Modern public companies are expected to file Form 10-K annually in order to report the specifics of their financial performance. This report is usually rather comprehensive and detailed to reflect what financial goals were achieved by a company during a certain period of time (Epstein, 2014). The purpose of this paper is to review the 10-K form required by the U.S. Securities and Exchange Commission to be provided for Ford Motor Company and discuss its purpose and key elements.
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Purpose of Ford Motor Company’s 10-K
The purpose of Ford Motor Company’s 10-K is to represent what financial goals were achieved during a set period of time, what current position is taken by the company in its business sector, and what risk factors can be discussed as influential in the market. The Form 10-K interprets the company’s financial strength through presenting detailed financial statements and their analysis for the reviewers of the report (Epstein, 2014). As a result, it is possible to access all the data regarding Ford Motor Company’s financial operations, successes, and failures with reference to the explained opportunities, risks, achievements, and current operations, as well as the potential for further growth in the industry (Ford Motor Company, 2014). This report includes more details than traditional annual reports, and all the provided interpretations and conclusions are based on transparent financial data and evidence (Bharati et al., 2019). Therefore, the purpose of 10-K is to provide current and potential investors with all the credible information regarding the company’s financial position.
Three Important Items From Ford Motor Company’s 10-K for 2012
The first important item to consider is the information about the current state of the company and potential risks for its operations, including possible external and internal threats. This information is extremely important for stakeholders to make decisions regarding their further actions. Stakeholders should pay attention to the analysis of risk factors in the industry and their effects on the operations of Ford Motor Company (Ford Motor Company, 2014). For example, in 2012, the following risks were determined as critical to affecting the company’s operations and financial stability: the decline in the sales volumes in the industry, lower market acceptance of the company’s products, and continued price competition among other factors.
The second item is related to the company’s financial statements. Stakeholders need to make important decisions regarding Ford Motor Company’s position referring to the analysis of a balance sheet, the statement of cash flows, and the income statement. The third item is the analysis of the market and industry (Ehrlich & Williams, 2016). Thus, stakeholders and other reviewers of the report should focus on the data regarding the analysis of the current financial condition, results of operations, and accounting estimates among other data (Ford Motor Company, 2014). This information should be supported by the conclusions retrieved regarding the corporate governance in the organization to conclude regarding ethical policies adopted at Ford Motor Company.
This paper has presented the discussion of Ford Motor Company’s 10-K with reference to its purpose and specific role for stakeholders. Additionally, the three items from the report have been recognized as important to influence stakeholders’ decisions regarding their cooperation with the company. From this perspective, it is significant to note that 10-K forms are more informative for investors and other stakeholders in comparison to annual reports.
Bharati, R., Crain, S., & Jategaonkar, S. (2019). The change in investor reaction to 10-K filings after Regulation Full Disclosure and the Sarbanes–Oxley Act. Managerial Finance, 46(1), 120-138.
Ehrlich, C. P., & Williams, J. D. (2016). How to avoid running afoul of the SEC. The CPA Journal, 86(3), 28-31.
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Epstein, L. (2014). Financial decision making: An introduction to financial reports. Bridgepoint Education, Inc.
Ford Motor Company. (2014). Ford Motor Company Form 10-K. Sec.gov. Web.