Ford Motors is reaching out to one of the well known international management consulting firm asking them to prepare an “investment opportunity summary” as they need to expand by acquiring another publicly traded company in the same industry.
Executive Summary–> Includes industry targeted for expansion, description of the financial position of Ford motors, and your recommendation concerning the acquisition.
Vision/Goal/Mission/Strategy for Ford Motors–> Their long-term intent and business purpose; what the firm wants to be; how this target fits with their vision, objectives, and approach/ focus. (This section should discuss corporate restructuring motives along with opportunities for creating additional shareholder wealth).
Look at the annual statement (morning star, etc).
The Ford Company has some options in the Auto industry that it can expand into through acquisition. Tesla Motors, Inc. was incorporated in the state of Delaware on July 1, 2003. The company has scaled its magnitude into a publicly traded company. In 2016, Tesla Motors completed a public offering of ordinary shares. A total of 7,915,004 shares were sold, achieving cash proceeds of approximately $1.7 Billion. Tesla Motors designs, develops, manufactures and sells electric vehicles and energy products. Tesla’s innovation and technological focus present Ford Motors with a chance to develop and improve its products as well as exploit the consumption potential for electric vehicles.
Ford currently has the financial capability to undertake the acquisition. The corporation’s total assets as of 2016 were $237.951 billion and liabilities of $208.668 billion. The total company revenue has been increasing over the years: the revenue for the period ending 31st December, 2016 was $151.8 billion. The gross profit realized in 2016 was $16.312 billion, with an adjusted pre-tax profit of $10.4 billion. The company’s net income was $4.6billion and the earnings per share of $1.15. Ford’s market share was at 7.3% at the end of 2016. The company distributed $3.5 billion to its shareholders in the same year (Ford Motor Company). From the financial outlook of the business, Ford Motors can afford to venture into a new business to increase its revenues. There was a slight reduction in earnings as compared to 2015, attributed to investments in emerging opportunities that increased total expenses. However, the company shows consistent growth and can manage to acquire Ford Motors…