Sign In
Not register? Register Now!
Essay Available:
Pages:
4 pages/β‰ˆ1100 words
Sources:
Check Instructions
Style:
Other
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 25.27
Topic:

Ford Company Valuation and Performance

Coursework Instructions:

Week 10 Assignment - Company Valuation and Performance
Overview
In last week's learning activity, you examined the areas or indicators in the income and cash flow statements that are most important for determining corporate valuation and performance. In this assignment, you choose an actual company and analyze those statements to assess corporate valuation and performance.
Preparation
Choose a publicly held company and review its 2019 annual report. Pay particular attention to the income and cash flow statements upon which this assignment is based.
Instructions
Provide 4–5 page analysis and evaluation of your chosen company's valuation and performance. Do the following:
Justify which common accounting test should be used on the income and cash statements to best reveal insights into corporate valuation and performance. Make sure to identify your criteria.
Conduct your chosen test and share the computations and results.
Evaluate corporate valuation and performance accurately by interpreting test results and comparing them to industry benchmarks or primary competitors.
Justify your choice of a business area that represents the best opportunity for business improvement based upon your results and findings.
This course requires the use of Strayer Writing Standards.

Coursework Sample Content Preview:

Ford Company Valuation and Performance
Student Name
Institutional affiliation
Ford Company Valuation and Performance
Company Background
Ford Motors is a leading American automotive company that has extended its brands in the global markets. The company's performance has been declining over the past few years. In the 2019 financial year, the company recorded a drastic decline in operating revenue to $47 M (Ford, 2019).
Income Statement Analysis
Ford Consolidated Income Statement
Fiscal year

2017-12

2018-12

2019-12

TTM

Revenue

156776

160338

155900

136433

Cost of revenue

131332

136269

134693

116499

Gross profit

25444

24069

21207

19934

Operating expenses





Sales, General and administrative

11527

11403

11161

11516

Total operating expenses

11527

11403

11161

11516

Operating income

13917

12666

10046

8418

Interest Expense

10237

10691

10521

7957

Other income (expense)

4468

2370

-165

3162

Income before taxes

8148

4345

-640

3623

Provision for income taxes

520

650

-724

209

Net income from continuing operations

7628

3695

84

3414

Other

-26

-18

-37

6

Net income

7602

3677

47

3420

To analyze Ford Income statements, we employ horizontal and ratio analysis. Horizontal analysis is preferred because it indicates; growth and trends in income statement values, and also it is consistent with GAAP [generally accepted accounting principles] (Penman & Penman, 2010). The company recorded a net income of $7602 M in 2017, $3677 M in 2018, and $47 M in 2019 compared to the industrial average 2019 of $3220 M.
Horizontal analysis of Net Income
Year

2017

2018

2019

Industry Average

Gross profit

16.2 %

15.0%

13.6%

14.2%

Operating profit

8.9%

7.9%

0.40%

6.2%

Net profit

4.8%

2.3%

0.03%

2.5%

The calculations above indicate that gross profits have been declining over the years. The decrease can be attributed to an increase in the cost of production. The operating profits have decreased over the years from 2017 to 2019. The decrease can be attributed to an increase in the cost of sales. The net income decreased significantly over the years to a low of 0.003% in 2019. Overall, the company's income performance has been deteriorating over the years. Compared to the industry average, the company has been performing below average in the three years, especially the 2019 financial year (Ford, 2019). Management needs to strategize and reduce the increased costs as a road to performance recovery.
Income Statement Ratio Analysis
Financial ratios are useful tools used in analyzing financial statements. Ratio analysi...
Updated on
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
Order

πŸ‘€ Other Visitors are Viewing These Other Coursework Samples: