General Motors Automobile Manufacturing

LIQUIDITY

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

Solvency

  • 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

Profitability

  • 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

Made with Adobe Slate

Make your words and images move.

Get Slate

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a Copyright Violation, please follow Section 17 in the Terms of Use.