View the 2013 Annual Report for the Ford Motor Company, a Fortune 50 company, li
ID: 2492848 • Letter: V
Question
View the 2013 Annual Report for the Ford Motor Company, a Fortune 50 company, linked here as well as on the Course Information page. Using this report, answer the following questions: annual report - http://corporate.ford.com/doc/sr13-form-10-k.pdf
Compute the inventory turnover ratio for 2013 and 2012 using the ending inventory instead of the average inventory. What is your evaluation of the difference?
What was the total amount of inventories on December 31, 2013 and 2012? What were the principal categories of inventory on these dates?
What was the amount of the current assets on December 31, 2013?
What was the amount in the allowance for doubtful accounts on December 31, 2013?
What is the par value of the company’s common stock? How many shares had been issued at the end of 2013?
Explanation / Answer
Inventory turnover ratio(based on closing Inventory)=cost of Sales/closing inventory
Inventory turnover ratio(based on average inventory)=cost of Sales/average inventory
The difference between using closing inventory and average inventory for computation of inventory turnover ratio can easily be seen above. The inventory turnover has increased a bit for 2013 and drastically for 2012 when we change the inventory type. More inventory turnover means the inventory is more efficiently managed by the company.
Closing Inventory as on December 31, 2013= $7708 mn
Cosing inventory as on December 31,2012=$7362 mn
Principal categories of inventories were:
Current assets as on December 31, 2013: $42457 mn
Allowance for Doubtful accounts on December 31,2013=$357 mn
Par value of company's common stock= $.01 per share
Total shares issued at the end of 2013= common stock + class B stock
= 3.913 bn + 71 mn
= 3.984 bn
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