Report Sample on UB1BUF Finance Coursework
1. Explain the economic and financial environment of a company
1.1 Government policies
Government policies play a crucial role in the development of Ford and government policies include some key policies. The key policies are Ideas that raise total research and development with investment to 2.4% of GDP by 2027. In addition, the increased rate of the tax credit is rated as 12% (gov.uk, 2021). The other is infrastructure and business environment, which will launch the role in sector and build partnership between industry and government which raises all challenges and increases the overall productivity of this automobile sector. In addition, also drove the investment of £20billion, including establishing a new investment of £2.5billion (gov.uk, 2021), in a British business bank.
1.2 Central bank monetary policy
The global financial crisis is addressing such risks that are major financial institutions on the issues of currency. The policies are such as addressing deficiency, deflation risk, and payment shift (Dow, 2019). In addition, the policies like deflation risk and payments shift are also addressed in this policy which is the central government policy of the UK.
1.3 Global economic and financial environment
The authority of Ford is focused on the expectation and need of their customers and maintains brand loyalty in order to develop future opportunities. The global economic and financial environment also describes the risks which remain firmly in the downside of Ford (Law, 2017). The financial and global environment assists Ford to maintain sustainability of products and maintain brand value.
2. Financial and ratio analysis
Ratio analysis is the most significant tool through which a business can measure the financial performance of a business. As opined by Sadi’ah, (2018), the financial ratio shows various aspects of business such as liquidity and profitability as a debt of the business. In the study ratio such as debt-equity ratio, gross profit ratio and the current ratio has been shown.
2.1 Explain and choose three factors
| Calculation of ratio | |||
| Debt equity ratio | |||
| debt/ Equity | 2017 | 2018 | 2019 |
| debt | 15931 | 13547 | 13233 |
| equity | 30811 | 33230 | 36066 |
| Debt equity ratio | 0.5170556 | 0.4076738 | 0.3669107 |
| Gross profit ratio | |||
| Gross profit/ sales | 2017 | 2018 | 2019 |
| gross profits | 7731 | 3377 | 84 |
| sales | 127144 | 155900 | 160338 |
| Net profit ratio (%) | 6.08050714 | 2.1661321 | 0.0523893 |
| Current ratio | |||
| current assets/ current liability | 2017 | 2018 | 2019 |
| current assets | 116744 | 114047 | 114649 |
| current liabilities | 97192 | 98132 | 95569 |
| Current ratio | 1.20116882 | 1.1621795 | 1.1996463 |
Table 1: Calculation of the ratio
(Source: MS excel)
2.2 Discuss and compare of the ratio over the last three years
Through the table, three years of financial performance has been shown. In this table, it is seen that the business current ratio of the year 2019 stood at 1.196 and in the year 2017, the current ratio of the business stood at 1.20 (annualreports.com, 2018). The debt-equity ratio shows a business ability to pay its long term liabilities as well as it also reflects the amount of equity against its debt (Nuryani and Sunarsi, 2020). Reduction in debt-equity is good for any business to reduce the total amount of liabilities increase financial position in the market.
Competitor analysis of Ford and Vauxhall Motors
| Attributes | Ford | Vauxhall Motors |
| Overview | Ford is a multinational automobile organization that sells commercial vehicles and automobiles. | Vauxhall Motors is a car manufacturer company that sells and provides services of passenger cars, light commercial vehicles and electric cars. |
| Core activities | The organization focus on markets, services, manufactures and designs of utility vehicles, cars, Lincoln luxury vehicles and Ford trucks. There are three segments in which the company operates such as Ford credit, mobility and automotive. | The organization operates light commercial vehicles, electric vehicles, passenger cars under Vauxhall marquee and provides the services of trucks, buses and vans under the brand of Bedford vehicles. |
| Employees | Worldwide, the organization has approx 182, 000 employees. | There are almost 5000 employees in UK. |
| Customer service | The organization is focused on the satisfaction of customer. The management of the organization provides effective customer services in order to develop future opportunities. | The management of the organization is focused on the value and brand loyalty in order to provide effective services. |
| Reputation | In global best brands, the organization is ranked 119. Ford is a popular and has effective reputations due to reliability. | The organization has an effective reputation due to its reliability. |
Table 2: UK competitor analysis
(Source: Crated by Researcher)
3. Describe investment opportunities and finance in a current economic and financial climate
3.1 Description of sources of finance
A business has two main sources of finance on its capital and another is loan capital. Own capital of the business reflects shares capital, reserved capital including surplus. The business in the year 2019 has longer debt of 13233 million dollars and has a total amount of other liabilities as deferred revenue stood up at 25324 million dollars (annualreports.com, 2019). The authority of Ford is focused to the segment of mobility for development. The revenue of this organization is comes from the sales of automotive. Ford has its own financing named Ford Motor Credit company.
3.2 Explain the opportunities
While analysing various years’ financial reports it can be seen that business has a low amount of its debt as compared to its equity. The authority of the organization announced an effective investment on the production of electric vehicle. The organization has an effective reputation for its brand loyalty and reliability. Effective market share of Ford can increase the number of investors.
4. Ethical practices and Compliance
4.1 Explain the regulatory agency and with recent actions
Here the regulatory agency has no specific actions but it has some government strategies which are to be discussed “prevention-oriented, control-oriented, toleration-oriented, and also adaptation-oriented”. The government has no specific actions or rules which can address all risks and solve those issues but some strategies are supposed to analyze and they have negative effects on these risks (Taeihagh and Lim, 2019). The authority of Ford is focused to develop manufacturing vehicles. The market position and reputation of the organization assist the authority to take actions and decisions based on the situation.
4.2 Explain voluntary actions
The actions are CDP are named of this motor company which contains a list for cutting and cut emissions and mitigate all risk of this situation. Therefore, folds in the modest of this industry include $11.5 billion-plus electric vehicle, is offering all customers for larger electric vehicle network for this industry (ford.com, 2020). The authority of Ford build a fund for the development of community named Ford funds support. Ford fund support is focused on three areas such as driving safely, community life, and education.
Reference
Book
Law, C.M., 2017. Restructuring the global automobile industry (Vol. 4). Taylor & Francis.
Journal
Dow, S., 2019. Monetary reform, central banks, and digital currencies. International Journal of Political Economy, 48(2), pp.153-173. Available at: http://www.uvic.ca/socialsciences/economics/assets/docs/discussion/DDP1805.pdf
He, D., 2018. Money, Transformed Monetary Policy: In the Digital Age. Finance & Development, 55(002).
Nuryani, Y. and Sunarsi, D., 2020. The Effect of Current Ratio and Debt to Equity Ratio on Deviding Growth. JASa (Jurnal Akuntansi, Audit dan Sistem Informasi Akuntansi), 4(2), pp.304-312. available at : https://journalfeb.unla.ac.id/index.php/jasa/article/download/1378/885
Sadi’ah, K., 2018. The Effect of Corporate Financial Ratio upon the Company Value. The Accounting Journal of Binaniaga, 3(02), pp.75-88. available at : https://www.stiebinaniaga.ac.id/e-journal/index.php/Accounting/article/download/245/205
Taeihagh, A. and Lim, H.S.M., 2019. Governing autonomous vehicles: emerging responses for safety, liability, privacy, cybersecurity, and industry risks. Transport reviews, 39(1), pp.103-128. Available at: , DOI: 10.1080/01441647.2018.1494640
Website
annualreports.com , 2019 annual report of ford available at : https://www.annualreports.com/HostedData/AnnualReportArchive/f/NYSE_F_2019.pdf [ accessed on 1 November 2021]
annualreports.com, 2018 72828_CHPB01081_AR18.pdf available at : https://www.annualreports.com/HostedData/AnnualReportArchive/f/NYSE_F_2018.pdf [ accessed on 1 November 2021]
ford.com, 2020, FORD’S GREEN INITIATIVES, LOW-CARBON AMBITIONS, EARN COMPANY CLIMATE ‘A LIST’ DESIGNATION FROM CDP https://media.ford.com/content/fordmedia/fna/us/en/news/2020/01/20/ford-green-initiatives-low-carbon-ambitions-a-list-designation-cdp.html [Accessed on 26th October 2021]
gov.uk, 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/673045/automotive-sector-deal-single-pages.pdf [Accessed on 26th October 2021]
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