Analysis of Ford Motor Company's Cash Flow Statement for Stakeholders

This presentation analyzes Ford Motor Company's cash flow statement, focusing on the major sources and uses of cash within operating, investing, and financing activities. The analysis reveals that Ford experienced an increase in cash flow from operating activities, a decrease in negative funds from investing activities, and a net increase in cash balance. The company's financial strengths include increasing cash flow, regular debt repayment, and a growing cash balance. Weaknesses include a decline in net income, increasing tax provisions, and increasing cash outflows from financing activities. The presentation concludes with an assessment of Ford's anticipated financial position, suggesting that profitability will likely increase as debt is repaid and investing activities continue to yield positive results. The analysis is based on the company's Form 10-K report.

F O R D M O T O R C O M P A N Y
ANALYSING CASH FLOW
STATEMENT

MAJOR SOURCES OF CASH
Operating activities:
• Revenue generating net income
• Stock compensation
Investing activities:
• Collection from operating lease and finance receivables
• Sales of marketable investments
Financing activities:
• Long-term debt issuance

MAJOR USES OF CASH
Operating activities:
• Cost of the products
• Pension expenses
Investing activities:
• Operating lease acquisition
• Purchase of investments and marketable securities
Financing activities:
• Long-term debt principal payment
• Dividend and interest payment

CASH FROM OPERATING ACTIVITIES AND
NET INCOME
The difference Between net income and operational cash flows
is 17639-84 = 17555.
The major causes of deviation involves:
• Depreciation and amortization $9689
• Change in accounts payable $5260
• Change in accounts receivables $816
• Provision for deferred income taxes $1370
• Pension funds $2625

FINANCIAL STRENGTHS
The major financial strengths of ford motors involve:
• Increase in cash flow from operating activities from $15022 in
2018 to $17639 in 2019.
• Decrease in negative funds from investing activities from
$16261 in 2018 to $13721 in 2019.
• Net increase in the cash balance has raised in 2019 at $834
which was $-1731 in 2018.
• The closing cash balance is increasing and reached to $17741
in 2019.
• Regular repayment of the long-term debt.

FINANCIAL WEAKNESSES
The Weaknesses of the company are as follows:
• Net income has declined in 2019 to $84 from the balance of
$3695 in 2018.
• The provision for tax is increasing to $1370 and this was
lower at $197 in 2018.
• There are negative foreign exchange differences of $54 which
were positive earlier.
• The cash outflows from the financing activities are increasing
and reached to $3129.

ANTICIPATED POSITION
• The profitability will be increasing as the debt is repaid and by
that expenses will be reducing.
• The net cash balance has increased and that shows it will
continue and further rise.
• The investing activities cash flow is moving in positive
direction and the same will continue as that will yield positive
results in coming period.

REFERENCES
• Ford. (2019). Form 10-k. Retrieved from: https://
shareholder.ford.com/files/doc_financials/annual/10k-2019-q4
.pdf
• Hoque, M., Bhandari, S. B., & Iyer, R. (2013). Predicting
business failure using cash flow statement based
measures. Managerial Finance.
• Deo, P. (2016). EVALUATING A CASH FLOW
STATEMENT. International Journal of Business, Accounting,
& Finance, 10(1).
• Kusuma, H. (2014). The Incremental Information Content of
the Cash Flow Statement: An Australian Empirical
Investigation. International Journal of Business
Administration, 5(4), 90.