Financial Accounting
Financial Statement Analysis Project
Instructions
For this project, you will use the provided financial statements for Ford Motor Company. Take the two years given and perform the required financial ratios listed below. First, compare the ratios of each company for the past two years to each other, then compare the two companies to each other. In comparing the ratios you will need to discuss which year and which company has a better ratio and why you think that. Justify your rationale and explain your findings in detail in your analysis. Write at least one paragraph discussing your results. You can do the assignment directly in this document by editing it and filling out the information then uploading it to Canvas, or you may print this document and fill it out by hand and scan it and upload it to Canvas.
- What is the ratio used for, what is its purpose
- Write out formula
- Fill out formula using the two years financial statement information for both companies
- Your interpretation of ratio in at least one paragraph
2016 2015
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FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENT (in millions, except per share amounts) For the years ended December 31, 2015 2016 2017 $ $ Revenues Automotive Financial Services Other Total revenues (Note 4) 141,546 10,253 140,566 $ 8,992 145,653 11,113 10 156,776 1 149,558 151,800 Costs and expenses Cost of sales Selling, administrative, and other expenses Financial Services interest, operating, and other expenses Total costs and expenses 124,446 10.763 7,368 142,577 126,183 10,972 8,904 146,059 131,332 11,527 9,104 151,963 773 894 1,133 Interest expense on Automotive debt Non-Financial Services other income (loss), net (Note 5) Financial Services other income/loss), net (Note 5) Equity in net income of affiliated companies Income before income taxes Provision for/(Benefit from) income taxes (Note 7) Net income Less: Income (Loss) attributable to noncontrolling interests Net income attributable to Ford Motor Company 1,854 372 1,818 10.252 2.881 7,371 (269) 438 1,780 6,796 2,189 4,607 3,060 207 1,201 8,148 520 7,628 26 7,602 (2) 11 4,596 $ S 7,373 EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK (Note 8) Basic income 1.86 $ Diluted income 1.84 1.16 $ 1.15 1.91 1.90 0.60 Cash dividends declared 0.85 0.65 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in millions) For the years ended December 31, 2015 2016 2017 7,371 4,607 $ $ GA 7,628 314 (1,024) (8) 219 Net income Other comprehensive income/(loss), net of tax (Note 21) Foreign currency translation Marketable securities Derivative instruments Pension and other postretirement benefits Total other comprehensive income (loss), net of tax Comprehensive income Less: Comprehensive income/loss) attributable to noncontrolling interests Comprehensive income attributable to Ford Motor Company (1,132) (6) 227 (81) (992) 6,379 (34) (265) 37 56 52 (757) 3,850 10 (2) 6,381 7,680 24 7,656 $ $ 3,840 $ The accompanying notes are part of the financial statements. FS-3 FORD MOTOR COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in millions) December 31 2016 December 31, 2017 $ 18,492 20,435 ASSETS Cash and cash equivalents (Note 9) Marketable securities (Note 9) Financial Services finance receivables, net (Note 10) Trade and other receivables, less allowances of $392 and $412 Inventories (Note 12) Other assets Total current assots 15,905 22,922 46,266 11,102 8,898 3,368 108.461 Financial Services finance receivables, net (Note 10) Net investment in operating leases (Note 13) Net property (Note 14) Equity in net assets of affiliated companies (Note 15) Deferred income taxes (Note 7) Other assets Total assets 49,924 28,829 32,072 3,304 9.705 5,656 237,951 $ 52,210 10,599 10,277 3,889 115,902 56,182 28,235 35,327 3,085 10,973 8,104 257,808 $ $ 21.296 $ 19,316 2,685 46.984 90.281 23,282 19,697 3,356 48,265 94,600 24,395 13,222 80,079 691 208,668 24,711 12,575 90,091 815 222,792 LIABILITIES Payables Other liabilities and deferred revenue (Note 16) Automotive debt payable within one year (Note 18) Financial Services debt payable within one year (Note 18) Total current liabilities Other liabilities and deferred revenue (Note 16) Automotive long-term debt (Note 18) Financial Services long-term debt (Note 18) Deferred income taxes (Note 7) Total liabilities Redeemable noncontrolling interest (Note 20) EQUITY Common Stock, par value $.01 per share (3,987 million shares issued of 6 billion authorized) Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized) Capital in excess of par value of stock Retained earnings Accumulated other comprehensive income/(loss) (Note 21) Treasury stock Total equity attributable to Ford Motor Company Equity attributable to noncontrolling interests Total equity Total liabilities and equity 96 98 40 40 1 21,630 15,634 (7,013) (1,122) 29,170 17 .29.187 237,951 $ 40 1 21,843 21,218 (6,959) (1,253) 34,890 28 34,918 257,808 $ The following table includes assets to be used to settle liabilities of the consolidated variable interest entities ("VIES"). These assets and liabilities are included in the consolidated balance sheet above. See Note 22 for additional information on our VIES December 31 2016 December 31, 2017 $ ASSETS Cash and cash equivalents Financial Services finance receivables, net Net investment in operating leases Other assets LIABILITIES Other liabilities and deferred revenue Debt 3,047 $ 50,857 11,761 25 3,479 56,250 11,503 64 S 5 $ 43,730 2 46,437 The accompanying notes are part of the financial statements. Table of Contents GENERAL MOTORS COMPANY AND SUBSIDIARIES Item 8. Financial Statements and Supplementary Data CONSOLIDATED INCOME STATEMENTS (In millions, except per share amounts) Years Ended December 31, 2016 2017 2015 $ $ $ 133,449 12,139 145,588 140,205 8,979 149,184 129,864 5,861 135,725 Net sales and revenue Automotive GM Financial Total net sales and revenue Costs and expenses Automotive cost of sales GM Financial interest, operating and other expenses Automotive selling, general and administrative expense Total costs and expenses Operating income Automotive interest expense Interest income and other non-operating income, net Gain on extinguishment of debt Equity income (Note 8) Income before income taxes Income tax expense (benefit) (Note 18) Income from continuing operations Income (loss) from discontinued operations, net of tax (Note 3) Net income (loss) Net loss attributable to noncontrolling interests Net income (loss) attributable to stockholders 114,869 11,128 9,575 135.572 10,016 575 290 120,499 8,369 10,354 139,222 9,962 563 327 112,995 5,304 11,888 130,187 5,538 30 423 614 449 2,193 8,371 (1,219) 9,590 25 2.282 12,008 2,739 9,269 2,132 11,863 11,533 330 (4,212) (3,882) 18 (3,864) (1) 9,268 159 9,427 9,615 72 9.687 S $ $ Net income (loss) attributable to common stockholders S (3.880) $ 9,427 $ 9,687 6.12 $ $ $ 6.09 0.02 6.11 1,586 6.12 1,540 Earnings per share (Note 21) Basic earnings per common share - continuing operations S 0.23 $ Basic carnings (loss) per common share - discontinued operations $ (2.88) $ Basic earnings (loss) per common share $ (2.65) $ Weighted average common shares outstanding -- basic 1,465 Diluted earnings per common share - continuing operations S 0.22 $ Diluted earnings (loss) per common share - discontinued operations S (2.82) S Diluted earnings (loss) per common share S (2.60) $ Weighted-uverage common shares outstanding-diluted 1,492 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) 6.00 $ $ 5.89 0.02 5.91 1,640 $ 6.00 1,570 Years Ended December 31, 2017 2016 (3,882) $ 9.268 2015 9,615 $ Net income (loss) Other comprehensive income (loss), net of tax (Note 20) Foreign currency translation adjustments and other Defined benefit plans Other comprehensive income (loss), net of tax Comprehensive income (loss) Comprehensive loss attributable to noncontrolling interests Comprehensive income (loss) attributable to stockholders (955) 1,011 56 747 570 1,317 (2,565) 20 (2,545) $ (384) (969) (1,353) 7.915 218 8,133 9,671 53 S 9,724 Reference should be made to the notes to consolidated financial statements. 46 GENERAL MOTORS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except per share amounts) December 31, 2017 December 31, 2016 S 15,512 $ 8,313 8,164 20,521 10,663 1,106 12,574 11,841 8,700 16,127 11,040 1,110 3,633 11,178 76,203 4,465 68,744 21,208 9,073 36,253 5,849 42.882 23,544 4929 17,001 8,996 32,603 6,149 34,342 33,172 3,849 143.738 212.482 9,375 145,487 221.690 $ 23,929 S 23,333 ASSETS Current Assets Cash and cash equivalents Marketable securities (Note 4) Accounts and notes receivable (net of allowance of $278 and $212) GM Financial receivables, net (Note 5; Note 12 at VIES) Inventories (Note 6) Equipment on operating leases, net (Note 7) Other current assets (Note 4; Note 12 at VIES) Current assets held for sale (Note 3) Total current assets Non-current Assets GM Financial receivables, net (Note 5; Note 12 at VIES) Equity in net assets of nonconsolidated affiliates (Note 8) Property, net (Note 9) Goodwill and intangible assets, net (Note 11) Equipment on operating leases, net (Note 7; Note 12 at VIES) Deferred income taxes (Note 18) Other assets (Note 4; Note 12 at VIEs) Non-current assets held for sale (Note 3) Total non-current assets Total Assets LIABILITIES AND EQUITY Current Liabilities Accounts payable (principally trade) Short-term debt and current portion of long-term debt (Note 14) Automotive GM Financial (Note 12 at VIES) Accrued liabilities (Note 13) Current liabilities held for sale (Note 3) Total current liabilities Non-current Liabilities Long-term debt (Note 14) Automotive GM Financial (Note 12 at VIES) Postretirement benefits other than pensions (Note 16) Pensions (Note 16) Other liabilities (Note 13) Non-current liabilities held for sale (Note 3) Total non-current liabilities Total Liabilities Commitments and contingencies (Note 17) Equity (Note 20) Common stock, S0.01 par value Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Noncontrolling interests Total Equity Total Liabilities and Equity 2,515 24,450 25,996 1,060 22,737 25,893 12,158 85,181 76,890 10.987 56,267 5,998 13,746 12,394 9.500 41,826 5,803 15,264 12,415 7,626 92,434 177,615 99,392 176,282 14 25,371 17,627 (8,011) 35,001 1,199 36,200 212,482 15 26,983 26,168 (9,330) 43,836 239 44,075 221,690 $ $
