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Ford Motor Co. (F)
Analysis of Investments
Difficulty: Advanced
Investment Accounting Policy
Investments in securities with a maturity date greater than three months at the date of purchase and other securities for which there is more than an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal are classified as Marketable securities.
Realized gains and losses and interest income on all of Ford’s marketable securities and unrealized gains and losses on securities not classified as available for sale are recorded in Other income/(loss), net. Unrealized gains and losses on available for sale securities are recognized in Unrealized gains and losses on securities, a component of Other comprehensive income/(loss), net of tax. Realized gains and losses and reclassifications of accumulated other comprehensive income into net income are measured using the specific identification method.
On a quarterly basis, Ford reviews the available for sale securities for impairment. If Ford concludes that any of these investments are impaired, Ford determines whether such impairment is other-than-temporary. Factors Ford considers to make such determination include the duration and severity of the impairment, the reason for the decline in value, and the potential recovery period and the intent to sell. If any impairment is considered other-than-temporary, Ford will write down the asset to its fair value and record the corresponding charge in Other income/(loss), net.
Source: 10-K (filing date: 2019-02-21).
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Ford Motor Co., adjustment to Net Income Attributable To Ford Motor Company
USD $ in millions
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13).
Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)
Ford Motor Co., adjusted ratios
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13).
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Ford Motor Co.’s adjusted net profit margin improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Ford Motor Co.’s adjusted ROE improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Ford Motor Co.’s adjusted ROA improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
Ford Motor Co., Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13).
2018 Calculations
1 Net profit margin = 100 × Net income attributable to Ford Motor Company ÷ Automotive revenues
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Ford Motor Company ÷ Automotive revenues
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by revenue. | Ford Motor Co.’s adjusted net profit margin improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
Adjusted Return on Equity (ROE)
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13).
2018 Calculations
1 ROE = 100 × Net income attributable to Ford Motor Company ÷ Equity attributable to Ford Motor Company
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Ford Motor Company ÷ Equity attributable to Ford Motor Company
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by shareholders’ equity. | Ford Motor Co.’s adjusted ROE improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |
Adjusted Return on Assets (ROA)
Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-08), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-13).
2018 Calculations
1 ROA = 100 × Net income attributable to Ford Motor Company ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Ford Motor Company ÷ Total assets
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by total assets. | Ford Motor Co.’s adjusted ROA improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018. |