Income Statement - Ford Motor Company - Assignment Example

Download file to see previous pages Income statement is different from the balance sheet because the latter represents a single instance of time (for example, a week). Income statements are for a longer time period that is a year or quarter of a year (Pandit and Phillips, 2004).
The term revenue is the amount of money received after selling a product or providing a service. Revenues are mentioned in the start of an income statement. They also represent the total sale made by a company in a time. The revenue generated once calculates, helps in determining the profits made by a company.
This covers all the expenses in maintaining a business. The cost for the operational unit of the business is also added in this. Operating expenses include the money spent on market research, development of products, marketing and promotion of goods and services and intellectual property rights (patents, trademarks etc.). Some items that are not accurately measured may not be reported (Garrison et al. 2003).
After having calculated the total revenue and expenses incurred, it becomes easy to calculate profit. Profit is revenue minus total expenses. They are referred to as the bottom line of an income statement because unlike revenues that are reported at the top of the income statement, profits are reported at bottom (Ford Motor Company Annual Report, 2012).
An analysis of Ford Motors Company’s income statement from year 2012 shows the following facts. The total revenue was $133,559,000. The cost of revenue was $116,107,000. The gross profit was $17,452,000. Amongst the operating expenses, the amount spent on research and development is Zero$. The net income is $5,665,000. The net income to include extra expenses is 5,665.0 $. The net income excluding extra expenses is 5,665.0 $.
This shows that throughout these years (2011-2014) the company has shown impressive growth. The company has been successful in reducing the percentage of sales for income tax ...Download file to see next pagesRead More