Ford Motor Company, also called Ford or Ford Motors, was made a corporation in 1919 in Delaware. The original Ford Motor Company was based in Michigan and had been made a corporation in 1903. The company sells automobiles including trucks and cars. Besides that, it also engages in the financing of vehicles. It has several subsidiaries including JMC Motors and the Lincoln Motor Company. The following is an overview of its 10-k report for the financial year ending December 2012.
Global Financial Operations
For the financial period mentioned above, the company divided its main regions of focus into four. Namely; Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific And Africa. Of all the four regions, the North American region accounted for the largest percentage of vehicle sales with 2,784,000 units being sold. This region was followed by the European one where the company sold 1,353,000 units in the year. The third in volume was the Asia Pacific and African region which accounted for 1,033,000 units sold. The last region in contributions was the South American one that accounted for 498,000 units. The total money received from its automotive services including the sale of vehicles was $6,010,000,000 and $1,710,000,000 from its financial services.
From the information given above, it can be discerned that Ford Motors has a strong global presence in the motor vehicle industry. However, like most multinational companies, it is most strong in its domicile country of the U.S.A and other North American countries. The fact that it also has a strong presence in Europe means that it makes premium vehicles sold to mostly first-world nations such as the United States and Europe. The truth can be verified by less presence in mostly poor economies such as those in South America, Asia Pacific and Africa. In general, its global financial presence is stable owing to its diversification into services beyond vehicles.
Standout Assets
At the end of 2012, Ford’s current assets were $125,174,000,000. The total amount of assets was $189,406,000,000. Of all the assets, the largest were its net receivables that amounted to $81,869,000,000. These were followed by property, plant and equipment that were at $40,245,000,000. Third in rank were the short-term investments that amounted to $20,284,000,000.
These assets stood out not only because of their amounts but also because they mean a lot to the future of the firm. The net receivables mean that the firm has expectations that money shall flow in the foreseeable future. This aspect would most likely strengthen the confidence of the investors in the company. Having property, plant and equipment worth over $40 billion is a sign that the company can access financing from banks other lending institutions without a problem. It also means that the company can carry out production into the foreseeable future. This aspect strengthens the confidence of various parties interested in the affairs of the company including investors, customers and regulatory bodies such as taxation agencies. As for the short term investments, it means that the company also expects returns in the near future stemming from investments. The result would be that the company is expected to operate into the foreseeable future.
Financing
Ford Motor Company has various sources of financing. The three main ones are the income earned from the sale of motor vehicles including trucks and cars; income from its financial services; and loans from lending agencies. The sale of motor vehicles is the main one given that Ford has an array of highly selling car and truck models. Its cars are often rated as the best in their class as evidence by the Ford Kuga, which was voted as the best Sports Utility Vehicle (SUV) in 2013. As stated above, the company earned $6,010,000,000 from the sale of vehicles. With its strong global presence, the company obtains a lot from its global operations.
The company’s financial sources include the offer of credit to vehicle buyers; leasing of vehicles; vehicle protection using Global Positioning Services (GPS); and commercial financing for customers who buy vehicles in bulk. These services contributed immensely to the balance sheet of the vehicle company. The third source of finance was loans from lending agencies. Ford Motors has a high credit rating owing to its good performance in the market and a long history of operation. The firm can thus easily obtain loans from banks and other lending institutions. From this information, it can be discerned that Ford does not depend much on external financing. Rather, it relies on its internal sources of finance to undertake various activities such as expansion into other markets. Given that the motor vehicle industry is highly competitive, the company needs to come up with better technologies meant at reducing pollution such as electric cars. It faces stiff competition from the likes of Chrysler, KIA Motors, Mercedes, BMW and new entrants such as Tesla Motors. However, the company’s finances show that it is prepared to face the competition.
In conclusion, Ford Motors has strong financial statements that elicit investor and consumer confidence. Ford has had problems in history but has overcome all of them to emerge as one of the best car manufacturers. Its investments in smart technologies such as electric cars and safe driving equipment position the company well for the future where all equipment shall be connected using the internet and use little amounts of energy. In the end, the company shall carry forward Henry Ford’s focus on providing cars for each person.
- Ford Motor Company. Operating Highlights. Retrieved from: http://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2012-annual-report.pdf
- Ford Motor Company. Securities and Exchange Commission. Retrieved from https://www.google.com/search?q=ford+motor+company+10k&rlz=1C1KMZB_enKE574KE574&oq=ford+&aqs=chrome.1.69i59l2j69i57j69i59j69i60.2801j0j4&sourceid=chrome&es_sm=93&ie=UTF-8
