The consolidated statement of income for Ford Motor Company appears below.

1. What do you notice about the way revenues and expenses are partitioned?
2. For the Automotive division, compute the ratio (Cost of sales/Sales) for each of the three years presented. Interpret the results.
3. Look at the operating results for the Automotive division. Is there any good news for Ford in these results?
4. Depreciation expense is reported by the Financial Services division but not by the Automotive division. Explain why this is so.
5. Which of the company€™s two divisions seems to be performing better over time?
6. Is Ford a car company that finances autos or a finance company that makescars?

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Ford Motor Company and Subsidiaries Consolidated Statement of Income For the Years Ended December 31 (in millions) AUTOMOTIVE Sales 2006 2005 2004 $143,307 $153,474 $147.119 Costs and Expenses Cost of Sales 148,869 2,359 161,228 144,924 2,738 157,662 135.755 11,564 47.319 Selling, administrative and other expenses . Total Costs and Expenses Operating Income/(loss) Interest Expense Interest Income and other non-operating income/(expense), net Equity in net Income/(loss) of affilated companies Income/(loss) before Income ta FINANCIAL SERVICES Financial Services revenues (17,921) 995 1,478 421 (4,188) ,220 1,249 285 (3,874) (200) 988 (17,017) 16,816 7,788 5,295 1,526 241 14,850 23,422 7,197 5,854 6,030 483 9,564 1,095 4.953 Costs and Expenses Interest Expense 25,197 7.250 6.618 5.830 .212 20,910 ation Operating and other expenses Provision for credit and insurance losses Total Costs and Expenses Galn on sale of Hertz Incomei(loss) before Income taxes financlal services . TOTAL COMPANY INCOME(LOSS) BEFORE INCOME TAXES Provision for(benefit from) Income taxes INCOME/(LOSS) BEFORE MINORITY INTERESTS Minority Interests In net Income/(loss) of subsldiarles.... INCOME(LOSS) FROM CONTINUING OPERATIONS Income/(loss) from discontinued operations INCOME(LOSS) BEFORE CUMULATIVE EFFECTS 1,966 4,287 (15.05I) (2.646) (12,405) 1,079 1,924 280 1,644 47 4,109 643 3.466 282 3.184 (12.615) OF CHANGES IN ACCOUNTING PRINCIPLES Cumul (12.613) 1,691 3.038 ative effects of changes In accounting principles NET INCOME/(LOSS) (12,613) 1,440 3.038