COMPANY ANALYSIS #2

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University of Texas, Permian Basin *

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6301

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Accounting

Date

Feb 20, 2024

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docx

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12

Uploaded by CaptainRaccoon3590

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GENERAL MOTORS CO. AND FORD MOTORS CO. COM PANY ANAL YSIS 2
Janeth Kiongozi, Lathaniel Bastin | ACCOUNTING ANALYSIS 6301.501 FALL 2023 1. Mission Statements 1. Mission statements. General Motor Co.’s Mission Statement: “To earn customers for life by building brands that inspire passion and loyalty through not only breakthrough technologies but also by serving and improving the communities in which we live and work around the world.” This mission statement shows GM’s holistic approach to addressing external factors that influence the business. The main points of General Motors’ corporate mission statement are as follows: 1. Earning customers for life 2. Brands that inspire passion and loyalty 3. Breakthrough technologies 4. Serving and improving communities General Motor Co.’s vision for the future is a world with zero crashes, zero emissions and zero congestion, which guides our growth-focused strategy to invest in electric vehicles (EVs) and autonomous vehicles (AVs), software-enabled services and subscriptions and new business opportunities, while strengthening our market position in profitable internal combustion engine (ICE) vehicles, such as trucks and sport utility vehicles (SUVs). Janeth Kiongozi, Lathaniel Bastin | ACCOUNTING ANALYSIS 6301.501 FALL 2023
Ford Motor Co.’s Mission Statement: “To help build a better world, where every person is free to move and pursue their dreams.” Ford Motor Co. is committed to making this purpose evident in every part of our business, from the way we source our materials, to the vehicles we create, to the services we provide, to the interactions we have with our customers, employees, and communities. Our purpose has set us apart as a company for more than a century and it guides our vision for the future. They aim to shorten the distance between where you are and where you want to go, connect people down the road and over the horizon, discover possibilities, and enjoy the thrill, adventure, and pride of moving freely. Ford+ is our plan for growth and value creation, intended to transform our company to win in this new era of electric and connected vehicles by developing always-on customer relationships, must-have connected products and services, and by leading the electric vehicle revolution. Ford+ serves as our roadmap for the next 10-15 years as we move with speed and ambition to fulfill our purpose. Source: Sec fillings and google. In summary: Both companies emphasize customer-centricity and a commitment to improving the world in their mission statements. Also, both companies aim to contribute positively to society and have clear strategies for the future, with GM's vision placing a strong emphasis on zero crashes, emissions, and congestion, while Ford outlines its Ford+ plan for growth and innovation in the era of electric and connected vehicles. 2. Financial Data Income Statement ( USD in Millions.) GENERAL MOTORS CO. FORD MOTORS CO. Total Revenue 156,735 158,057 Gross Profit 29,843 23,660 Net Income 9,708 (2,152) Cost of goods sold (COGS) 126,892 134,397 Balance Sheet (USD in Millions) GENERAL MOTOR CO. FORD MOTOR CO. Total Assets at the end of the year $ 264,037 $ 255,884 Total Assets at the beginning of the year $ 244,718 $ 257,035
Total Liabilities $ 192,110 $ 212,717 Stockholders’ Equity $ 71,927 $ 43,167 Total Cash $ 19,153 $ 25,134 Net Property, Plant, Equipment at the end of the year $ 45,248 $ 37,265 Net Property, Plant, Equipment at the beginning of the year $ 41,115 $ 37,139 Statement of Cash Flow ( USD in Millions) GENERAL MOTORS CO. FORD MOTOR CO. Operating Cash Flows 16,043 6,853 Investing Cash Flows (17,882) (4,347) Financing Cash Flows 383 2,511 Total Cash 21,948 25,340 Cash at the beginning of the period 23,542 20,737 Discussion: Does the Total Cash in the Statement of Cash Flow matches the Cash amount in Balance Sheet? If not, why? The total cash in the statement of cash flow differs from total cash in the balance sheet because the statement of cash flow includes both unrestricted and restricted cash, while the balance sheet may only reflect movement in unrestricted cash. Restricted cash refers to funds that are set aside for a specific purpose, such as collateral for a loan or legal requirements. Unrestricted cash refers to cash that’s readily available to be spent for any purpose and has not been pledged as collateral for a debt or other purpose. Restricted cash is not readily available for general use by the company, and therefore, it is not included in the cash flow statement. However, it is included in the cash and cash equivalent line item on the balance sheet because it is still part of the company’s overall cash position. Example in the data given for Ford motors co. in statement of cash bellow after the cash from beginning of the year there is a column for cash, cash equivalents, restricted cash and restricted cash equivalents, period increase(decrease), including exchange rate effect which amount $4,603,000,000.
3. Selected Ratios The ratios that we selected are as follows: GROSS PROFIT MARGIN (value in USD Million) General Motor Co. gross profit margin Gross profit Margin= revenue cost of goods sold revenue *100 Gross Profit Margin= $ 156,735 $ 126,892 $ 156,735 *100 The gross profit margin for General Motors Co. is 0.190404185 19.04% Ford Motors Co. gross profit margin Gross profit Margin= revenue cost of goods sold revenue *100 Gross Profit Margin= $ 158,057 $ 134,397 $ 158,057 *100 The gross profit margin for Ford Motors Co. is 0.149692832 14.97% RETURN ON ASSETS (value in USD Million) General Motor Co. ROA Return on Asset (ROA)= Net income Average asset Return on Asset (ROA)= Profit margin* Asset turnover Return on Asset (ROA)= net income sales * sales average asset Return on Asset (ROA)= $ 9,708 $ 156,735 * $ 156,735 $ 264,037 + $ 244,718 2
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