Manufacturing Companies and Auto Companies like Ford Motors have captive finance subsidiary to finance their customers and dealers to enhance sales. In the Financial Statements, sales (interest earned and accruing on finance receivables) and expenses ( overheads and interest on debt) of such finance segments / subsidiaries are reported. Should sales and expenses of such finance segment or subsidiary be included with other segments like auto, service segments while analyzing gross margin ratio or should gross margin be analyzed only from the main products like cars sold and services provided by the manufacturing company AND net interest earned by the finance subsidiary can be analyzed as a be part of either operating income or taken below the income statement to the interest expense / income line item for the finance segment / subsidiary.
