General Motors Operating Activities Analysis

Core Income Sources

Automotive Sales Revenue
  • Proceeds from selling cars
  • Proceeds from aftermarket parts
Revenue from General Motors Financial
Equity Income
  • Interest in other companies

Comprehensive Income Sources

Defined Benefit Plans
  • Pensions
  • Post employment benefits
Foreign Currency Adjustments
  • Resulted in a comprehensive loss from 2013 through 2015
"Other Comprehensive Income"
  • Adjustments to marketable securities

Operating Sources of Income

  • Net Sales of automobiles
  • Net Revenue from General Motors Financial

Non-Operating Sources of Income

  • Equity Income
  • Interest Income
  • Income from available-for-sale marketable securities

Permanent Earnings

  • Sales and revenue
  • Equity Income
  • Interest income from securities

Transitory Earnings

  • Proceeds from termination of leased vehicles
  • Gain/loss on extinguishment of debt
  • Loss from foreign exchange rates

Quality of Earnings

Revenue is recorded when control passes to the carrier
  • General Motors can't legally sell directly to the public
  • All sales are between dealerships and GM
  • Revenue is recognized quickly and is reliable
High Inventory Turnover
  • Shows us that their inventory is turning over in accordance with revenue.
Future Obligations
  • Pensions Contributions and OPEB Payments
  • Deferred Income tax

Implications for Projections of Future Earnings

  • Stable financial position
  • Revenue recognition process is accurate and in accordance with collection of revenue
  • Some discrepancies with future obligations, mainly pensions
  • Effects of recent recall could harm core earnings
  • Effects of Trump Presidency could harm earnings in foreign countries

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