Final Project Milestone Three JR PDF

Preview

Summary

Milestone Three...

Description

1

Ford Motor Company Milestone Three

Ford Motor Company Milestone Three Joshua Ruzinsky Southern New Hampshire University

Reviewing Ford Motor Company financials, starting with 2017 for this report. From 2017 the cost of goods sold had an increase (4.06%) from 2016, 2018 had an increase in cost for goods sold by 3.77%, from 2019 to beginning of 2020 Ford had a decrease in cost of goods sold starting with a minor 1.16% in 2018, March 2020 looking back 12 months providing a decline of 2.37% looking from a year back standpoint. From 2020 for the ending of the first quarter cost was $30,522 Million. This came with a 10.08% decline.

Reviewing the chart below helps show the trends that was seen over the past 12 years. The annual report for cost of goods sold shows back in 2007 when the Great recession started shows the cost of goods was $142,587 Million. As the recession hit automakers had to cut cost and shut down select models to try and survive the bad economy, doing so helped bring cost down and brought the cost of goods sold to $134,693 Million in 2019.

Reviewing Ford Motor Companies earnings presentation breaks down the cost and trends that Ford experiences. Ford experienced increased cost due to higher material cost in 2019. With steel

2

on the rise at 9% over the last year and the F-150 being made out of aluminum to help provide better fuel economy, Ford is experiencing higher aluminum cost. Aluminum has been on the rise and with Ford seeing a 20% increase in material cost this hurts the bottom line. The good news for Ford is the structural side has been flat with no issues.

https://www.macrotrends.net/stocks/charts/F/ford-motor/cost-goods-sold

3

Fords market share is doing well, with Ford Motor Company coming in 3rd for 2019 at 14.44% just under Toyota (14.63%), General Motors just above 17% and coming out on top. Reviewing 2017 and 2016 market share I see a slight difference .2-.3 increase. To me this means Ford’s position in the market share is very competitive and will continue to be positioned towards the top of the market share.

https://autotechio.com/top-10-car-brands-in-usa/

When a new automotive manufacturer considers opening a business many things are to consider. Cost to make a vehicle and research and development. Creating a vehicle or multiple models, the cost to manufacture the components, and can you mass produce the components to bring down

4

the cost? Research and development are the key to success, trial and error. Months and years are put into testing of motors, transmissions and any new components that would be offered to the public. Ford has a good amount of R&D with new vehicles soon to be released including the Mustang Mach-E, Bronco, and a small off-road SUV to soon be released.

Reviewing Fords annual report provides plenty of information showing the Ford’s portfolio is expanding into all markets to stay competitive while increasing long term capital into a changing electric car future. Ford expects to see the change financially starting 2021 when the new models are released. While Ford has good cash flow, loans are being used right now to get through the pandemic and keep things moving until automakers can find the new normal for producing vehicles like they did before the pandemic. Based on the information provided I think Ford is in great shape due to already investing in the future and expect to release the new models within a year, once this happens Ford will start to see the return on the investment and continue to invest in the electric vehicles, keeping Ford up to date in the changing automotive world....