Insights for Future Investors of Ford MGMT 521 September 26, 2011 Ellen Thomas Insights for Future Investors of Ford Motor Company Future investors of any company needs to conduct research to find if the company they plan to invest in is worth investing in. They should look at financial statements to determine if the company is making a profit or loss. Investors should also look at the types of global marketing that the company invests in to see if the company’s expansion to other countries is increasing the profits made. Information technology is also important to determine the accessibility of the information to investors and suppliers. Benchmarking is crucial to any business because it can analyze the competition and help Ford in making better decisions in management and also in the products and services that are provided.
According to Brue (2010), monetary policy is defined as a central bank’s changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth. The automotive market is directly affected by the economy of the United States which is also directly controlled by monetary policy. In the automotive industry, there are two target groups of people that are marketed towards. These two groups are the “Baby Boomers” and “Generation Y.” Akers (2001) reported that the “Baby Boomers” own more than 70% of the financial assets in the United States, they control 70% of the households in the United States, and the “Baby Boomers” purchase 61% of all new cars and 48% of all luxury cars. “Generation Y” is now entering the high spending years of their early adulthood.
Cash Flow Statement-Ford Motor Company Samantha Hawthorne OMM622: Financial Decision Making Instructor: John Kuhn August 19, 2014 The statement of cash flow reports the cash receipts and the net change in cash resulting from the operating, investing, and financing activities of a company during a period. Operating activities include the cash effects of transactions that create revenues and expenses and enter into the determination of net income. The types of operating cash inflows are from sales of products and services and from interest and dividends. The out flows are to supplies for inventory, employees for service, government taxes, to lenders for interests and others for expenses. There are two approaches for presenting the operating activities direst method and indirect method.
They may take a gander at income and contrast it with financial markers, or may take a gander at different pointers, for example, the quantity of new stores an organization opens or the quantity of requests for the merchandise it produces. Financial analysts use forecasting to extrapolate how patterns, for example, GDP or unemployment, will change in the impending quarter or year. The farther is forecast, the higher the chances that the evaluation will be less precise. In order to forecast Apple's income statement accurately, it obliges a top-line down way to deal with Apple's direction. You need to start the examination by taking a gander at Apple's income direction.
Accrual basis accounting records the transaction immediately in a type of account, such as accounts payable, money owed to other companies for services; or accounts receivable “money owed by its debtors” ("Google.com", 2012). Later when the business pays out or is paid; they perform a balance by debiting one account and balancing by credit the corresponding and opposite account. Tracking the relationship between purchase and sale easier, something cash basis accounting fails at. In general, accrual basis accounting is preferred at tax time and for medium to large business. The classic example is expense.
The vertical analysis of the income statement reports amounts as a percentage of sales. The restated amounts are known as a common-size income statement, horizontal analysis concentrate more on the reported numbers on the financial statements over the past years. The Balance Sheet and the Statement of Income are very important, but they don’t provide enough information for a financial management. The Ratio Analysis in financial statements is to analyze progress of the business. Ratio Analysis enables managers to compare its performance and condition with the average performance of similar businesses in the same industry.
Did the distribution signal a change in the company’s appetite for making acquisitions or future capital expenditures? If shareholders collectively elected to receive less than $10 billion in cash, how would Ford distribute the remaining cash?
As for stockholders they mainly use this information for forecasting dividends, earnings on the free cash flow. Question 2 What qualitative factors should analysts look for when evaluating a company’s likely future financial performance? Explain. When evaluating a company's future financial performance, some qualitative factors that should be considered are future prospects, the current environment weather it may be legal or regulatory, the competition , economy, the level of dependents on the
Case 10: One Ford Strategic Management 4813 Can Ford continue to keep its current momentum moving forward? It has transformed from a loss situation to a profit making business since 2006 when Alan Mulally became CEO, but can he continue that trend? In order to better understand the activities through which Ford develops a competitive advantage and creates value for its shareholders, it is useful to separate it into a series of value-generating activities referred to as the value chain. Michael Porter, in his 1985 book Competitive Advantage, introduced and outlined a standard value chain approach that delineates a series of activities which appear to be common to a wide array of firms. (Porter, 1985) These activities are separated into two main categories, primary activities and support activities.
If you were a minority shareholder in Koito Manufacturing, whose side would you take – Koito’s or Pickens? Calculate the value of your shares with and without Toyota. [Hint: you should imagine some alternative scenarios of what would happen to the cash flows under both situations and use the Discounted Cash Flow methodology, for example]. Based on your assessment of the case, are large shareholders an effective solution