Ford Business Analysis
Introduction
A company’s financial health is the deciding factor of future growth. As humans, we rely on health checkups to improve and maintain our health. Same thing goes for businesses. Without maintaining proper financial health that company will not be around long afterwards. I want to begin by presenting and comparing Ford Motor Company’s income statement, balance sheet, and cash flow to determine the financial health of the company versus two of the company’s current competitors.
Income Statement
Five different categories are covered on a company’s income statement. Those categories are Total Revenue, Gross Profit, Operating Income or Loss, Net Income, and Net Income Applicable to Common Shares. These categories are usually viewed quarterly or annually. The main purpose of the income statement is to show management as well as investors, whether money was lost or made during reported time periods. Total revenue is the price of the product times the quantity sold. Gross profit is revenue minus cost. Operating income or loss is negative income from operations. Net income applicable to common shares is bottom-line profit belonging to stockholders. In the annual report starting January 1, 2010 and ending December 31, 2010, Ford Motor Company reported Total Revenue at $128,954,000 with Cost of Revenue as $104,451,000. That is a Gross Profit of $24,503,000. On that same day, General Motors posted Total Revenue at $135,592,000 and Cost of Revenue at $118,944,000. Gross Profit of $16,648,000. Honda Motor Company, which annual reporting started on April 1, 2010, and ended on March 31, 2011, reported Total Revenue at $107,829,000 with Cost of Revenue being $78,389,000. Gross profit of $29,440,000. Ford Motor Company’s operating expenses where relatively high when compared to General Motors and Honda Motor Company. Ford reported Operating Income or Loss of $6,658,000. The figure was determined after subtracting $18,061,000 from the gross profit and also
A company’s financial health is the deciding factor of future growth. As humans, we rely on health checkups to improve and maintain our health. Same thing goes for businesses. Without maintaining proper financial health that company will not be around long afterwards. I want to begin by presenting and comparing Ford Motor Company’s income statement, balance sheet, and cash flow to determine the financial health of the company versus two of the company’s current competitors.
Income Statement
Five different categories are covered on a company’s income statement. Those categories are Total Revenue, Gross Profit, Operating Income or Loss, Net Income, and Net Income Applicable to Common Shares. These categories are usually viewed quarterly or annually. The main purpose of the income statement is to show management as well as investors, whether money was lost or made during reported time periods. Total revenue is the price of the product times the quantity sold. Gross profit is revenue minus cost. Operating income or loss is negative income from operations. Net income applicable to common shares is bottom-line profit belonging to stockholders. In the annual report starting January 1, 2010 and ending December 31, 2010, Ford Motor Company reported Total Revenue at $128,954,000 with Cost of Revenue as $104,451,000. That is a Gross Profit of $24,503,000. On that same day, General Motors posted Total Revenue at $135,592,000 and Cost of Revenue at $118,944,000. Gross Profit of $16,648,000. Honda Motor Company, which annual reporting started on April 1, 2010, and ended on March 31, 2011, reported Total Revenue at $107,829,000 with Cost of Revenue being $78,389,000. Gross profit of $29,440,000. Ford Motor Company’s operating expenses where relatively high when compared to General Motors and Honda Motor Company. Ford reported Operating Income or Loss of $6,658,000. The figure was determined after subtracting $18,061,000 from the gross profit and also
References: (www.finance.yahoo.com/q/is?s=F+Income+Statement&annual) (www.finance.yahoo.com/q/bs?s=F+Balance+Sheet&annual) (www.finance.yahoo.com/q/cf?s=F+Cash+Flow&annual) (www.finance.yahoo.com/q/is?s=GM+Income+Statement&annual) (www.finance.yahoo.com/q/bs?s=GM+Balance+Sheet&annual) (www.finance.yahoo.com/q/cf?s=GM+Cash+Flow&annual) (www.finance.yahoo.com/q/is?s=HMC+Income+Statement&annual) (www.finance.yahoo.com/q/bs?s=HMC+Balance+Sheet&annual) (www.finance.yahoo.com/q/cf?s=HMC+Cash+Flow&annual)