Analysis of Annual Reports Released by Ford Motor Company and General Motors Company - Essay Sample

Annual reports are usually prepared on an annual, half-yearly, and quarterly basis. Annual reports help companies to disclose information on financial performance, give a summary of the achieve targets (Bovee & Thill, 2018). It also provides an insight into future targets they would like to improve on and relay the information to stakeholders, shareholders, and prospective clients. The essay will provide a comprehensive analysis of the annual reports released by Ford Motor Company and General Motors Company.

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The two companies' annual reports that will be analyzed are Ford Motor and General Motors. The first distinguishable discrepancy between the two companies' reports was how their report started. General Motors started by providing retail vehicle sales information at different subsidiaries across different continents (United States Securities and Exchange Commission, 2017). Ford began its analysis by providing the highlights that occurred in 2017. For instance, the firm progressed their independent vehicle plan, building out a sturdy business model, and rapidly increasing their competences (Ford Motor Company, 2017). Ford was also the best-selling variety in the U.S. during the year.

Another difference is the raw materials, services, and goods. GM buys an eclectic assortment of raw materials, parts, supplies from several suppliers. The raw materials include steel, aluminum, and platinum group metals (United States Securities and Exchange Commission, 2017). The raw materials of Ford Company include base metals (steel), precious metals (palladium), and energy (Ford Motor Company, 2017). The company also has risks, and doubts on the issue of supplying raw materials, unlike General Motors.

According to the financial highlights of Ford Company, they were able to perform slightly better in terms of revenues in 2017 ($145.7B) from the previous year (141.5 B) (Ford Motor Company, 2017). The net income grew significantly from $4.6 B to $7.6B (Ford Motor Company, 2017). The statistics helped shareholders to conclude that the company performed well in terms of sales of vehicles, parts, and fixtures. The majority of their sales happened when products are shipped from the firm's industrial facilities. The revenues of General Motors declined in 2017 to 4,778 from 5,214 the previous year (United States Securities and Exchange Commission, 2017). It was attributed to reduced sales of vehicles, parts, and accessories, loss of customers, and augmented costs in U.S. The shareholders were able to see that the company performed poorly.

In Ford Company, the top managers emphasize several goals; expanding their electrified portfolio to forty electrified vehicles internationally. It will include 'sixteen full battery-electric cars' (Ford Motor Company, 2017). Some of the potential challenges accentuated include; automotive profit expected to be flat due to progressive headwinds from goods, and exchange. Further higher market forces brought by mix and net pricing. The major plan that top managers have articulated include; a planned investment in electrified vehicles to over $12 billion in the next three years (Ford Motor Company, 2017).

In General Motors, the top managers emphasize on several financial goals; implementing a cross-segment part sharing meant to decrease the entire number of international vehicle designs to four major vehicle sets. It will help them to leverage their current architecture range to incorporate their clients around the globe (United States Securities and Exchange Commission, 2017). The top managers of General Motors are planning to invest in numerous technologies. Such as providing levels of vehicle electrification including eAssist, plug-in hybrid, extended range and zero-emission battery electric vehicles as a section of their long-term plan to decrease petroleum usage, and GHG emissions (United States Securities and Exchange Commission, 2017). The company faces progressive challenges such as weak financial situations, competitive pressures, emission standards, political qualms, and foreign exchange unpredictability.

The format and structure of Ford Company begin by offering financial highlights, then progresses down by explaining the achieved goals, and future plans. It offers a clear picture to the shareholders on the current financial position of the company and future plans. General Motors' annual report structure is categorized into three organized parts. Each part offering clear information on different aspects to the stakeholders.

In conclusion, the annual reports released by Ford Motor Company, and General Motors Company are different in terms of structure, goals, challenges, and future plans. The revenues of Ford Company grew in 2017 as opposed to the previous year while those of GM reduced. In terms of plans, both firms are planning to invest in electrified vehicles globally but with different goals. Ford hopes to increase its sales revenue even further while GM targets to reduce petroleum usage and GHG emissions

References

Bovee, C. L., & Thill, J. V. (2018). Business communication today (14th ed.). Retrieved from: file:///C:/Users/User/Downloads/Chapters%203,%2010-11.pdf

Ford Motor Company. (2017). 2017 Annual Report. pp.1-248. Retrieved from: file:///C:/Users/User/Downloads/Ford%20NYSE_F_2017.pdf

United States Securities and Exchange Commission. (2017). 2017 Annual Report of General Motors Company. pp. 1-133. Retrieved from: file:///C:/Users/User/Downloads/NYSE_GM_2017.pdf