2013 Annual Report Link: http://corporate.ford.com/doc/sr13-form-10-k.pdf View t
ID: 2459024 • Letter: 2
Question
2013 Annual Report Link:
http://corporate.ford.com/doc/sr13-form-10-k.pdf
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:
Does the company use a multiple-step or a single-step format on its income statement? Explain.
What was the net income for 2013? What was the basic net income (earnings) per common share for 2013?
What was the gross profit for 2013? For 2012?
How much interest expense was incurred in 2013? In 2012?
What was the amount of income before income taxes for 2013? For 2012?
Explanation / Answer
1. The company use a multiple-step format on its income statement.
Multiple step format : Unlike single-step income statements, a multiple-step income statement offers detailed information about the gross profit and operating profit of a company. Operating sections of the statement generally involve revenues and expenses, while nonoperating sections detail the gains and losses of indirect activity. The company's specific sources of revenue and expense are itemized and presented as different line items, making it easier for investors to digest performance and evaluate financial health. The obvious trade-off to presenting detailed accounting is that it is more complicated and time-consuming to put together. Accountants record every transaction separately and maintain a vigilant segregation of revenue or expense types.
2. The net income for 2013 was $7155 millions. The basic net income (earnings) per common share for 2013 was $1.82.
3. The gross profit for 2013 was $18823 million and for 2012 was $17452 million.
4. Interest expense incurred in 2013 was $829 millions and in 2012 was $ 713 million.
5. The amount of income before income taxes for 2013 was $7001 million and for 2012 was $7720 million.
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