Form 10-K or the annual report provides comprehensive overview of a company’s performance and economic health to the relevant stakeholders (U.S. Securities and Exchange Commission). Form 10-K is available to the public free of charge and can be requested by anyone by writing to a publicly-listed company. Most publicly-listed companies now make 10-K and other reports such as 10-Q available on their corporate websites. Form 10-K helps the reader evaluate different aspect of the organization such as finances, opportunities, and risks. Even though 10-K contains financial statements such as income statement, balance sheet, and cash flow statement, they are only one part of the report. The company also includes several other quantitative and qualitative data in the form 10-K.
One of the information contained in the 10-K is the description of the business such as the products and/or services it sells and the markets it operates in. The management of the organization also discusses the various risks the business faces and the litigations it may be involved with or expects to be involved with in the near future. The company also discusses its accounting policies in the 10-K so that the readers have a better understanding of the data they see in the financial statements and are also able to better compare with the company’s performance with competitors. These are some of the things contained in 10-K which help relevant stakeholders better understand the current status as well as the future potential of the company they are examining.
Like other publicly-listed companies, Ford Motor Company (Ford) also publishes 10-K report every year. The company’s 10-K form for the fiscal year 2012 contains several important pieces of information of which three are the subject of this paper. One of the things I have learned by studying Ford’s 10-K is that the country may derive a significant proportion of revenue from automobile sales in the U.S. but it is truly a global company. The company’s international operations are so significant that its mainstream automobile business is divided into four main geographical segments. The first segment is Ford North America which generated sales of 17.5 million units in the fiscal year 2012. The second segment is Ford South America which contributed sales of 5.6 million units in the fiscal year 2012. Ford Europe was responsible for sale of 14 million units and Ford Asia Pacific America yielded staggering sales of 33.4 million units during the same period (Ford, 2012). This shows that even automobile companies now depend upon emerging economies for future growth.
The second important thing learnt by studying Ford’s 10-K form for the year 2012 is that not only Ford but other automobile companies are facing the pressure to enhance the fuel efficiency of automobile products. Ford’s 10-K mentions several countries or regions that have already passed or expect to passed stricter fuel emissions regulations including the U.S., Canada, Europe, Mexico, and even Asian Pacific countries such as Australia, China, India, South Korea, and Vietnam. As a result, the company continues to invest in research activities to continuously improve the fuel efficiency of its products (Ford, 2012).
Ford’s 10-K also enables readers to know about the legal issues company is currently involved with. The company reports it’s a defendant in many cases in state and federal courts that stem from claims of injuries related to Ford’s products. The company is also involved with a number of asbestos litigations since asbestos was used in several components since the early 1900s. Ford also expects to incur costs as a result of potential violations of state and federal environmental regulations that could be significant (Ford, 2012).
- Ford. (2012). Form 10-K. Delaware: Ford Motor Company. Print.
- U.S. Securities and Exchange Commission. (n.d.). Form 10-K. Retrieved May 10, 2014. Web.
