Case Study : Ford Motor Company

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The company our group chose to analyze was Ford Motor Company. They are based out of Michigan with 181,000 employees and 65 plants worldwide. They currently sell on six continents and sold 2,493,918 vehicles in 2013. The Ford Motor Company Brand also includes Lincoln but it is only sold in North America. There are many risk factors currently for the company, but a main one is the high fixed structural cost they have in place that are easily susceptible to losses in a turn down of the economy. Another risk factor facing Ford Motor Company and the automotive industry is the rising of gas prices. This can have a big impact on Ford because of their high percentage of sales of trucks and other vehicles with poor gas mileage. These increases in gas prices have led to the company to currently having 6 electrified cars on the road. This is good for their future prospects since they will have a wider range of fuel-efficient cars for consumers to choose from. Ford Motor Company currently makes its revenue through the operating activities, which include the sale of vehicles, service parts, and accessories. The Ford Motor Company records revenue when all risks and rewards of ownership have been transferred to the customer, which is usually a dealership. However, this is not the case with rental car companies that get a repurchase option. The vehicles sold to the rental companies are actually recorded in operating leases, with the revenue from the lease accruing over the term

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