General Motors Automobile Manufacturing


  • Decreasing Current and Quick Ratios
  • Minimal difference between Current and Quick Ratios
  • Average Quick Ratio: 1.17
  • Healthy Inventory Turnover Rate


  • Capital-Intense Industry
  • Expectation: High Total and Long-Term Debt/Equity Ratios
  • Recent spike in Debt/Equity
  • Drastic decrease in Shareholder Equity
  • Long-term debts increasing faster than short-term debts
  • Becoming less solvent over time

Financial Leverage

  • GM's increase in long-term debt costs less than an increase in short term debt
  • Could be an indication of future growth
  • Time-Interest Earned 2015 0.84 to¬†2.38 Industry Avg: 7.1
  • Debt/Total Assets has stayed low over the three years
  • These ratios are still far below the industry averages

Asset Efficiency

  • Steady decrease in asset efficiency ratios
  • Expectation: Low Asset Turnover
  • Inventory turnover has stayed level
  • Could be an indication of a strong competitor
  • Increased Average Collection Period
  • Decreased Accounts Receivable Turnover


  • Losses in 2014 due to 8 Million car recall
  • Operating Profit dropped from 3.3% to 0.8%
  • Net Profit and ROA remained linear
  • 2% Loss in ROE
  • Close to $1 loss in EPS
  • Stock Price drop due to the recall.

Market Value

  • P/E Ratio Dropped from 19.97 to 5.57
  • Stock Value remained linear around $34/share
  • Signal of less market-optimism
  • Gross Profit Margin Increased in 2015
  • Operating Profit Margin increased in 2015

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