Financial management - Assignment Example

Ford was able to get this money by pledging almost all of its assets as collateral, including its U.S. property, plant, and equipment; its equity investments in Ford Credit and Ford’s foreign subsidiaries; and its trademarks, including the Ford brand name and logo. Why did Ford decide to use up all of its financial slack in one gigantic gulp? First, debt financing was available on relatively easy terms in 2006. Second, Mulally must have been aware of the history of restructuring programs in the U.S. auto industry.

Some of these initiatives were failures, some partial successes, but none solved Ford, GM, or Chrysler’s competitive problems. The companies shrank but did not improve significantly. So Mulally was in effect sending a wake-up call to Ford’s managers and employees: “We’ve raised all the cash that we can get. This is our last chance to reform the company. If we don’t make it, Ford is gone.” For the final project, you are to conduct an analysis and evaluation of the capital structures and costs of capital of Ford Motor Company over a history of 5 years.

The examination will be in three parts. 1. State the amount of the following in the financial statements for the years 2008, 2009, 2010, 2011 and 2012 using the following table (NOTE: Long term debt includes all long term debt regardless of when payable) - Fair value is a standard of measurement used in financial reporting. It refers to the market price that would be received upon a security if it were to be sold (Warren, Reeve & Duchac, 2014). Ford Motor Company (2008) adopts the January 1, 2008 SFAS No.

157, Fair Value Measurements, definition of fair value, defining it as the price receivable so as to execute the selling of an asset of payment for the transfer of a liability taking place in a orderly transaction among the market participants at the given measurement