Introduction
Financial reporting is a significant task for all businesses, and they should invest much effort to cope with this assignment. Specific documents and templates exist to provide companies with assistance to present their information comprehensively and effectively. Form 10-K is among these documents because it helps publicly-traded companies describe their financial performance. Thus, the principal purpose of this paper is to explain the purpose of a firm’s 10-K and describe three essential items as well as their significance based on Ford Motor Company’s Form 10-K.
Main text
To begin with, one should state that Form 10-K is an annual report that the government represented by the US Securities and Exchange Commission obliges businesses to prepare. This document usually includes company history, risk factors, financial statements, and other significant data. As a rule, Form 10-K is requested by investors. It is so because these individuals can read the report to determine whether it is reasonable to buy or sell shares and whether they should invest in the business’s corporate bonds.
It is not a surprise that investors can make the decisions above since Form 10-K interprets the firm’s financial strength. It relates to the fact that this detailed document offers both selected financial data and its analysis. Consequently, the firm tries to demonstrate that the correlation among earnings per share, executive compensation, and subsidiaries is attractive for investors. In addition to that, this document includes an income statement and balance sheet that are useful to show how much money a particular company can generate. Finally, the letters from the firm’s chief financial officer and chief executive officer are attached to ensure that the information in Form 10-K is valid and up-to-date.
It is reasonable to comment on three essential items that are found in Ford Motor Company’s Form 10-K. The first item is called Business, and it is crucial because it allows stakeholders to understand the company’s background and how it makes money. In its Form 10-K, Ford Motor Company (2012) describes its market position, production process, sales volume, and others. Risk Factors stand for the second significant item to consider. Stakeholders can read this section to understand what problems the firm is likely to witness, and what their probable consequences are. As for Ford Motor Company (2012), these factors include financial crisis, decreased sales, failure to achieve growth, continued or increased price competition, and many others. A positive feature is that there are no unresolved staff comments in the Form 10-K under analysis. The final item relates to the Selected Financial Data because it helps investors decide whether it is rational to deal with the company under review. This item stipulates that Ford Motor Company (2012) obtained higher revenues in 2012 than it did in 2010 and 2009, which makes this business attractive for investors.
Conclusion
In conclusion, Form 10-K is an essential document since it is an annual report filed by publicly-traded companies. This report is the most useful for investors because they read this information to determine whether it is beneficial to buy or sell shares of the business. These decisions can be made since Form 10-K focuses on essential financial data and related items. As for Ford Motor Company’s Form 10-K, these significant items include Business, Risk Factors, and Selected Financial Data. Each of these items is meaningful because they provide stakeholders with information on the company’s history, current and previous financial performance, and the most influential risk factors. The analysis of the three phenomena above can help determine whether to invest in Ford Motor Company.
Reference
Ford Motor Company. (2012). Form 10-K. Web.