Week 7 FA Case
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Week 6 FA Case
Caleb Cofer
Dr. Patrick
AC 740: Accounting Theory
October 3, 2023
2
In the “outlook” section of Ford’s 2022 10-K, they revealed a ton of valuable forward-
looking information for investors to use. Ford stated that they expect adjusted EBIT somewhere between $9 billion and $11 billion and an adjusted free cash flow of $6 billion, which are both major improvements over 2022. These estimates are based on multiple headwinds, including an expected mild US recession and a moderate European recession, higher incentives across the automotive industry as supply and demand begin to level back out, continuations of the strong dollar, lower past service pension income of around $2 billion, and continued investments in growth. In contrast, they also noted several tailwinds which include improvements in the supply chain and industry volume, launches of brand-new products, and a lower cost of goods sold. Ford
is expecting both a bounce back in their numbers and the economy as a whole, but we will have to see if they are correct or not.
GM’s forward-looking statements are very similar to Ford’s, in the sense that they are expecting a turnaround for the economy and therefore a stabilization of the automotive industry. They believe that this will drive up their sales and allow them to make more affordable vehicles, therefore attracting more customers. Although, since GM’s 2022 was much better than Ford’s, they are expecting less growth or “recovery”, and more of a stabilization and sustainability of the
year they had in 2022.
Tesla’s approach to forward-looking statements is a little different than that of Ford and GM, presumably because they are a much newer and faster-growing company. Their outlook was
based less on the economy and projections, and more on development. This is seen when they mention the different Tesla models and their production locations, showing three new products – the Tesla Semi, Tesla Roadster, and Robotaxi. Tesla states that the Tesla Semi is further along in production, already having a production location in Nevada and a status of “pilot production”,
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while the Tesla Roadster and RoboTaxi are both still in development and the production locations
are TBD. Tesla plans on growing their manufacturing capacity, while also reducing costs, creating new innovation strategies, and adding more localized procurement and manufacturing in
order to increase their vehicle’s affordability. Tesla also is placing a large importance on energy generation and storage, which they believe is key for their long-term success. They will continue to increase the production of their energy storage products to meet the high demand.
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References
Inline XBRL Viewer. (n.d.-a). https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata
%2F1318605%2F000095017023001409%2Ftsla-20221231.htm#financial_statements Inline XBRL Viewer. (n.d.-a). https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata
%2F1467858%2F000146785823000029%2Fgm-
20221231.htm#i54c9b176c0804fcabe51d5f8101e6190_187 Inline XBRL Viewer. (n.d.). https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata
%2F37996%2F000003799623000012%2Ff-
20221231.htm#ie50adb6d899d4f6ebcb5e73f7bd915e7_16
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