Ford Motor Company

Annual Report Project
Phase 5
ACC 3510

Group 1

Company Overview

Ford Motor Company is a global automotive industry leader based in Dearborn, Michigan; they design, develop, manufacture, service and distribute automobiles across six continents. With about 201,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. Ford Motor Company also sells cars and trucks to dealers for sale to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments.

Profitability

In recent years Ford hasn’t been a profitable company. In 2006, 2007 and 2008 Ford posted losses of $12.6 billion, $2.7 billion, and $14.7 billion respectively. From 2007 to 2008 Ford’s profit margins decreased 8.5%, and their return on assets decreased 4.7%. These factors reflect poorly on Ford’s profitability and contributed to a drastic decline in Ford’s share prices. Ford’s share prices bottomed out at a 24 year low in February of 2009 after adjusting for dividends and splits. Ford’s February 2009 share price of $1.50 hadn’t been lower since December of 1985 when the adjusted price was calculated to be $1.48.

At first glance these numbers are probably troubling to a potential investor, but further investigation into Ford’s more recent occurrences may change the investors mind. The start of 2009 looked very bad for Ford. Their stock price was at a 24 year low, they had just come off a year in which they posted a $14.7 loss, all amid the worst world economic downturn in decades. In the midst of all of the issues Ford has managed to start turning the direction of the company around in 2009. The third quarter of 2009 marked Ford’s first profitable quarter since the first quarter of 2008. Ford posted a $997 million profit in the third quarter. One of the factors associated with Ford’s ability to become... [continues]

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