View the 2013 Annual Report for the Ford Motor Company, a Fortune 50 company, li
ID: 2415816 • Letter: V
Question
View the 2013 Annual Report for the Ford Motor Company, a Fortune 50 company, linked here as well as on the Course Information page. Using this report, answer the following questions:
portal.csuglobal.edu/fileman/files/schoology/courses/content/ACT350/winter2014a/courseFiles/2013-Ford_AnnualReport_Portfolio.pdf
or
http://corporate.ford.com/doc/sr13-form-10-k.pdf
Show calculations:
Which inventory method(s) does the company use? Explain why you think the company selected this method(s).
Compute the inventory turnover ratio for 2013 and 2012 using the ending inventory instead of the average inventory. What is your evaluation of the difference?
What was the total amount of inventories on December 31, 2013 and 2012? What were the principal categories of inventory on these dates?
Why does the company amortize some of its intangible assets but not others?
Do you think that the company has additional “intangibles” that are not recorded on the balance sheet? Why? How would this issue affect your understanding of the company’s financial performance?
Explanation / Answer
1.Income before taxes for 2013 is 7001 millions and for 2012 is 5664 million.
2.
Total revenue 35575 million
Income before income taxes = 1728 millions
3.
Accrues expenses = 262 million
4. yes, there are intangibles which are not shown in the balance sheet. following are the resaons behind this:
a) many intangibles (such as employees and relationships) are not owned by the company in the first place whereas the acounting standardsallows only for the owned assets.
b) The dollar value of intangibles can be difficult to identify since there is no financial transaction creating them.
this affects the performance as these intangibles are recorded as expenses which reduces the netincome of the company.
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