Ford Motor Company : A Global Company

1573 Words Sep 21st, 2016 7 Pages
Ford Motor Company has been in business since 1902. Since that time Ford has grown into a global company in spite all of the competition. In 1987, Ford has a record profit of $4.6 billion. It was during this time that import manufacturers were starting to make their cars in North America and creating more competition in the auto industry (Holusha, 1988). It has not always been easy for the manufacturer, there have been tough times, but always seem to weather the storms. Despite these tough times, Ford Motor Company has not filed for bankruptcy, even though Henry Ford himself had twice before founding Ford Motor Company (Dunlop, n.d.). The company has continued to expand their business with new products and new auto designs.
Ford has two major segments, automotive sector and financial services sector. These are presented as two sectors to evaluate performance of each and make appropriate decisions and to have consistency in reporting. The profitability of the automotive sector is affected by wholesale unit volumes, the margin of profit for each vehicle, and the fixed costs. The fixed costs can be really affected by any variation of units of sold. If the company does not sell as many vehicles as what was planned, the fixed costs will be same, therefore will decrease the profit for Ford. If the company sells more than what was planned, this will also increase the profit, because the fixed costs will not change.
The planning assumptions for volume showed they…

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