General Motors is a large automaker with over 335,000 employees. It produces vehicles under brands such as Buick, Cadillac, Chevrolet, and GMC. While GM's sales grew modestly in 2005, its employee numbers increased by 3.4%. The company has various subsidiaries and inventory holdings around the world. GM's profit margins have historically been lower than competitors like Toyota and Honda due to its large investments in financing operations through GMAC. Going forward, GM is seeking to improve its financial position by selling interests in GMAC and developing more hybrid vehicles.

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?