Go to Ford Motor Company’s Web site and access its most recent annual report. Answer the following questions:

1. What are the functional currencies of Ford’s subsidiaries?

2. How much and where did Ford report the gain or loss on remeasurement of its subsidiaries’ financial statements? From what currencies were the subsidiaries’ financial statements remeasured into dollars? How material are these gains or losses with respect to Ford’s overall profitability? In examining the comparative financial statements, do these gains and losses appear to change dramatically over time? Does this appear to affect the volatility (and apparent riskiness) of Ford’s cash flow stream?

3. How much and where did Ford report the gain or loss on translation of its subsidiaries’ financial statements? From what currencies were the subsidiaries’ financial statements translated into dollars? How material are these cumulative gains or losses to Ford’s overall financial position? Do these cumulative gains or losses appear to fluctuate over time, and what impact would this have on the apparent riskiness of Ford’s cash flow stream?

4. Does Ford enter into any cash-flow hedges in an attempt to hedge its net investment in these subsidiaries? How are these reported in Ford’s financial statements? What is Ford’s reasoning for entering into such investments?