Gm Financial Report Analysis

Introduction

General Motors Corp. (NYSE: GM), the world's largest automaker, has been the global industry sales leader for 76 years. General Motors was founded 1908, in Flint, Michigan and currently employs approximately 284,000 people around the world. GM's global headquarters is the Renaissance Center located in Detroit, Michigan, USA, They currently manufacture their cars and trucks in 35 different countries. Its European headquarters are based in Zurich, Switzerland, and its Holden headquarters are located in Melbourne, Victoria, Australia. In 2007, 9.37 million GM cars and trucks were produced globally under the following 12 brands: Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall. GM is also the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea and has had much collaboration with the world's various automakers. This includes product, power train and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan, advanced technology collaborations with Toyota Corporation and DaimlerChrysler AG and BMW AG of Germany and vehicle manufacturing ventures with several of the world's automakers including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AvtoVAZ of Russia, Renault SA of France, and most recently, UzAvtosanoa of Uzbekistan. GM also had collaborations with Fiat S.P.A (see GM/Fiat Premium platform) and Ford Motor Company. To this day, GM retains various stakes in many different automakers.

GM parts and accessories are sold under GM Performance Parts, GM Good wrench and ACDelco brands through GM Service and Parts Operations which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Power train. GM's largest national market is the United States, followed by China, Canada, the United Kingdom, and Germany. GM owns nearly-half (49%) of the finance company GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's On Star subsidiary is a vehicle safety, security and information service provider.

There have only been a limited number of models bearing the General Motors brand. The GM EV1 was an electric vehicle that was offered for lease only in the 1990s, before being unceremoniously scrapped. The Holden Statesman (1971 - 1985) was originally marketed as the General Motors statesman.

Alfred Sloan was picked to take charge of the corporation and led it to its post war global dominance. This unprecedented growth of GM would last through the late 70's and into the early 80's.

The General Motors Aftermarket Business in the US manages four brands; Good wrench, ACDelco, GM Performance Parts and GM Accessories. GM After sales operates globally.

пЃ¬ Individual Analysis

GM

Liquidity Ratios

Liquidity is an important factor in financial statement analysis since an entity that can not meet its short term obligations may be forced into liquidation. The focus of this aspect of analysis is on working capital, or some computer of working capital.

Liquidity Ratios 2007 2006 2005 2004 2003

Current Ratio 0.86 0.97 0.72 0.74 0.81

Quick Ratio 0.94 1.57 2.62 2.96 2.63

Current Ratio is the measure of short-term liquidity. It indicates that the ability of an entity to meet its short-term debts from its current assets.

Quick Ratio is a more rigorous measure of short-term liquidity. It indicates the ability of the entity to meet unexpected demands form liquid current assets.

Leverage

Leverage 2007 2006 2005 2004 2003

gearing 0.19 0.11 0.17 0.25 0.23

Profitability Ratios

Profitability Ratios 2007 2006 2005 2004 2003

Return on total assets 0.016 0.0078 0.0072 0.019 0.021

Return on ordinary equity 0.154 0.075 0.226 0.213 0.383

Return on total assets measures rate of return earned through operating total assets provided by both creditors and owners.

Return on ordinary equity measures rate of return earned on assets provided by owners.

Financial stability Ratios

Financial stability Ratios 2007 2006 2005 2004 2003

Debt Ratio 1.2383 1.0228 0.9668 0.9413 0.9429

Equity Ratio 0.1045 0.0771 0.0307 0.0570 0.0562

Asset turnover Ratio 1.0807 0.6208 0.4038 0.4149 0.4490

Debt ratio measures percentage of assets provided by creditors and extent of using gearing.

Equity Ratio measures percentage of assets provided by shareholders and the extent of using gearing.

Asset turnover Ratio measures the effectiveness of an entity in using its assets during the period.

Cash Sufficiency Ratios

Cash Sufficiency Ratios 2007 2006 2005 2004 2003

Cash Flow Adequacy 1.23 6.87 0.29 0.32 0.13

Debt coverage 2.7946 56.1395 8.9493

Cash Flow Adequacy measures the entity’s ability to cover its main cash requirements.

Debt coverage measures the payback period for coverage of ling-term debt.

Cash Flow Efficiency Ratios

Cash Flow Efficiency Ratios 2007 2006 2005 2004 2003

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