Since Ford management believe that the share prices were undervalued in the past few years, the implement of VEP is an effective approach to buy back part of its outstanding stocks, which is sim-ilar to share repurchases. For Ford management and family members, they are able to strengthen their control of the company. If all the Class B shareholders retained their stocks and all the $10 billion cash was disbursed to other shareholders, the percentage of Class B share would increase from 5.8% to 7.04%, and their 40% voting power will be further consolidated.
Ford has a very strong brand name and offers wide range of cars like automobiles, commercial vehicles, luxury vehicles etc. they also target different set of customers.
Ford Motor Company is an American automobile manufacturer founded and headquartered in Dearborn, Michigan but incorporated in the state of Delaware. The company was started by Henry Ford in 1903 and is historically famous for the creation and implementation of the assembly line in manufacturing processes. Ford’s mission is to produce and sell automobiles – cars, trucks, SUVs, etc – from the ones initially designed and engineered by Henry Ford all the way through the newer versions created in the last few years. (Profitable Growth for All, 2012)
Ford Motor Company, a global automotive industry leader based in Dearborn, Michigan, manufactures or distributes automobiles across six continents. It is a publicly traded company on the New York Stock Exchange. The Company has about 198,000 employees and 90 plants worldwide with the automotive brands include Ford and Lincoln. The Company also provides financial services through Ford Motor Credit Company. The revenue of the company is $136.26 billion with a net income of $20.21 billion by 2011.
As a result, holding cash would be essential component of the firm strategy. To develop new products, buy new equipment or expand geographically, firm has to spend money on marketing research, product design, prototype development and so on. Moreover, if a recession hits and the economy start to slow down,
a) How many shares will the firm have to issue, assuming they issue the new shares at the current price per share?
In April 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to significantly recapitalize the firm's ownership structure. Ford had accumulated $23 billion in cash reserves and under the VEP would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 in either cash or additional new Ford common shares. Shareholders electing to receive cash would be taxed on these distributions at capital gain rates. Among other things, the plan provided a means for the Ford family to obtain liquidity without having to dilute their 40% voting interest (even though they own
Grant & Co., it can be justifiable that it holds large levels of inventories. However, it must have enough cash and more liquid assets to pay for its suppliers and the procurement of resources, including payment of employee salaries, operational expenses and timely dues of interests and debts. With extra cash, the company can also invest for growth and expansion of the business and can able to share the profits of the business with its shareholders through payment of dividends. Thus, a positive cash flow is usually preferable (Clarke; Kokemuller; Williams, et
K-L Fashions’ balance sheet shows a company that has tremendous opportunities for investments. Allow me to explain. Any company with lots of cash is a reassurance to investors that the company can generate revenue. Their cash flows have been $272,640 in 2005, 82,540 in 2004, however their inventory increased by 7.13%, which indicates that the cash was invested in the inventory. In 2003 it was 321,390, and lastly it was 281,750 in 2002. The Cash & Cash Equivalents is trending in the right direction. Cash is king, you can’t manipulate cash. Either is there or not. Cash helps companies survive and grow. Secondly, the Accounts Receivables is trending upward. In my opinion this shows
Ford Motor Company was incorporated in Delaware in 1919. They acquired the business of a Michigan company, also known as Ford Motor Company, which had been incorporated in 1903 to produce and sell automobiles designed and engineered by Henry Ford. They are one of the world’s largest producers of cars and trucks. They and their subsidiaries also engage in other businesses, including financing vehicles.
* 3. Executive Summary Page 1 Introduction Page X Company Description Page X Ford’s Values Page X Ford Today Page X Strategic Focus and Plan Page X Mission Page X One Team Page X One Plan Page X One Goal Page X Vision Page X Goals Page X Nonfinancial Page X Financial Page X Core Competencies Page X Situational Analysis Page X The Situational Analysis Page X
As the second largest automaker in US, Ford holds a strong position in home market. Their strong commercial vehicle sales helps generate higher revenue. Ford makes an effort to produce highly fuel efficient engines by improving existing engines rather than new hybrid engines. In result of this, the Ford Fiesta is currently ranked the lowest emitting mass produced car in Europe. In addition, Ford have a rather sound financial performance. The US government didn 't need to bailout and was the first to receive their investment status back. The firm’s profit margin is high compared to competitors with the highest liquidity ratio. When Allan Mulally implemented the “One Ford” approach, it significantly decreases costs for Ford and drives record profitability. By
There is an old saying by Earl Wilson (2015) that states “Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid-for-what-they-haves” (p. 1). This saying also applies to businesses, and investors will try to identify which category a company falls in as they conduct their research. Investors want to know they are committing their money to an organization that can effectively manage its cash. Cash is the fuel within every organization. It is extremely important for every executive, manager, and investor to understand the cash flow battle rhythm within their organization by utilizing the statement of cash flow. Analyzing the statement of cash flow, will enable investors to determine if a company is effective at managing their finances.
With operational costs diminished and product platforms truncated, Ford Motor Company now had the financial capital and bandwidth required to produce a vehicle lineup that was truly “best in class bringing about an incredible era of growth and profitability for the organization.”