Before we start the analysis lets define what we’re looking at, We are looking at what impact the trend towards smart cars had, for Ford in the UK. The problem with this is that Ford has chosen not to release an annual budget for every country but instead an overall annual report for the company as a whole. We can argue though, that the change in trend in the UK will have a greater impact than just for the UK operations more so it would translate into the major financial picture. If we furthermore look across the pond to the US we see an increase of people changing buying behavior towards the smaller cars.
It has been a few harsh years for the Car industry; all over the place we have seen companies shutting down factories, moving them to other/cheaper countries , being bought out or up by other people, or being bailed out by the government. The recession might be the biggest factor here, but also what changed when it came into effect, bigger, more luxurious cars were not bought in the same amount anymore. The trend shifted towards smaller, more compact cars, more eco-friendly cars. As a result we saw a massive increase in smaller cars sold all over the world. But what has changed for Ford? If we look just 10 years back, and then go forward to today; we see an increase in the production of small cars from 29% to 48% and if we look towards the Economics part of this we see a company which does have fairly stable economy, the Revenues have continued to be within the same area meaning they might’ve not grow much, but they have kept up with their previous years. But if we look at their Liabilities, both short term and the long term we can see a massive decrease in these, Ford went from a massive 232 Million us dollars liability count, down to 163 million us dollars, so what does this mean? This fact lined up with their cash flow, which has gone from 15 mill dollars deficit, to 20 mill dollars positive. They are making money, they are...
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