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Ford Company Analysis - corporate structure and financial analysis

Extracts from this document...

Introduction

´╗┐FORD MOTOR ? company analysis ?PROFITABLE GROWTH FOR ALL? Helena Kiviniitty Jakob Caculovic Milos Grubic December, 2012 Contents Introduction 1. Analysis of corporate governance 1.2 Charter of the Audit Committee 1.3 Charter of the Compensation Committee 1.4 Charter of the Finance Committee 1.5 Charter of the Nominating and Governance Committee 1.6 Charter of the Sustainability Committee 1.7 Corporate Governance Principles 1.7.1 Main idea 1.8 Board of Directors Structure and Operations/Board Compensation 1.8.1 The process of selection and the size of the board 1.8.2 Qualifications 1.8.3 Independence of Directors 1.8.4 Board Committees 1.8.5 Compensation of Board 1.8.6 Director Orientation and Continuing Education 1.8.7 Meetings 1.8.8 Responsibilities and Duties 1.8.9 Conflicts of Interest and Concern Reporting 1.9 Annual Performance Evaluation 1.9.1 CEO Alan Roger Mulally 2.Financial statement and ratio analysis 3.Estimation of the cost of equity, debt and the cost of total capital 4.Evaluating the firm?s current investments 5.Where and how firm get its current financing? 6. Estimation of the optimal financing mix with an indication of whether and how the company should move to the optimal capital structure 7. Evaluation of Cash Redistributions to Shareholders 6.1 Main Competition Analysis References Introduction Ford Motor Company, a global automotive industry leader based in Dearborn (suburb of Detroit), Michigan, manufactures or distributes automobiles across six continents. With about 168,000 employees and about 65 plants worldwide, the company?s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. In the past it has also produced heavy trucks, tractors and automotive components. Ford owns small stakes in Mazda of Japan and Aston Martin of the United Kingdom. 1. Analysis of corporate governance The Board of Directors of Ford Motor Company has adopted corporate governance practices to promote the effective functioning of the Board, its committees, and the Company: 1. Charter of the Audit Committee 2. Charter of the Compensation Committee 3. Charter of the Finance Committee 4. ...read more.

Middle

Shanks 19 Relationships Chief Financial Officer, Executive Vice President, Chief Accounting Officer and Chairman of Global Risk Management Committee 59 Mark Fields No Relationships Chief Operating Officer 51 Michael E. Bannister 47 Relationships Executive Vice President, Executive Chairman of Ford Motor Credit Co and Chief Executive Officer of Ford Motor Credit Co 62 Insiders At Ford Motor Co (F) Name (Connections) Board Relationships Title Age William Ford Jr. 206 Relationships Executive Chairman, Chairman of Finance Committee and Member of Sustainability Committee 54 Alan Mulally 25 Relationships Chief Executive Officer, President, Executive Director and Member of Finance Committee 66 Michael Bannister 47 Relationships Executive Vice President, Executive Chairman of Ford Motor Credit Co and Chief Executive Officer of Ford Motor Credit Co 62 John Lawler 28 Relationships Vice President, Chairman of Ford Motor China and Chief Executive Officer of Ford Motor China 46 Edsel Ford II 98 Relationships Consultant, Director, Member of Finance Committee and Member of Sustainability Committee 63 Other Board Members On Board Name (Connections) Board Relationships Primary Company Age Homer Neal 40 Relationships Ford Motor Co. 66 Ellen Marram 239 Relationships KBL Healthcare Acquisition Corp III. 63 Richard Manoogian 138 Relationships Richard & Jane Manoogian Foundation 75 Stephen Butler 36 Relationships Cooper Industries plc 64 Irvine Hockaday Jr. 73 Relationships The Estée Lauder Companies Inc. 75 John Thornton 371 Relationships Laura Ashley Holdings plc 58 Kimberly Casiano 28 Relationships Mead Johnson Nutrition Company 54 Gerald Shaheen 131 Relationships U.S. Chamber of Commerce 65 Richard Gephardt J.D. 144 Relationships The Boeing Company 71 Anthony Earley Jr. 256 Relationships PG&E Corp. 63 James Hance Jr. 98 Relationships Family Dollar Stores Inc. 67 William Helman IV 135 Relationships Greylock Partners 54 Jon Huntsman Jr. 47 Relationships Huntsman Corporation 51 William Ford Sr. 21 Relationships Ford Motor Company Of New Zealand Limited 1.9.1 CEO Alan Roger Mulally Allan Roger Mulally is the President and Chief Executive Officer of Ford Motor Company. ...read more.

Conclusion

Date 3. Avg. # of stocks 4. Amount $ (1x3) 0,05 Jan 27 48 Mil. 2,4 Mil. 0,05 Apr 30 48 Mil. 2,4 Mil. 0,05 Aug 1 30 Mil. 1,5 Mil. 0,05 Oct 31 44 Mil. 2,2 Mil. This dividend policy showed to be good, especially because (on purpose or not) it lowered the effect of the economic depression in 2008 and the following years. As we can examine the dividend payout rate, at least we can analyze FCFE- free cash flow for equity. 2008 2009 2010 2011 Net Income -14.571 2.699 6.561 20.319 Depreciation 12.421 6.931 5.584 4.256 Capital Expenditures -783 -4.179 -3.230 -4.029 Change in Debt -14.334 -21.755 -28.453 -4.500 Change in WC -3.521 5.631 -16.369 -1.624 FCFE -13.746 -21.935 -3.169 17.670 From table we have constructed and calculated FCFE we can conclude that Ford reasonably haven?t paid out dividends in previous years, and also we find very positive signal for investors that after marking positive FCFE in 2011 they have declared and paid dividends in 2012. 6.1 Main Competition Analysis The Ford?s biggest competitors are General Motors and Toyota Motors. General Motors (000 $) 2011 2010 2009 1. FCFE 9.190.000 6.172.000 (4.297.000) 2. Dividends paid 916.000 1.572.000 97.000 3. Buybacks 0 1.462.000 0 4. Payout ratio (2+3/1) 9,96% 49.15% -2.25% Toyota Motors (000 $) 2011 2010 2009 1. FCFE 3.446.000 4.925.000 2.242.000 2. Dividends paid 1.905.000 1.700.000 1.846.000 3. Buybacks 455.000 345.000 110.000 4. Payout ratio (2+3/1) 68,48% 41.52 % 87.24% As it can be seen from the tables GM and Toyota have paid their dividends regularly and didn?t change their policies. Nevertheless they did so from different reasons. Toyota from success in US market in years prior and during the crisis. Toyota has with years become world?s largest car manufacturer, so it has been reasonable for them to maintain their dividend policy. GM on the other hand went thru the hardest part of their history. Besides government back-ups they had to sell their brands Saab and Hummer and go through a restructuring period. Selling the assets made it mandatory for them to return some investments to the investors. ...read more.

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