Follow up discussion response two paragraph Further the dialogue by providing more information and clarification two reference
Ford Motor Company reviews its statement and in many cases provides its quarterly report. The quarterly report helps executives, bankers, and investors to examine the financial statements of the company in detail. The quarterly comprehensive report that includes all of the company’s financial information for the current year as well as previous years. The balance sheet is included in the report. The balance sheet is critical because it displays the company’s assets, liabilities, and equity. It may show a two-year or longer comparison and detail revenue increases and decreases. The balance sheet is divided into three parts.
The assets, liabilities, and equities are all listed here. The organization’s financial capability is shown in all three sections. The Ford Company’s balance sheet detailed the divisions of assets, liabilities, and equity. When insolvency happens, the balance sheet may assist in identifying when debts are due. A balance sheet will help determine if a person’s liabilities have surpassed their available assets. The aim of these sections is to draw the reader’s attention to the current state of working capital and the current ratio. The ratios are important pieces of financial data because they display the organization’s financial patterns.
The balance sheet is primarily used to assess a company’s financial position. The balance sheet offers a brief snapshot of an organization’s overall financial health as of a specific date. According to Ford’s balance sheet, the total assets for their business are $259, 943 million. Ford has been financially secure and has healthy finance inside the group, while their overall liabilities are at comparing and updating the figures. $226,782 million, according to Ford’s company’s figures. The total assets are sufficient to cover the total liabilities. The balance sheet has been streamlined, and the common stock has increased slightly. Ford Motor Company used a strategy plan to keep working capital in place so that it could generate cash flow from its own operations.
This balance sheet, which analyses Ford’s current financial condition, provides a snapshot of useful information on current cash flows in and out of the business. An enterprise can show signs of high net value and can also handle some financial problems. Any breakdowns for long-term liabilities and current liabilities that signal a financial issue should be closely examined in each group. Long-term refers to an asset that is liquid for a year.
Analyzing the balance sheet of Ford Motor Company from its annual 2020 report shows that its current assets, current liabilities, and equities have observed a positive trend over the year. By dividing the current asset by the current liabilities stated on the balance sheet, the ratio is a good current ratio. Ford’s long-term solvency appears to be sufficient to meet its debt obligations, with no risk of serious financial distress in the future. Understanding the data on Ford Motor Company’s balance sheet in order to identify debts that will be paid to creditors in the coming year. If a company can pay off its debt within a year, it can be classified as current assets, which are beneficial to the company.
These financial ratios are used to assess a variety of factors that influence a company’s financial health. The following ratios are included in the balance sheet information: current, fast, current cash/debt coverage, and total debt/equity ratios. The current ratio is calculated by dividing 111,765 million current assets by 93,159 million current liabilities, which equals 1.19, indicating the capacity to fulfill short-term obligations. By 2020, the overall Debt / Equity ratio will be 44,766 / 33,161 equal to 1.35, indicating that the business is rising as a result of reduction of debt and success.
According to research, Ford has worked hard to address consumer demands, market problems, and equipment issues (Kahn, & Baum, 2020). Ford has shown the ability to maintain a solid liquidity position, as shown by their balance sheet, which shows the assets they own as well as the debt they owe. Ford Motor Company tends to be financially sound in the short and long term. The company has shown satisfactory success and financial strength, which has aided in attracting potential investors. According to calculations on their 2020 balance sheet, their efforts resulted in a positive net income. The balance sheet demonstrates the company’s financial strength. In addition, before deciding whether to invest in a company or not, every investor must consider various aspects of a business. When making a decision, an investor should not only consider the company’s figures, but also compare them to others in the industry to see how well they are doing.
References
EDGAR: Company Filings. SEC.gov | Company Search Page. (n.d.). .
Kahn, M. J., & Baum, N. (2020). Basic accounting and interpretation of financial statements. In The Business Basics of Building and Managing a Healthcare Practice (pp. 13-18). Springer, Cham.
