Company Analysis: Ford Motors
1 Name of Company:
2 State of Incorporation:
3 Stock Symbol: ‘F’
4 What is the company’s main product?
5 What is the URL for company’s website? What does it contain?
http://www.ford.com/. The URL guides the investor about the company, its
products, investor relations, media relations, et cetera
6 Who is the company’s auditor? (Not audit committee)
Pricewater House Coopers
7 On what page are the four financial statements located
Statement of Operations (or Income Statement)- Page 102
Balance sheet (or Statement of Financial Condition)- Page 104
Statement of Owner’s Equity – Page 102
Statement of Cash Flows- Page 106
Weekly Stock Price(4thJan’2016-19th Jan’2016)
Determine the amounts your company reports for total assets, total liabilities, and total stockholders' equity in the balance sheet for the most recent year.
Total Assets: $208, 527 million (Page 104)
Total Liabilities: $183, 353 million (Page 104)
Stockholder Equity: $24,832 million (Page 104)
Does your company refer to its income statement using another name? If so what is it?
No, it uses the term income statement only. (Page 102)
Determine the amounts your company reports for net sales and net income in its income statement for the most recent year.
Net Sales: $135782 million(Page 102)
Net Income: $3186 million((Page 102)
Does your company refer to its balance sheet by another name? If so what is it?
No, it uses the term balance sheet only. (Page 104)
Is your company size increasing? Determine your answer by calculating the change in total assets and change in net sales for the most recent year.
Change in total assets(Page 104):
2013: $202, 179 million
2014: $208, 527 million
Change in total sales(Page 102):
2013: $139369 million
2014: $135782 million
Our calculation reveals that while the asset base of the company has increased, it failed to register surge in revenue figures.
Is your company total profitability increasing? Determine your answer by calculating the change in net income for the most recent year.
Net Income: (Page 102)
2013: $7182 million
2014: $3187 million
Change : -55.62%
Our calculation reveals that the company is facing tough times with profit figures down by -55.62% in one year.
Did your company issue any common stock in the most recent year?
No, the company did not issue any common stock during 2014. (Pg 106)
Do you see the term debit or credit listed in the balance sheet or income statement? Which account types in the balance sheet increase with a debit and which ones increase with a credit?
No, the financial statements of the company do not use the term, debit or credit, explicitly in the annual report. As for the balance sheet, while assets carry a debit balance, liabilities and equity carry a credit balance.
For the most recent year, what amount does your company report for current assets? What assets are listed as current assets? What is the ratio of current assets to total assets?
During 2014, the company reported current assets worth $155,052 million. The current assets of the company composed of cash, inventory,marketable securities and finance receivables. (Page 104)
Ratio:Current Assets/ Total Assets
For the most recent year, what amount does your company report for current liabilities? What liabilities are listed as current liabilities? What is the ratio of current liabilities to total liabilities?
During 2014, the company reported current liabilities worth $77141 million. The current liabilities of the company are composed of short term debt, accounts payable, accrued liabilities, deferred revenues. (Page 104)
Ratio:Current Liabilities/ Total Liabilities
What does the Report of Independent Registered Public Accounting Firm indicate about your company internal controls?
Price Waterhouse Coopers, the independent external auditors of the company, has opined that the company maintained effective internal control over financial reporting and every action in this regard was in conformity to Internal Control- Integrated Framework. (Page 100)
In the summary of significant accounting policies, how does your company define cash equivalents?
Referring to note 4 of the financial statements, the company defines cash equivalents as those highly liquid investments that are readily convertible to cash and the one which are subject to insignificant risk of change in value due to interest rate fluctuation, quoted price or penalty on withdrawal. (FS-17)
What is the amount of cash reported in the two most recent years? By how much has cash increased/decreased?
2013: $14468 million
2014: $10757 million
Determine the amounts your company reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year?
Cash Flow from Operating Activities: $14507 million
Cash Flow from Investing Activities: -$21124 million
Cash Flow from Financing Activities: $3423 million
Total Cash Flow: -$3711 million
Determine whether the trend in net sales has been increasing or decreasing for the past three years.
2012: $126,567 million
2013: $139,369 million
2014: $135,782 million
Referring to the above figures we witness that while during 2013, the company did managed to register increase in revenue figures, during 2014, it witnessed a sluggish demand and a resultant fall in the revenue figures.
Where is net accounts receivable reported?
Account receivables are reported in the balance sheet. (Page 104)
Does your company report an allowance for uncollectible accounts in the balance sheet? If so, how much is reported for the most recent year?
Referring to Note 5 of the financial statements, we found that the company does create an allowance for uncollectible accounts. During 2014, an amount of $321 million was reported as an uncollectible amount. (FS-20)
In the summary of significant accounting policies, what is your company procedure in accounting for inventory?
Referring to Note 8 of the financial statements, we found that the company value its inventory on a FIFO basis and are stated at the lower of cost or market value. (FS 27)
For the most recent year, what is the amount of inventory in the balance sheet?
Does your company refer to its cost of goods sold using a different name?
Yes, the company cites cost of goods sold as cost of sales (Page 102)
For the most recent year, what is the amount of cost of goods sold in the income statement?
$123,516 million(Page 102)
Calculate your company gross profit ratio for each of the three years.
Gross Profit:Revenue-Cost of Sales
2012: 126567-113039= $13528 million
2013: 139369-125195= $14174 million
2014:135782-123516= $12266 millon
The summary of significant accounting polices is located in footnote to the financial statements. Locate the section on property and equipment. What depreciation method does your company use?
Referring to Note 10 of the financial statements, we found that the company depreciate its property and equipment using the straight - line method.( FS-29)
What are the estimated useful lives for buildings, leasehold improvements, and property and equipment?
Building: 36 years
Leasehold Improvements: N/A
Property: 30 years
Equipment: 14.5 years
What is the original cost of property and equipment?
Calculate the current ratio for the past two years. Did the current ratio improve or weaken in the most recent year?
Current Ratio: Current Assets/ Current Liabilities
2013: 151569/74131= 2.04
2014: 155052/77141= 2.01
Referring to our calculation, we found that current ratio has decreased over the year.
Calculate the acid-test (quick) ratio for the past two years. Did the acid-test ratio improve or weaken in the most recent year?
Quick Ratio: (Cash+ Receivables)/ Current Liabilities
2013: (14468+77481)/74131= 1.24
2014: (10757+81111)/77141= 1.19
Referring to our calculation, we found that the quick ratio has decreased over the year.
Was there any addition or reduction to long term debt in the past year?
Yes, during the year, the company raised $40043 million through issuance of debt while short-term debt worth $3870 million was retired. (Page 106)
What is the par or stated value per share for the common stock?
The company has two class of common stock, Class A Stock and Class B Stock. Both the class of common stock has a par value of $0.01 per share. (Page 104)
How many common shares were outstanding at the end of the most recent year?
Did the company have any treasury stock? How many shares?
Yes, the company owns 103 million treasury shares worth $848 million. (Page 104 and FS-23)
How much did the company pay in cash dividends in the most recent year total and per share?
The company paid $1952 million in dividends this year, amounting to $$0.50 per share.
Ford Motors. "Annual Report 2014." Annual Filing. 2015.