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Accounting And Finance Case Study: Ford Motor Company

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Program Bachelor of Arts (Honors) in Accounting and Finance N401 Module Financial Strategy 6AG522 Student Name Khaled Sweelat Student ID 058002581 Ford Motor Company Income Statement For the year ended 31st December 2000 (All values are in Million $) Total revenue 170,064 Less: Cost of revenue (126,120) Gross profit 43,944 Selling, general and administrative expenses 14,855 Other operating expenses 11,371 (26,226) Operating income 17,718 Other income and net expenses 1,418 Earnings before interest and taxes 19,136 Interest expense (10,902) Income before tax 8,234 Income …show more content…

According to bellow fund statement of Ford Motor Company during the year ended 31st December 2000, Company has funded $ 140,933 Mn through short term funds of $ 15,764 Mn and long term funds of $ 125,169. The company has utilized $ 132,004 Mn of those funds to invest in short term investments and $ 8,929 Mn invested in long term investments. Therefore, company has funded short term investments through long term sources of funds. If we further analyze the main contributing items for this situation it is clear that investment in Noncurrent assets has been reduced (a long term source) to fund debtors/ accounts receivable (a short term investment). For this purpose company has sold $ 110,722 Mn of Long Term investments during the year 2000. Therefore, it is clear that company has not applied the matching principle. Ford Motor Company Fund Statement for the year ended 31st December2000 (All values are in Million

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