Alternate problem B Ford Motor Company is the world\'s second-largest producer o
ID: 2591661 • Letter: A
Question
Alternate problem B Ford Motor Company is the world's second-largest producer of cars and trucks and ranks among the largest providers of financial services in the United States. The following information pertains to Ford: (in millions)
(in millions) 2014 2015 2016
Sales $118.017 $135,073 $141,230
Cost of goods sold 104,616 118,985 126,120
Gross margin $ 13,401 $ 16,088 $ 15,110
Operating expenses 7,834 8,874 9,884
Net operating income $ 5,567 $ 7,214 $ 5,226
a. Prepare a statement showing the trend percentages for each item, using 2014 as the base year.
b. Comment on the trends noted in part (a).
Explanation / Answer
Solution :
a)Statement showing the trend percentages Ford Motor Company $(in millions)
100%
119.67%
b) Comments :
Ford Motor company trend percentages increases for Sales and Cost of goods sold in 2015 and 2016 when compared to 2014 and trend percentages increases for Gross margin in 2015 when compared to 2014, but decreases in 2016 when compared to 2015. Operting expense increases in 2015 and 2016 when compared to 2014 and trend percentages also increases. Trend percentages for Net operating income increases in 2015 when compared to 2014 but decreases in 2016 when compared to 2015, because gross margin is decreased and operating expenses are increased in 2016 when compared to 2015.
Particulars 2014(%) 2015(%) Calculations 2016(%) Calculations Sales100%
114.45% =135,073 / 118,017119.67%
=141,230 / 118,017 Cost of goods sold 100% 113.75% =118,985 / 104,616 120.56% =126,120 / 104,616 Gross margin 100% 120.05% =16,088 / 13,401 112.75% =15,110 / 13,401 Operating expenses 100% 113.28% =8,874 / 7,834 126.17% =9,884 / 7,834 Net operating income 100% 129.59% =7,214 / 5,567 93.87% =5,226 / 5,567Related Questions
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