, manufacture, distribution, and service of vehicles, parts, and accessories worldwide. Ford markets cars, trucks, parts, and accessories through retail dealers in South America, Europe, Turkey, ...view middle of the document...

Ford’s “One Plan” includes aggressively restructure to operate profitability at current demand and changing model mix, accelerate development of new products our customers want and value, finance our plan and improve our balance sheet, as well as, work together effectively as a team. Lastly, Ford’s “One Goal” is an exciting viable Ford delivering profitable growth for all (Ford Corporate).

*data from finance.yahoo.com
Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time in order to determine whether the increase or decrease has taken place. An amount and percent of change from Ford’s balance sheet can be viewed above. If we assume 2011 as the base year, the percentage increases or decreases comes from (current year amount-base year amount) / base year amount. (Weygandt, Kimmel, Kieso 713). As shown above, Ford Motor Company had an increase in assets, liabilities, and stockholder’s equity from the 2011 to the 2012 fiscal year. Vertical analysis is a technique that expresses each financial statement item as a percentage of a base amount. In the balance sheet, the base for asset items is total assets. (Weygandt, Kimmel, Kieso 716). For example, above Ford’s current assets are 65.94% of their total assets.
FORD MOTOR COMPANY AND SUBSIDIARIES
SECTOR INCOME STATEMENT
(in millions)
|
| | | | | | | | | | | |
| For the years ended December 31, |
| 2012 | | 2011 | | 2010 |
AUTOMOTIVE | | | | | |
Revenues | $ | 126,567 | | | $ | 128,168 | | | $ | 119,280 | |
Costs and expenses | | | | | |
Cost of sales | 112,578 | | | 113,345 | | | 104,451 | |
Selling, administrative, and other expenses | 9,006 | | | 9,060 | | | 9,040 | |
Total costs and expenses | 121,584 | | | 122,405 | | | 113,491 | |
| | | | | |
Interest expense | 713 | | | 817 | | | 1,807 | |
| | | | | |
Interest income and other income/(loss), net (Note 21) | 1,185 | | | 825 | | | (362 | ) |
Equity in net income/(loss) of affiliated companies | 555 | | | 479 | | | 526 | |
Income before income taxes — Automotive | 6,010 | | | 6,250 | | | 4,146 | |
| | | | | |
FINANCIAL SERVICES | | | | | | | |
Revenues | 7,685 | | | 8,096 | | | 9,674 | |
Costs and expenses | | | | | |
Interest expense | 3,115 | | | 3,614 | | | 4,345 | |
Depreciation | 2,524 | | | 1,843 | | | 2,024 | |
Operating and other expenses | 652 | | | 675 | | | 845 | |
Provision for credit and insurance losses | 86 | | | (33 | ) | | (216 | ) |
Total costs and expenses | 6,377 | | | 6,099 | | | 6,998 | |
| | | | | |
Other income/(loss), net (Note 21) | 369 | | | 413 | | | 315 | |
Equity in net income/(loss) of affiliated companies | 33 | | | 21 | | | 12 | |
Income before income taxes — Financial...

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