General Motors Corporation Analysis Essay

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General Motors Corporation Analysis
Sameka Love, Jazmine Thompson, Myreon Pressey
ACC/561
November 11, 20114
Dr. Deborah Burgess
General Motors Corporation Analysis
General Motors is one of the leading car companies in America and spanning the globe marketing the vehicles and innovative style. According to “General Motors” (2014), during the 20th century there were less than 8,000 automobiles in United States of America, some of the automobiles had to operate by steam, electricity, and had gasoline engines. At a New York Auto Show during 1900’s, spectators were amaze with one of the first automobiles. Over the next few years, other companies would create a market for automobiles, which cause an increasing demand for ownership. William “Billy” Durant founded GM on September 16, 1908. He became the foremost manufacturer of horse-drawn vehicles in Flint, MI before making his venture into the automobile industry. In the beginning GM held only the Buick Motor Company, but in a matter of years would acquire more than 20 companies including Oldsmobile, Cadillac, and Oakland, today known as Pontiac.” (History & Heritage)
Importance of comparative and ratio analysis
Companies use comparative ratio analysis to evaluate the company’s fiscal performance. Using a comparative ratio analysis helps determines a reflective suggestion to the company’s business actions, profitability, advantage, and asset use. For instance, usage of the comparative ratio analysis tracks general motors fiscal advantage either quarterly or yearly to determine deterioration or evolution within the company. The comparative ratio analysis also includes details of the company effectiveness of the company assets. In order to determine how the company is performing financially divided the ratios into sets pertaining to asset turnover, profitability, advantage, and liquidity. Based upon the given ratios they explain the diverse data of the accounting business. The results provided by the ratio sets contains the capability to come across requirements of the short term debit, produce revenue of the assets usage, make profit from various goods or particular goods, and use debit within the company (Wise Geek, 2014). General Motors Corporation and other large corporations use financial reports to analyze sustainability by inputting data on income statements, balance sheets, and cash flow statements.
Income Statement The net sales and revenue three month ending in September 30, 2013 the amounts listed in millions as 38,122 and under the heading of costs and expenses 36,108 with a net income of 1,548 and a net income attributable to stockholders 1,560 for automobiles. The net sales and revenue three month ending at September 30, 2014 for 37,999 and under the heading of costs and expenses 36,979 with a net income of 1,276 and a net income attributable to stockholders 1,305 for automobiles. September three month ending 2014 ratio is not yet available.
Balance Sheet
The current assets for three month ending in September 30, 2013 amounts listed millions 64,919 and total assets 130,050. The current assets for three month ending in September 30, 2014 amounts listed millions 68,495 and total assets 135,279. On the balance, sheet under liabilities and equity current liabilities for the three months ending in September 30, 2013 for current liabilities 48,753 and for total liabilities 93,350. In the balance sheet under the heading of liabilities and equity has a current liability in the three months ending in September 30, 2014 the current liabilities 54,193 and for total liabilities 98,473. September three month ending for 2014 ratio is not yet available.

Profitability Ratios

2013
2012
2011
Gross Margin
12%
12%
13%
Operating Margin
3%
3%
4%
Pre-Tax Margin
5%
5%
6%
Profit Margin
3%
3%
6%
Pre-Tax ROE
18%
3%
24%
After Tax ROE
13%
13%
24%

You divide net income by net sales to measure net income generated by each dollar of sales and to measure…