University of Education

Multan Campus
Department of Economics and Business Administration

Project Report
Ford Motor Company

Submitted by;
Noman, Jaweria and Hira
Section : BBA(A)

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 Dedication
We dedicate our project to humanity and to people

who have served or are serving humanity, because

without humanity we are like body without souls.

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 Acknowledgement
We are thankful to sir Asif for his guidance. We are also thankful
to our family and friends for their support and help.

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Executive Summary
The summary of our assignment is that we have looked how Ford is utilizing its resources and
technology and how it is performing its responsibilities. We have also looked how Ford is
affected by business environment, economic growth, inflation and foreign characteristics. How
it is doing and taking advantage of international business and what are barriers for Ford to
international business and benefits for Ford of barriers reduction to international business are
also the part of our assignment. In short, we have analyzed the company performance of Ford
and the result of our analysis is that Ford is earning very less profit because of various reasons.
We have also recommended how Ford can improve its performance.

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Table of Contents

Topic Name Page Number

Introduction 7

Resources 8

Technology 9

Key Stake Holders of Company 10

Spreading Ownership 11

Effect of Business Environment 11

Company Responsibility 12

Company Responsibility towards 14

International Community
Company Responsibility towards 14
International Environment
Impact of Economic Growth on Business 15
Performance
Impact of Inflation on Business Performance 15

Change in Price of Products 16

Government Influence on Company 17

Performance
Starting International Business 17

Benefits of International Business 18

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Barriers to International Business 19

Benefits of Barriers Reduction 20

Affect of Foreign Characteristics on 20

International Business
Form of Business Ownership 22

Company Performance 24

Conclusion 29

Recommendation 30

References and Sources 31

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 Ford Motor Company

Introduction to Business
Ford Motor Company, commonly known as Ford, is an American multinational automaker that
has its main headquarters in Dearborn, Michigan, a suburb of Detroit. It was founded by Henry
Ford and incorporated on June 16, 1903. Ford Motor Company one of the largest and most
profitable companies in the world, as well as being one of the few to survive the Great
Depression. The largest family-controlled company in the world, the Ford Motor Company has
been in continuous family control for over 110 years.

❖ History
Henry Ford built his first experimental car in a workshop behind his home in Detroit in
1896. After formation of the Ford Motor Company, the first Ford car was assembled at
the Mack Avenue plant in July 1903. Five years later, in 1908, the highly
successful Model T was introduced. Demand for this car was so great that Ford
developed new mass production methods in order to manufacture it in sufficient
quantities. In this way, Ford continued to expand its business and the company’s first
international sales branch was opened in Paris in 1908.
In 1919 the company was reincorporated, with Ford, his wife, Clara, and his son, Edsel,
acquiring full ownership; they, their heirs, and the Ford Foundation were sole
stockholders until January 1956, when public sale of the common stock was first
offered.

❖ Product and Services

The Company’s business includes designing, manufacturing, marketing, and servicing a
full line of Ford cars, trucks, and sport utility vehicles.

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Resources
Ford is utilizing following resources to produce its products;
❖ Natural Resources
Natural resources include any resources that can be used in their natural form.
The most obvious natural resource that is commonly used by businesses to produce
products or services is land. Businesses rely on land to establish a site for their
production
Ford is also utilizing land as natural resource. Ford has almost more than 65
manufacturing plants worldwide including in the United States, Canada, Mexico, China,
the United Kingdom, Germany, Turkey, Brazil, Argentina, Australia, and South Africa.
Ford has also manufacturing plants in developing countries like India where the cost of
land is much less as compared to developed countries which decreases the expenses for
doing business and results in higher profit.
❖ Human Resource Management
Human resource management is the strategic approach to the effective management of
people in a company or organization.
Ford is excellently utilizing its human resource management.
Following are the main focuses of human resources management of Ford;
• Customer Relationships
Ford human resource management is focusing on the good customer
relationship with Ford employees. For this purpose Ford tries its best to
satisfy its customers by operating a website at www.ford.com – as well as
numerous international domains such as www.ford.com.ph and
www.ford.co.uk – through which customers are able to browse the
Company’s portfolio of vehicles and find information of its network of
dealerships.
• Employees Training
Ford human resource strategic plan is based on retention and hiring,
employee training, employee motivation and heal and safety for its
employees. The company’s retention and hiring plan is to employ innovative
and customer centric minds while retaining and promoting those who are
skilled. Ford also hires people from different backgrounds with different
experiences and opinions with an aim of building a collaborative workplace.

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 ❖ Capital
Ford is utilizing its capital very effectively by the following ways;
• Research and Development
Ford is spending its capital on research and development to increase the
quality of its product.
• Technology
Ford is spending money on technology for the innovation of its products and
for the efficiency of its business operations. Ford is also using technology to
communicate with its customers for making them satisfy and for the
advertisement of its products.
• Training Employees
Ford is spending its money on motivating, training and making customer
centric minds of employees.

❖ Entrepreneurship
Entrepreneurship involves the creation of business and the willingness to accept risk.
Entrepreneurs are those who attempt to identify business opportunities.
The entrepreneur of Ford Motor Company was Henry Ford who fond the opportunity to
create an automobile company because he knew that there are only few competitors.
While working as an engineer for the Edison Illuminating Company in Detroit, Henry
Ford (1863-1947) built his first gasoline-powered horseless carriage, the Quadricycle, in
the shed behind his home. In 1903, he established the Ford Motor Company, and five
years later the company rolled out the first Model T.

Technology
Ford is getting benefit from technology in the following ways;
❖ Employees Training
Ford is training its employees both hardware and software knowledge to enable the
company grow with technology.
❖ Research and Development
The Ford research lab has conducted research on computational intelligence for more
than 20 years. About 15 years ago the company introduced an innovative misfire
detection system _ one of the first large scale industrial applications of neural
networks.

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 ❖ Manufacturing Process and Operations
Ford uses artificial intelligence to automate quality assurance as well; AI can detect
wrinkles in car seats. In addition, neural networks help support Ford’s supply chain
through inventory and resource management.
❖ Innovative Products
Ford is using artificial intelligence for the innovation of its products. Many of the AI
applications of Ford interact directly with the drivers to monitor acceleration or
braking, help improve fuel efficiency and the driver’s preferences for seat position,
climate control, and infotainment.
But except of use of technology in recent years Ford has recalled almost 2.5 million vehicles, in
north America to fix faulty door latches and potentially dangerous brake risk, which shows that
there is still more need of utilizing technology effectively to improve quality of products.

Key Stake Holders of Company

Following are the key stock holders of company;
❖ Shareholders
A shareholder is an individual person or corporate body that holds shares in a company
limited by shares.
The top shareholders of Ford are William Clay Ford, James D. Farley, James P. Hackett,
Vanguard Group Inc., BlackRock Inc. (BLK), and Newport Trust Co.
❖ Creditors
A creditor is an individual or business that has lent funds to a business and is owed
money.
The total debt of Ford was almost 162 billion U.S dollars in 2020.
❖ Employees
An employee is an individual who is hired by an employer to do a specific job.
The total employees of Ford are 190,000.
❖ Suppliers
A supplier is an entity that supplies goods and services to another organization.
Some of the key suppliers for Ford Motor Company include Flex-N-Gate Seeburn, NHK
Spring, and Valeo Electric and Electronic Systems. Ford obtains the majority of its parts
from just around 100 suppliers.
❖ Customers
A person who buys goods or services.
As Ford Motor Company is working in more than 200 countries so it have wide range of
customers.

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Spreading of Ownership
Ford Motor Company, American automotive corporation founded in 1903 by Henry Ford
and 11 associate investors. In 1919 the company was reincorporated, with Ford, his wife, Clara,
and his son, Edsel, acquiring full ownership; they, their heirs, and the Ford Foundation were
sole stockholders until January 1956, when public sale of the common stock was first offered. In
1956, the Ford Foundation agreed to sell 10.2 million units of stock at $63 per share. While in 2019
the total shares of Ford were 4,004 millions.

Effect of Business Environment

The effect of different segments of business environment on Ford is as follows;

❖ Political Environment
The international political scenario provides both threats as well as opportunities for
Ford. On one hand, political instability in the European Union, especially Brexit, can
result in a negative impact on Ford’s performance in these markets. In case of a “hard”
Brexit the UK stands to lose access to free trade agreements with other European
countries. This may result in a marked reduction of demand in that market. Coupled
with increased tariffs on imports/exports together with delays at the UK border, the
European political playing field may prove to be a cause for concern.
On the other hand, free trade agreements and government incentives in the emerging
markets provide ample opportunities for growth. Governments in markets of South
America and Asia, where demand for automobiles is projected to increase, are actively
supporting companies who bring technological innovation and economic growth. For
example, Ford’s registration numbers in the Brazilian market rose by 11% in 2019. These
encouraging factors provide ample growth opportunities to Ford.
❖ Economic Environment
Recent times have witnessed a global slump in the number of car sales all over the
world. Along with the US, which accounts for the largest market share in case of Ford,
even developing markets such as India have witnessed a downturn in the number of
vehicles being sold. This is poised to be one of the significant factors that may be
pushing the world economy towards another recession.
With the dollar getting stronger, this translates to customers paying more in their
respective currencies. Also must be taken into account the fact that emerging players in
Asia still offer a sizable demand for reliable vehicles which Ford is in a position to fulfill.

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 Open trade agreements between emerging economies hold promise of greater sales,
though it carries the risk of increased competitions and future market saturation as well.

❖ Social Environment
Consumers today are literally inundated with choices when it comes to the automobile
sector. With multiple players and a near-saturated market, Ford may find it difficult to
attract buyers. There is opportunity, however, in the Electric and Hybrid vehicle
category. Globally, demands for hybrid cars have been on the rise, and Ford has already
taken steps to introduce variants in this category. With rising interest in eco-friendly and
fuel-efficient cars, Ford can position itself as a major player in the hybrid car segment.
❖ Global Environment
The global demand is shifting towards environment-friendly cars, especially electric and
hybrid vehicles that have little to no emissions and environmental impact. Ford has
already made significant headway in this respect with the Focus Electric and Fusion
Hybrid models. The company is certainly focusing on this emerging segment as it holds
potential for growth.

Company Responsibility
Following are the responsibilities of company;
❖ Responsibility towards Customers
Ford’s top-priority stakeholders are its customers. The interests of this stakeholder
group are high quality products and services, especially after-sales services. Customers
are significant stakeholders because they directly determine the company’s revenues.
Ford’s corporate social responsibility efforts for this stakeholder group are as follows:

• Product innovation for quality, fuel economy, and safety

• Ford Smart Mobility
• Ford Driving Skills for Life program

❖ Responsibility towards Employees

Ford considers its employees as second-level priority stakeholders. This stakeholder
group is interested in career development, high wages, and equal treatment and
opportunities. Employees are significant stakeholders because they influence the
production and service capacity of the business. For instance, even a small decline in
this stakeholder group leads to a proportionate decline in the company’s productivity
and performance.

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 To address the interests of employees as stakeholders, Ford has the following corporate
social responsibility initiatives:

• Sustainable Workforce
• Product Online Training
• Global Learning and Development
• Global leadership development programs

❖ Responsibility towards Investors

Like all investors Ford Motor Company’s investors are also interested in maximum
profits and business stability. These stakeholders are significant because they affect the
firm’s capital. To address the interests of this stakeholder group, Ford implemented the
One Ford plan in 2008 under former CEO Alan Mulally’s leadership to satisfy investors.
The main points of One Ford plan to satisfy investors are as follows;

• Reducing Costs
• Maximizing Profit

❖ Responsibility towards Community

Ford has a number of major corporate social responsibility programs for communities as
stakeholders. The interests of this stakeholder group include support for community
development, as well as environmental conservation. Communities are significant
stakeholders because they can influence the perceptions of Ford’s customers. These
interests are addressed by Ford through the following corporate social responsibility
programs at the company:

• Supplier sustainability training

• Ford Motor Company Fund and Community Services
• Ford Volunteer Corps
• Ford Driving Skills for Life program

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Company Responsibility towards International Community
As Ford Motor Company has its branches in almost 200 countries, therefore Ford is also
fulfilling its responsibilities on international level.
Following are the responsibilities towards communities that the Ford is focusing on
international level;

❖ Education
Education is the foundation for success. It is key to making lives better, creating social
change and building sustainable communities. Ford works with communities around the
world to drive sustainable innovation in education.

❖ Community Life
To help strengthen the communities in which we operate has always been a core
priority for Ford. Around the world, the company’s efforts to improve community life
include hunger relief, poverty alleviation, and environmental initiatives like water
conservation.
❖ Focus on Health Care
Ford has been named as the largest Voluntary Blood Donor successively for 19
consecutive years across its manufacturing and IT operations. Our employees team up
with NGOs like the Red Cross for conducting blood donation camps and safety
campaigns.
❖ Driving Volunteerism
Ford employees continuously works for the benefits of the marginalized sections that
may include orphans, malnourished and underprivileged communities. It is done
through collaboration with NGOs at several levels.

Responsibility towards International Environment

Ford is performing its responsibility towards International environment by the following
ways;
❖ Water Security
Ford is one of fewer than 30 companies globally to be awarded an A for water security,
in recognition of its efforts to manage water sustainably. Since 2000, the company has
worked to conserve water through its global water initiative and has reduced
operational water use by 62.5 percent, saving 10.4 billion gallons of water. Ford is on
track to achieve its goal of reducing water use by nearly three-fourths by 2020, with a
long-term goal of using zero drinkable water in its vehicle manufacturing processes

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 ❖ Effort on Climate Change
Ford received an A- for its climate change efforts for the third year in a row. As part of
the company’s commitment to deliver on its share of CO2 reductions consistent with
the Paris Climate Accord, Ford is investing $11 billion to introduce 16 fully electric
vehicles within a global portfolio of 40 electrified vehicles through 2022. Additionally, in
2017 Ford achieved its goal to reduce the company’s global carbon dioxide emissions
from manufacturing operations by 30 percent per vehicle.

Impact of Economic Growth on Business Performance

Following are the two types of economic growth;
❖ Strong Economic Growth
When economic growth of a country is stronger than normal, the total income level of
all country workers is relatively high, so there is a higher volume of spending on
products and services. Since the demand for products and services is high, firms that sell
products and services should generate higher revenue.
So, in strong economic growth the profit of Ford is higher because of higher revenue
due to high demand of cars because of high income level of customers.

❖ Weak Economic Growth

In weak economic growth the total income of a country is less than normal, so there is
less volume of spending on products and services. Since the demand for products and
services is low, firms that sell products and services generate lower revenue.
So, in weak economic growth the profit of Ford is lower because of lower revenue due
to low demand of cars because of low income level of customers.

Impact of Inflation on Business Performance

Inflation is the increase in the general level of prices of products and services over a
specified period of time.
Following are the two types of Inflation;
❖ Cost-Push Inflation
When firms charge higher prices due to higher costs, cost-push Inflation occurs.
When consumers pay higher prices for products as a result of Inflation, they have less
money available to buy other products. Alternatively, they may be forced to reduce

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 their spending on other products, which causes the demand for those products to
decline. Consequently firms will experience a lower level of revenue.
So, during cost-push Inflation the profit of Ford will be less due to lower revenue.

❖ Demand-Pull Inflation
When prices of products and services are pulled up because of strong consumer
demand, demand pull inflation occurs.
In strong economic growth, strong consumer demand can cause shortages in the
production of some products. Firms that anticipate shortages may raise prices because
they are confident they can sell the products anyway. So, in demand-pull inflation the
profit of companies increases.
So, during demand pull inflation the profit of Ford will be higher because of higher
prices of products due to strong customer demand.

Change in Price of Products

The interaction between demand and supply determines the price of the product.

• Demand Schedule for a Product

Demand schedule indicates the quantity of the product that would be demanded at
each possible price.

• Supply Schedule for a Product

Supply schedule indicates the quantity of the product that would be produced by firm at
each possible price.

❖ Interaction of Demand and Supply

At relatively high prices of products , the quantity supplied by firms exceeds the quantity
demanded by customers, resulting in a so-called surplus of products.
At relatively low prices, the quantity supplied by firms will be less than the quantity
demanded by customers, resulting in a so-called shortage of products.
The price at which the quantity of a product supplied by firms equals the quantity of the
product demanded by customers is called the equilibrium price.
Usually the market price of a product is the equilibrium price of that product.

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Government Influence on Company Performance
To influence economic conditions, the federal government implements monetary and fiscal
policies which influences on company performance.
❖ Monetary Policy
In monetary policy federal government adjusts interests rates.
When federal government reduces interest rates, the money supply increases, so the
income level of customers increases which results in higher demand of products.
Therefore, when interests rates are low the revenue of Company increases which results
in higher profit.
So, the profit of Ford will be higher when the interests rates are low.
When federal government increases interests rates, the money supply decreases, so the
income level of customers also decreases which results in lower demand of products.
Therefore, when interests rates are high the revenue of Company decreases which
results in lower profit.
So, the profit of Ford will be lower when the interests rates are high.

❖ Fiscal Policy
In fiscal policy government decides how to set tax rates and spend money.
When fiscal policy reduces income tax rates, people would have higher after-tax
incomes. Which encourage them to spend more money, thus the demand of products
and services increases. As a result revenue of businesses increases.
So, when the taxes are low the profit of Ford will be more because of higher revenue.
When fiscal policy increases income tax rates, people would have lower after-tax
incomes. Which discourage them to spend more money, thus the demand of products
and services decreases. As a result revenue of businesses decreases.
So, when the taxes are high the profit of Ford will be less because of lower revenue.

Starting International Business

The company’s first international sales branch opened in Paris in 1908. By mid-1914
there were more than 500,000 Model Ts on the roads of the world; by 1923 the company was
producing more than half of America’s automobiles; and, by the end of the 1920s, Ford had
more than 20 overseas assembly plants in Europe, Latin America, Canada, Asia, South Africa,
and Australia.
Ford India Private Limited began production in 1926 as a subsidiary of the Ford Motor
Company of Canada, but was shut down in 1954 as the company was in loss. Ford re-entered

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the market in October 1995 as Mahindra Ford India Limited (MFIL), a 50-50 joint venture with
Mahindra & Mahindra Limited.
Ford formed its first passenger-vehicle joint venture in China in 2001, six years behind
GM and more than a decade after VW. It has spent as of 2013 $4.9 billion to expand its lineup
and double production capacity in China to 600,000 vehicles.

Benefit of International Business

As Ford is working in more than 200 countries so it is taking the advantages of international
business. Following are the benefits of International Business from which Ford is taking
benefits;
❖ Increased Revenues
One of the top advantages of international trade is that businesses may be able to
increase their number of potential clients. Each country business add to list can open up
a new pathway to business growth and increased revenues.
Except of doing business in many countries Ford is still trying to expand its business in
more countries to increase its revenue.
❖ Better Risk Management
Focusing only on the domestic market may expose you to increased risk from downturns
in the economy, political factors, environmental events and other risk factors. Becoming
less dependent on a single market may help you mitigate potential risks in your core
market.
As Ford is working in many countries, so if due to any reason the demand of Ford
product decreases in some countries than it can rely on other countries for its profit,
which reduces the risk of loss for Ford.
❖ Benefiting from Currency Exchange
Those who add international trade to their portfolio may also benefit from currency
fluctuations.
For example, for a U.S company when the U.S. dollar is down, the company may be able
to export more as foreign customers benefit from the favorable currency exchange rate
which increases the company revenue, thus company profit also increases.
Ford can also get benefit from currency exchange as it is doing international business.
❖ Enhanced Reputation
Doing business in other countries can boost your company’s reputation. Successes in
one country can influence success in other adjacent countries, which can raise your
company’s profile in your market niche.

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 As Ford was successfully doing business in America, so when Ford entered in
international business due to good reputation in America Ford was able to attract strong
customer demand in other countries too.
❖ Capitalize on Technology
Capitalize on technology means to take advantage of technology.
Many firms of developed countries have established businesses in developing countries
which have relatively low level of technology. Because when firms introduce technology
which is new for developing countries their people are attracted towards that product,
so the demand of that product increases which results in higher revenue.
Ford have attempted to capitalize on their technological advantages by establishing
plants in developing countries throughout Asia, Latin America and eastern Europe.

Barriers to International Business

As Ford is doing international business, barriers to international business is a problem for
Ford and for all other firms that are doing international business. Following are the barriers to
international businesses;

❖ Natural Barriers
Following are the natural barriers to international businesses;
• Distance
• Different way of thinking of people
• Language
❖ Barriers to Protect Local Firms
Following are the two types of barriers Imposed by government to protect local firms;
• Tariff
Tariff is a tax or duty to be paid on a particular class of imports or exports.
Tariff increases the costs of businesses which reduces revenue of firms involved
in international business.
• Quota
Government limits the amount of specific products that can be imported, which
is known as quota.
Due to quota less products of a company are sold which reduces the company
revenue, resulting in less profit for businesses involve in international
businesses.

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 ❖ Barriers to Punish Countries
Trade barriers can be imposed on countries that do not enforce environmental laws or
child labor laws, or initiate war against another country, or are unwilling to participate in
a war against an unlawful dictator of another country.
Firms of those countries on which trade barriers are imposed can not do business in
other countries and other countries firms can not do business in country on which trade
barriers are imposed.

Benefits of Barriers Reduction

Following are the benefits of barriers reduction to international business;
❖ Benefit to Firms
Due to barrier reduction, Ford and other firms now have more freedom to establish
subsidiaries or to acquire existing companies in other countries. This is an opportunity
for them to expand their business and to attract foreign demand, which will result in
higher revenue and automatically resulting in higher profit for them.
❖ Benefit from Consumers
As barrier reduction to international business increases competition among businesses
which results in lower price of products and services. So, in this way barrier reduction to
international business is also beneficial for consumers.
❖ Benefit to Government
Benefit to government of barrier reduction to international business is that some
governments recognize that foreign ownership of local facilities could benefit the
economy by creating jobs.

Affect of Foreign Characteristics on International Business

Following are the foreign characteristics that affect the international business of Ford;
❖ Economic System
Ford must recognize the type of economic system used in any country where it
considered doing business.
Following are the three types of economic systems;
• Capitalism
Capitalism allows for private ownership of businesses. Entrepreneurs have the
freedom to create businesses that they believe will serve the people’s need. In a
capitalist society, entrepreneurs desire to earn profits motivates them to
produce products and services that satisfy customers. Firms can normally enter
capitalist countries without any excessive restrictions by the government’s.

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 So, for Ford and firms capitalist economic systems are most suitable for doing
international business.
• Communism
Communism is an economic system that involves public ownership of
businesses. In a purely communist system, entrepreneurs are restricted from
capitalizing on the perceived needs of the people. The government decides what
products will be produced and in what quantity.
So, Ford and firms are not attracted towards countries having communist
system of economy.
• Socialism
Socialism is an economic system that contains some features of both capitalism
and communism. A socialist society may discourage not only the establishment
of new businesses but also the desire to work.
So, Ford and firms are also not usually attracted towards countries having
socialistic economy.

❖ Economic Conditions
To predict demand for its product in a foreign country, a firm must attempt to forecast
the economic conditions in that country.
Because in strong economic conditions the demand of the products will be high while in
weak economic conditions the demand of the products will be low.
As, firm will produce products according to the estimate of future economic condition of
a country, so firm must forecast the economic condition precisely.
Ford also enters in countries for doing international business after predicting and
analyzing the economic system of that country.
❖ Exchange Rates
Exchange rate is the value of one currency for the purpose of conversion to another
currency.
Countries generally have their own currency. Exchange rates between the currency of
countries fluctuate over time. When a country’s currency weakens, foreign currencies
strengthen; thus, the firms who’s country currency weakens need more currency of its
country to purchase a given amount of foreign supplies which increases the company
expenses resulting in decrease revenue of the firm.
So, exchange rates greatly affect the international business of Ford and other firms.
❖ Political Risk
Political Risk is the risk that a country’s political actions may adversely affect a business.
Political problems between two government’s may cause consumers to react negativity
against the firms because of their country of origin.
So, a Ford must consider the political risk before deciding to do business there.

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Form of Business Ownership
Following are the three types of form of ownership
• Sole Proprietorship
A business owner by a single owner is called a sole proprietorship.
The owner of a sole proprietorship is called a sole proprietor.
• Partnership
A business that is co-owned by two or more people is called partnership.
The co-owners of the business are called partners.
• Corporation
A corporation is a state-charted entity that pays taxes and is legally separated
from its owners

Each form of ownership has its own advantages and disadvantages. The form of
business ownership of Ford is corporation which have the following advantages
and disadvantages;
❖ Advantages
Following are the advantages of a corporation;
• Limited Liability
Owners of a corporation have limited liability, which means they do
not have to pay economic obligated to creditors from their personal
income.
• Access to Funds
A corporation can easily obtain funds by issuing new stocks. This
allows corporations the flexibility to grow and to engage in new
business ventures.
• Transfer of Ownership
Investors in large, publically traded companies can normally sell their
stock immediately by calling their stockbrokers or by selling it online
over the internet.

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❖ Disadvantages
Following are the disadvantages of a corporation;
• High Organizational Expense
Organizing a corporation is normally more expensive than creating
the other forms of business because of the necessity to create a
corporate charter and file it with the state. Some expense may also b
incurred in establishing bylaws. Issuing stock to investors also entails
substantial expenses.
• Financial Disclosure
When the stock of a corporation is traded publically, the investing
public has the right to inspect the company’s financial data, within
certain limits. As a result, firms may b obligated to publicly disclosure
more about their business operations and employee salaries than
they would like. Privately held firms are not forced to disclose
financial information to the public.

• Agency Problems
Publicly held corporations are normally run by managers who are
responsible for making decisions for the business that will serve the
interests of the owners.
When managers do not act as responsible agents for the
shareholders who own the business, a so-called agency problem
results.
• High Taxes
Since the corporation is a separate entity, it is taxed separately from
its owners That’s why its taxes are more as compared to other forms
of business ownership.

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Company Performance
Company performance can be estimated by the following ways;
❖ Financial Statements
Financial statements include balance sheet and income statement.
• Balance Sheet (Price in million dollars)
Balance sheet is the statement of financial condition. It includes assets, liabilities
and owners equity.

Total Current Assets 116,744

Cash and Short Term Investment 49,961

Total Receivables, Net 52,394

Total Inventory 10,808

Other Current Assets, Total 3,581

Total Assets 267,261

Property/Plant/Equipment, Total - Net 66,321

Goodwill, Net 258

Intangibles, Net 144

Long Term Investments 4,901

Note Receivable - Long Term 55,277

Other Long Term Assets, Total 23,616

Total Current Liabilities 97,192

Accounts Payable 22,204

Accrued Expenses 1,731

Notes Payable/Short Term Debt 12,042

Current Port. of LT Debt/Capital Leases 39,301

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 Other Current liabilities, Total 21,914

Total Liabilities 236,571

Total Long Term Debt 110,341

Long Term Debt 109,973

Capital Lease Obligations 368

Deferred Income Tax 538

Minority Interest 121

Other Liabilities, Total 28,379

Total Equity 30,690

Common Stock, Total 41

Additional Paid-In Capital 22,290

Retained Earnings (Accumulated

18,243
Deficit)

Treasury Stock - Common -1,590

Unrealized Gain (Loss) 156

Other Equity, Total -8,450

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The analysis of Ford balance sheet is as follows;
1. Assets
Assets are the economic resources by utilizing them company generates profit.
The total assets of Ford are 267,261 million dollars, which shows that the financial
condition of Ford is very strong.

Following are the two types of assets;

i. Current Assets
Current assets are those assets which can be easily converted into cash or
whose time period is less than one year.
The total current assets of Ford are 116,744 million dollars.
ii. Fixed Assets
Fixed Assets are those assets which can not be easily converted into cash or
whose time period is more than one year.
The fixed assets of Ford are 150,517 million dollars.

2. Liabilities
Liabilities are the economic obligations whom organization has to pay.
The total liabilities of Ford are 235,571 million dollars, which shows the huge liabilities
of Ford.
Following are the two types of Liabilities;
I. Current Liabilities
Those liabilities whom organization has to pay with in one year are called current
liabilities.
The current liabilities of Ford are 97,192 million dollars.
II. Fixed Liabilities
Fixed liabilities are those whom organization has to pay in more than one year.
The fixed liabilities of Ford are 139,379 million dollars.

3. Equity
Equity is the shareholders stack in the company.
The total equity of Ford is 30,690 million dollars.

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 • Income Statement (Price in million dollars)
Income statement is the financial statement which includes revenue, expenses
and equity.

Total Revenue 155,900

Cost and Expenses 155,326

Selling and Administrative Expenses 11,161

Operating and Other Expense 9,472

Operating Income 574

Interest Expense 1,020

Other Income 226

Equity in net income of affiliated companies 32

Net Income 84

The analysis of Ford income statement is as follows;

1) Revenue
The total selling price of all goods and services is called revenue.
The total revenue of Ford is 155,900 million dollars, which shows the high amount of
sales of Ford products.
2) Cost and Expenses
Cost refers to the amount spent by the business organization for the purpose of
acquiring an asset or for creation of the assets.
Expenses refers to the amount spent by the business organization for the ongoing
operations of the business in order to ensure.
The total cost and expenses of Ford are 155,326 million dollars. These high expenses
results in the low profit for Ford.
3) Net Income
Net income is the amount of revenue left after subtracting all expenses, taxes and costs.
The net income of Ford is 84 million dollars, which is very less as compared to its assets
and revenue.

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• Share Detail
When Ford first decided to sell its shares publically In 1956, Ford Foundation
agreed to sell 10.2 million units of stock at $63 per share. As with the passage of
time Ford expanded its business in many countries its volume of shares
increased. Now the volume of shares of Ford is 42,901,595 and price of each
share is $11.45.

• Dividend
A dividend is the distribution of some of a company’s earnings to a class of its
shareholders, as determined by the company’s board of directors. Dividends are
payments made by publicly-listed companies as a reward to investors for putting
their money into the venture
On Jan. 8, 2020 – The board of directors of Ford Motor Company declared a first-
quarter regular dividend of 15 cents per share on the company’s outstanding
Class B and common stock.

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Conclusion
Although, Ford is good utilizing its resources and technology but there are still faults in its
products. As Ford is working in more than 200 countries it is taking advantages of international
business and barriers reduction to international business, but remaining barriers to
international business are causing problem for Ford. Also except of huge network and high
revenue, the profit of Ford is very low because of very high expenses. Low profit of Ford is may
be due to impact of weak economic growth, inflation, high taxes and high interest rates in most
of the countries.

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Recommendation
Following are the recommendations for Ford;

• Ford can improve the quality of its products using technology.

• Ford should make innovative products.
• Ford can use digital marketing more effectively for advertisement.
• Ford should made safety facilities in its products to attract customer demand.
• Ford can satisfy its customers by different methods like taking customers
feedback.

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References and Sources
Following are the references and sources from where we have searched material for making
our assignment.

• Annual report of Ford

• Investing.com
• Investopedia.com
• Cleverism.com
• Forbes.com
• Notesmatic.com

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