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General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
General motors corporation2
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General motors corporation2

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  1. GENERAL MOTORS CORPORATION Erika L. LaMarch Finance 362 Professor Fitzwater
  2. Executives • G. Richard (Rick) Wagoner Jr. Chairman CEO • Frederick A. (Fritz) Henderson Vice Chairman CFO • Ralph J. Szygenda Group VP Information Systems and Services CIO
  3. Company Profile • NYSE • 335,000 Employees • 2005 Growth – 0.5% in Sales – 3.4% in Employees
  4. #1 Producer • Buick • Cadillac • Chevrolet • GMC • Pontiac • Saab • Saturn
  5. Investments • Inventory Subsidiaries • GMAC Finances – Holden – Suzuki Motor – Opel – GM Daewoo Auto& – Vauxhall Technology – CAMI Automotive, Inc. – Fiat GM of Canada Limited – Fuji Heavy Industries – Allison Transmission (Subaru) – Locomotive Manufacturing
  6. Profit Margin=Net Income/Sales 0.1 2003 0.05 2004 2005 0 GM Ford Honda Toyota Sales are lowest for Honda, about equal for Toyota and Ford, and highest for General Motors. In relation to net income, General Motors (and Ford proportionately) have more staggered profit from these sales due to GM’s distinctive investment policy involving mostly financed cars and mortgages through GMAC as opposed to wide ranging alternatives.
  7. Debt Make-Up Projections Debt (See Investments Slide) Capital Lease Obligations Operating Lease Obligations Contractual Commitments for Capital Expenditures Post Retirement Benefits 2006-2007 Debt Breakdown 2005 Debt Breakdown 2008-2009 Debt Breakdown 2010+ Debt Breakdown Assess deviation of investments for different years, and influence of financed assets.
  8. ROA Return on Assets 0.4 0.3 2002 0.2 2003 0.1 2004 0 2005 GM Ford Honda Toyota Industry Again the financing of cars and mortgages in deviating amounts and mystifying patterns causes GM to show a staggered in the area of overall assets’ benefits.
  9. ROE Return on Equity 0.8 0.6 2002 0.4 2003 0.2 2004 0 2005 GM Ford Honda Toyota Industry GM’s built up 2005 dividends were dispersed in the first quarter of 2006.
  10. Receivables Turnover 30 2002 20 2003 10 2004 0 2005 GM Ford Honda Toyota Industry GMAC is doing a good job collecting receivables. Honda and Toyota, with longer lasting vehicles, offer lower payments for longer terms as well.
  11. Average Collection Period 150 100 2003 50 2004 2005 0 GM Ford Honda Toyota This slide proves that Honda and Toyota’s financing plans offer longer terms for their longer lasting vehicles.
  12. Inventory Turnover Ratio 20 15 2003 10 2004 5 2005 0 GM Ford Honda Toyota GM has more cars leftover in inventory between 2005 and 2006 then it did in the past two years.
  13. Total Asset Turnover Ratio 1 2002 0.5 2003 2004 0 2005 GM Ford Honda Toyota Industry Again GM has a investment policy saying, “These assets consist principally of office buildings, warehouses, and machinery and equipment. The use of such entities allows the parties providing the financing to isolate particular assets in a single entity and thereby syndicate the financing to multiple third parties. This is a conventional financing technique used to lower the cost of borrowing and thus, the lease cost to the lessee such as GM (Annual Report 51)”.
  14. Fixed Asset Turnover Ratio 4 3 2002 2 2003 1 2004 0 2005 GM Ford Honda Toyota Industry Differs from total asset turnover ratio, because fixed asset turnover ratio compares sales to the same areas of assets except long term investments, property plant and equipment, goodwill, intangible assets, and accumulated amortization. In other words in the pie graph shown before this section only evaluates the debt section.
  15. Current Ratio 1.5 2002 1 2003 0.5 2004 0 2005 GM Ford Honda Toyota Industry Companies with a current ratio greater than one have more assets then liabilities. Whereas the companies that have a less than one current ratio have more liabilities than assets right now. This ratio is to indicate the liquidity of the firm.
  16. Quick Ratio 1 2002 0.5 2003 2004 0 2005 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Industry Since inventory is meant for sale its function in the current ratio can be taken away to offer the quick ratio which measures all of the assets versus liabilities in the absence of inventory.
  17. Debt to Total Assets Ratio 2 1.5 2003 1 2004 0.5 2005 0 GM Ford Toyota Honda Companies with a debt to total assets ratio greater than one have more liabilities then assets. Whereas the companies that have a less than one current ratio have more assets than liabilities right now. This ratio is to indicate the leverage.
  18. Debt to Equity Ratio 8 6 2003 4 2004 2 2005 0 GM Ford Honda Toyota Companies with a debt to total assets ratio greater than one have more equity then liability. Whereas the companies that have a less than one current ratio have more liability than equity right now. This ratio is to indicate the leverage.
  19. Times Interest Earned 2 1.5 2002 1 2003 0.5 2004 0 2005 GM Ford Industry • Cultural value differences cause Honda and Toyota to have much higher Times Interest Earned. So severe was the difference that I removed these columns.
  20. Fixed Charge Coverage 100 East 50 West North 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Taxes and interest are just getting more expensive relative to GM’s Income before fixed charges and taxes.
  21. Gross Profit Margin 2005 General Motors 2004 2003 0.168 0.17 0.172 0.174 0.176 0.178 0.18 0.182 There is a fear of the car industry slowing based on Wall Street Journal articles as of late which explain the plunging sales of 2005. All things considered GM managed to adjust its other areas to sales to maintain a reasonable profit margin.
  22. Operating Profit Margin 0.15 0.1 2003 0.05 2004 2005 0 GM Ford Honda Toyota Same as gross profit margin minus expenses in General Motors case the expenses at hand are in an account called selling general and administrative.
  23. Debt Repayment in Millions 30000 25000 20000 2006 15000 2007 2008 10000 2009 5000 2010+ 0 Long-Term Debt Payable
  24. Future Endeavors • Need Liquid – Selling Controlling Interest in GMAC – 4 Adjusted Cadillac Body Styles in China – Developing Hybrids – 2007 Line Price Increase • Acquired AT&T’s Controller • Sponsoring On-Demand • Improving Accessories
  25. Suggested Future Endeavors • Merger with Honda or Toyota – Gain Money – Improve Consistency of Financial Analysis &Planning – Take Advantage of Market Surge • Acquire Cultural Advantage • Increase Sales from Increased Product Line • Do NOT pay Dividends Until Stock Value Rises – Lowering Value encourages stockholders to sell – Stockholders will sell if they don’t expect dividend payout
  26. Works Cited http://www.hoovers.com/general-motors/--ID__10640--/free-co- factsheet.xhtml http://finance.yahoo.com/q/is?s=TM&annual http://finance.yahoo.com/q/bs?s=TM&annual http://finance.yahoo.com/q/cf?s=TM&annual http://finance.yahoo.com/q/is?s=HMC&annual http://finance.yahoo.com/q/bs?s=HMC&annual http://finance.yahoo.com/q/cf?s=HMC&annual http://finance.yahoo.com/q/is?s=F&annual http://finance.yahoo.com/q/bs?s=F&annual http://finance.yahoo.com/q/cf?s=F&annual http://finance.yahoo.com/q/is?s=GM&annual http://finance.yahoo.com/q/bs?s=GM&annual http://finance.yahoo.com/q/cf?s=GM&annual
  27. Works Cited • http://web.ebscohost.com/ehost/detail?vid=20&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://web.ebscohost.com/ehost/detail?vid=17&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://web.ebscohost.com/ehost/detail?vid=16&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://web.ebscohost.com/ehost/detail?vid=20&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://web.ebscohost.com/ehost/detail?vid=24&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://web.ebscohost.com/ehost/detail?vid=27&hid=16&sid=297ce265-c258- 45b5-966d-8c8121a66f1b%40sessionmgr102 • http://www.gm.com
  28. For More Information General Motors Corporation 300 Renaissance Center Detroit, MI 48265-3000 http://www.gm.com 313-556-5000 FAX 313-556-5108
  29. Questions?

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