Strategic Financial Management

p 1 . Introduction

Founded and incorporated in the year 1903 by Henry Ford , Ford Motor is an international company and a firebrand for producing cars and trucks Operating in vast demographics such as Asia Pacific and Africa , Europe and America , the company is prominently engaged in Automotive sector and Financial services providing vehicle financing , leasing and insurance , executing operations through the branded The Americas , Ford Europe , Premier Automotive Group , Ford Asia Pacific and Africa /Mazda Company 's reputed automobile brands include Jaguar ,Aston Martin , Land Rover [Great Britain] Lincoln , Mercury [U

.S] and Volvo [Sweden] . The company has attained the position of third largest manufacturer of automaker in the world as per the sales of year 2005 , recording a revenue of 177 .4 billion and net income of 2 .2 billion [2005] . The multinational has a workforce of 300 ,000 and 108 plants and 200 markets in six continents . The company meets the requirements of different segment of market viz , luxury car market , industrial market , consumer Ford sport motor race cars , market by manufacturing alternate fuel vehicles to facilitate the demands and needs of every unique customer /clients /dealers enrolled with the company .[85 ethanol , 15 gasoline] e .g . Ford Escape Hybrid . Company is enlisted in NYSE and holds a current share price of 7 .76 [9 .21 .06] and quoted at 8 .31 [02 .11 .05] having a regular trading of scrip at LSE . The company has been outstanding in payment of dividends to the shareholders . However the company recorded a net loss from operations which were 1 .44 Billion vis-a-vis the income of 2 .12B for six months ended on 30th June , 2006 and there is a steep fall in revenues by 7 amounting to 83 .02B . This is due to high cost of sales and expenses apart from a decline of automotive sales and short fall of income from financial services

2 . Delivery of value to shareholders - 5 years

The revenues of the company for the period : 2001-2005 [ Million]

2001 2002 2003 2004 2005

Revenue 162 ,412 .0 163 ,420 .0 164 ,196 .0 171 ,652 .0 177 ,089 .0

Gross Profit 43 ,944 .0 33 ,253 .0 38 ,283 .0 34 ,375 .0 35 ,796 .0

Net Income (5 ,468 .0 ( 995 .0 ) 495 .0 3 ,487 .0 2 ,024 .0

Dividend 1 .05 0 .40 0 .40 0 .40 0 .40

Earnings per share 3 .02 0 .15 0 .50 E2 .00 1 .15 Dividend declared and paid upto the date 31 .07 .2006

Dividend Amount per share

01 .26 .06 Cash Dividend 0 .1000

04 .28 .06 Cash Dividend 0 .1000

07 .31 .06 Cash Dividend 0 .500 Dividend Rate : 0 .20 Current Dividend Yield : 2 .6 Five-yr Dividend yield : 4 .1

In the recent past [31 .7 .06] , the company shared with its investors that the company has posted quarter losses and closure of 14 automobile factories and dismissal of 30 ,000 employees in Northern America with a plan of restructuring

Apart from...