Income Statement Ford Motor Company

Income Statement

Referencing this week’s readings and lecture, address the following:

  • What are the two causes of an increasing or decreasing sales number?
  • Discuss all the reasons that might explain an increase or decrease in gross profit.

Income statements are presented in the table below for the Elf Corporation for the years ending December 31, 2010, 2009, and 2008. Write a one-paragraph analysis of Elf Corporation’s profit performance for the period. Create a common-sized income statement for the three years. What conclusions can you draw from the different parts of the statement? What are the causes and effects of Elf’s performance for those three years?

Elf Corporation Income Statements for the Years Ending December 31

(in millions)201020092008
Cost of goods sold  350  325  275
Gross profit  350  325  275
Operating Expenses:
Administrative  100  100  100
Advertising and marketing    50    75    75
Operating profit$200$150$100
Interest expense    70    50    30
Earnings before tax$130$100$  70
Tax expense (50%)    65    50    35
Net income$  65$  50$  35

Income Statement – Ford Motor Company

In a two- to three-page paper (excluding the title and reference pages), explain the purpose of an income statement and how it reflects the firm’s financial status. Include important points that an analyst would use in assessing the financial condition of the company. Also, analyze Ford Motor Company’s income statement from its Ford Motor Company 2012 Annual Report (Links to an external site.).

Your paper must be formatted according to APA style as outlined in the Writing Center, and it must include citations and references for the text and at least two scholarly sources from the University of Arizona Global Campus Library.