Ford Motor Company

Definition

Ford Motor Company is a global automotive manufacturer known for its cars, trucks, and utility vehicles. Founded in 1903 by Henry Ford, the company has been a significant player in the automotive industry and finance sectors.

5 Must Know Facts For Your Next Test

1. Ford often utilizes trade credit to manage its supply chain operations efficiently.
2. The company employs various working capital management strategies to maintain liquidity and operational efficiency.
3. Ford's cash management practices include optimizing inventory levels and managing receivables effectively.
4. The company's financial health heavily relies on balancing trade credit terms with suppliers and customers.
5. Ford has historically used just-in-time (JIT) inventory systems to reduce carrying costs and improve cash flow.

Review Questions

• How does Ford Motor Company utilize trade credit to manage its supply chain?
• What working capital management strategies are employed by Ford to maintain liquidity?
• Why is optimizing inventory levels crucial for Ford's cash management practices?

Related terms

Trade Credit: Short-term financing provided by suppliers allowing businesses to purchase goods or services now and pay later.

Working Capital: The difference between current assets and current liabilities, indicating the liquidity of a business.

Cash Management: The process of collecting, managing, and investing cash in an organization to ensure sufficient liquidity for operations.