Financial Accounting

TUI University

Module 1- Case

Financial Accounting 201

9 April 2014

After selecting the three publicly traded companies to report on, I was able to answer the following questions.

1. How much cash if available for the company to pay its current debts?

Duke Energy Annual Report show that the total operating revenues in 2012 was: $19,624 million. The Net income for the year was $1,782 million and the Net income attributable to Duke Energy was $1,768 million. That, with the Ratio of Earning to Fixed Charges of 2.5, shows that Duke Energy made a profit this year.

Ford Motor Company Annual Report shows that they made over $24.3 billion this year with a cash net automotive debt of $10 billion. That tells me that they had more than needed to pay debts. This gives the shareholders a great return on their money for the year of about 23 percent.

Reynolds American Inc. show a Net income of $2.24 million after operation expenses which gives them enough profit to cover their debts. Also, the shareholders earned 2.33 percent on their investment which mean they get 2.33 dollars for every dollar invested.

2. Is the company in trouble or in bad shape?

Ford is operating in great shape, because they are making money on their vehicles. With a revenue of $24.3 billion throughout the year, they have very little concerns.

Duke Energy is doing well because they are making profits through mergers with other power companies. They are looking to save a relative $687 million if they stay on track. This company has an operational revenue of more than $19 million and closed out with over $$1.76 billion total assets at the end of year.

Reynolds American Inc. is also in good shape with a ratio of 2.33 to their shareholders. So everyone is making a profit. If you look at the Net sales for this company it is $8,304 (million).

3. Is each company increasing or decreasing its investment in its operations?

Ford Motor Company December 2012 showed a great increase in investments...