General Motors (GM) Financial Report: Financial Ratios and Annual Financial Statements Analyzed
Thanks for visiting my General Motors (GM) Financial Report page. On this page, you will be able to find preliminary information about GM's current financial performance as well as some historical track records and trends.
For a more detailed examination of GM's financial performance, please check out the "Financial Report". In this report, written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, you will find:
- Summarized income statement for the last 5 years.
- Summarized balance sheet for the last 5 years.
- Summary analysis by myself of the important income statement, balance sheet, and financial ratio trends, and other happenings.
- Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
- Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
- Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
- Each section includes an “in other words” segment. This is where I use plain English to explain concepts.
Enjoy the preliminary information and for a more detailed analysis, buy the financial report!
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Sample Financial Report
General Motors (GM): Brief Summary
General Motors (GM) is a car and truck manufacturer in Detroit, Michigan. The organization specializes in designing, building, selling, and financing cars and trucks throughout the US and on a global basis. Popular brands under GM control would include Buick, Cadillac, Chevrolet, GMC, and Wuling.
From a financial perspective, GM’s stock price has fluctuated between 14.33 to $41.90 in the last 52 weeks. The company’s last dividend payment was $0.38 back in March 2020. The market capitalization rate for the company is approximately $32.6 billion. As for the beta, it is 1.39. This shows that the firm is moderately more risky of an investment as compared to the overall market.
General Motors (GM) Financial Report Sources
“General Motors (GM) 2019 Financial Report: Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA. and owner of Quality Business Plan. In this report, I used GM's 2018 10k, GM's 2017 10k annual report, 2016 10k annual report, 2015 10k annual report, and GM's 2019 10k annual report as the basis for information gathering.
Section 1: General Motors (GM) Income Statement Analyzed 2015 to 2019
In this section, I walk through a broad definition as to what an income statement is and why it is important. From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail. After each line item is defined and discussed, I finally offer a summary analysis of GM's important income statement line item trends from 2015 to 2019, in most cases.
GM Revenue Growth.
General Motors ended 2015 with revenues at approximately $135.7 billion. In the next year, the company would increase revenues to approximately $149 billion. However, over the next three years, revenues fluctuated from $147 billion to $137.2 billion in 2019. This trend indicates that the organization is having a difficult time attracting and retaining loyal customers in the automobile market. On average, GM’s growth rate was .5%. For a mature company, this would be slightly below average for growth. From an investor’s perspective, this would be a little bit concerning. I mean, $137 billion a lot of money. But however, this is significantly lower than the previous three years.
GM Summary Income Statement 2019
|R & D||-||-||-||-||-|
Section 2: GM Balance Sheet Analyzed from 2015 to 2019
For GM's balance sheet, I again go through each important line item from the balance sheet. In reviewing each line item, I will define GM's balance sheet line items, such as cash, property, plant and equipment, and liabilities between 2015 to 2019. Next, I then offer a summary analysis of GM's important balance sheet line items.
GM's Cash Position.
General Motors ended 2015 with approximately $15.2 billion in cash. In the next year, the cash position would fall to $12.6 billion. However, in the next several years, their cash position would climb to $19 billion in 2019. The cash position growth indicates that the firm needs more liquid assets to fund operations. As compared to total assets, cash is approximately 8.4%. Finally, as a percentage of sales, this would be 13.9%.
GM Summary Balance Sheet 2019
|Short Term Investment||4,174||5,966||8,313||11,841||8,163|
|LT Debt - Current||37,400||31,891||26,965||23,797||19,562|
|Total Current Liabilities||84,905||82,237||76,890||85,181||71,466|
|Total Equity & Liability||228,037||227,339||212,482||221,690||194,520|
Section 3: General Motors (GM) Financial Ratios Analyzed from 2015 to 2019
For this section, I have chosen several different financial ratios to review for GM from 2015 to 2019. In reviewing each of GM's financial ratios, I first start with defining the financial ratio. Next, I supply the financial formula for calculating the specific ratio. Finally, I offer a brief analysis of General Motor's Important Financial ratios.
GM Current Ratio:
General Motors' current ratio ended 2015 at 1.09. At this position, the company was well balanced because it had slightly more current assets as compared to current liabilities. Over the next several years, the organization's current ratio would fall to .88 and 2019. This indicates that the company is continually increasing its current liabilities as compared to current assets. In doing this, the firm is continually increasing their risk for insolvency. In some industries, such as retail, having a current ratio below 1.0 is acceptable because of the continuous cash flow. In GM's case, having a current ratio below 1.0 for a sustained period of time is probably a risk that the organization should not be taken.
GM Total Asset Turnover:
GM ended 2015 with a total asset turnover of .70. In the next five years, the company's total asset turnover would fall to .60. This continued decline in total asset turnover shows that the firm is under the utilizing assets in the company. The main driver for this problem would be its fixed assets. In reviewing the fixed asset turnover, this ratio has been continually declining as well. This means that the firm is not optimally using their plants and equipment. To improve the fixed asset turnover, as well as the total asset turnover, the company needs to decide which plant and equipment are underutilized and divest the property accordingly.
GM Return on Assets:
GM's return on assets ended in 2015 at 4.94%. In the next four years, the return assets would fall to 2.92. This means that the company is making less money on assets controlled by management. To improve upon this issue, again, GM's executive team needs to identify which assets may be divested. Or, even better, identify how the company can improve sales while maintaining the status quo on assets held.
GM Debt ratio.
General Motors' debt ratio is relatively low. Starting in 2015, its debt ratio was 22.4%. In the next three years, their debt ratio would continually climb until it reached 32.1% in 2018. However, in 2019, General Motors lower its debt ratio back to 28.9%. For most large organizations, they tend to have significant debt as compared to equity. By having a large debt position, the organization can make money on borrowed money.
Further, the companies can exploit tax benefits for interest payments made. A benefit for General Motors' low debt ratio is that they are in a better position to weather recessionary times. A challenge is that the company needs more equity to maintain operations and have any chance at all for future growth.
GM Liquidity Ratios 2019
|Net Working Capital||15,360||13,713|
GM Asset Utilization 2019
|Total Asset Turnover||0.60||0.65|
|Fixed Asset Turnover||3.54||3.79|
|Days Sales Outstanding||88.83||82.90|
|Accounts Receivable Turnover||4.11||4.40|
|Working Capital Turnover||8.93||10.72|
|Average Days Inventory||0.04||0.04|
|Average Days Payable||0.02||0.02|
GM Profitability Ratios 2019
|Return on Assets||2.92%||3.52%|
|Return on Equity||14.51%||18.71%|
|Net Profit Margin||4.86%||5.44%|
|Gross Profit Margin||19.37%||17.95%|
|Operating Profit Margin||5.99%||6.26%|
|Basic Earning Power||3.60%||4.05%|
GM Long-term Debt 2019
|Times Interest Earned||10.51||14.05|
GM Current Ratio 2019
|/ Current Liabilities||84,905||82,237|