This will be a multiple part analysis of the Ford Motor
Company Inc. Ford’s ticker symbol is F.
Income Sheet:
Here is a chart of the company’s Income Sheet. The Income Sheet
is one part of the Financial Statement. The income sheet shows the amount of
revenue earned by the company for a specific period of time. It also
incorporates the costs that the company has incurred to earn its revenue.
Morningstar Inc
Revenue growth for Ford(F) over the last three years has averaged 4.4%, compared to General Motors’ (GM) 4.66. The significant decrease in revenue in 2012 was due to the incredibly weak car market in Europe and poor economic conditions in the United States, which resulted in losses for many auto manufacturers. Ford took an active approach to the European crisis. The company closed factories and began to build cars that appealed to the consumer’s taste in the area, a lesson that they used to turn around their North American unit.
Earnings-per-share rose 23.94% in fiscal year 2013,
signaling that Ford has been able to make a come back from a challenging 2012.
As well, in the first quarter of 2014, Ford reported its first profit in its
European segment in three years.
A worrying concern is Ford’s shrinking margins. In 2014,
Ford will launch 23 new models globally, which is one of the most aggressive
plans in the history of auto manufacturers. This new line of products has
resulted in lower margins, due to costs from research and development, redesigning
factories, and special advertisements. But Ford’s dedication to innovating and
creating new products that consumers will buy is evident in its lofty goals and
actions, such as building F-150s out of aluminum which will save approximately
700 pounds per vehicle.
Area Growth:
In the second Quarter of 2014, Ford’s market share in South
Africa increased 1.9% since 2011 to 10.3%. Ford has also had record growth in
China. Ford controls 4.6% of the market share, compared to just 2.7% in 2011. As
Ford’s market share has grown, the company has surpassed its rival, Toyota
Motor Inc, in the number of car sold in China. Though Ford has been successful
in many foreign markets, they are expecting larger losses in South America than
in previous years.
Ford has exhibited strong growth in these two countries,
which have large amounts of growth potential within their car markets. I
believe Ford will continue to grow in these foreign markets because of their
new product lineup.
Balance Sheet:
The balance sheet of a company shows the current financial
position of a company, such as how much debt does the company have or how many
assets does the company hold.
Shareholder’s Equity=Assets-Liabilities
Shareholder’s Equity- The amount of money that would be left
if a company sold all of its assets and paid off all of its liabilities. The
amount of money a company keeps after paying for its expenses, taxes, and
dividends or stock buy-backs is called retained earnings. Retained earnings and
the money a company earns from selling stock are two main components of
shareholder’s equity.
Assets- Include items that the company holds that are of
value: Physical plants or stores, machinery, products, and supplies. Intangible
Assets are items that do not have a definite monetary value, such as brand
recognition, the company’s relationship between their employees, customer
loyalty, and trademarks and patents.
Liabilities- The amount of money the company owes to other
people. This includes expenses such as the payroll to employees or loans that
it owes to a bank.
Here is a link to Ford’s Balance Sheet http://www.marketwatch.com/investing/stock/f/financials/balance-sheet
Ford has significantly decreased the amount of debt the
company holds in the last five years. This also means that the company will be
spending less on debt interest payments.
Ford’s total amount of liabilities has risen but at a
smaller rate than their asset, resulting in Shareholder Equity to increase.
Ford has not had a large increase in the amount of shares outstanding, meaning
retained earnings have increased.
Disclaimer: I am just a kid with no proper financial
training. This report will not guarantee investing success.
