Financial Analysis of General Motors By Anthony Broaddus

Financial Analysis of General Motors By: Anthony Broaddus & Colin Roach BAD 63037 Summer 2011

William “Billy” Durant founded the General Motors Company (GM) on September 16, 1908. He manufactured horse-drawn vehicles in Flint, MI. GM only consisted of the Buick Motor Company at first, but acquired Oldsmobile, Cadillac, and Oakland (Pontiac). A company named Opel joined GM in 1929 with their signature vehicle the Opel-Patent-Motorwagen System Lutzmann.

GM is headquartered at 300 Renaissance Center in Detroit, Michigan. . GM has 205, 000 full-time employees worldwide. They are classified as members of the Consumer Goods Sector within the specific Industry of Auto Manufacturers-Major Category It’s market sectors include Brazil, Canada, China, Germany, Italy the United States , and the United Kingdom.

GM (NYSE: GM, TSX: GMM), consists of three principle segments: • General Motors is a global automaker which brands include Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Opel, Isuzu, Vauxhall, Jiefang, FAW, and Wuling. • The business consists of consumer retail sales, fleet, rental, and leasing of cars and trucks. They also sale and lease to government organizations. • On. Star is a safety, security, and information service sold to the public. • The General Motors Financial Company Inc. purchase automobile finance contracts for vehicles purchased from franchised and independent dealerships.

General Motors Executive structure includes: Mr. Daniel F. Akerson , 62 Chairman, Chief Exec. Officer and Chairman of Exec. Committee Mr. Thomas G. Stephens P. E. , 62 Vice Chairman and Global Chief Technology Officer Mr. Stephen J. Girsky , 49 Vice Chairman of Corp. Strategy Bus. Devel. Global Product Planning & Global Purchasing & Supply Chain, Director, Member of Fin. & Risk Committee and Member of Public Policy Committee Mr. David Nick Reilly , 62 VP and Pres of Gen. Motors Europe Operations Mr. Daniel Ammann , 39 Chief Financial Officer and Sr. VP

General Motors Mission Statement: "G. M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock -holders will receive a sustained superior return on their investment. " General Motors Vision Statement: "Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion. " "GM’s vision is to be the world leader in transportation products and related services. We will earn our customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people. " "Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion. "

Financial Statement Analysis • 2008 – 2010 Global Financial Downturn • U. S. Government took control • 60% ownership • Old GM New GM • November 2010 IPO • 2010 – 50% rise in quarterly earnings

Vertical/Horizontal Analysis 2010 Total Current Assets Total Current Liabilities Total Liabilities 2010 Common 2009 Size Percent 62340 59247 44. 88% 138898 136295 47157 52435 102718 115046 2009 Common Size Percent Trend Analysis 43. 47% 105. 22% 101. 91% 33. 95% 38. 47% 89. 93% 89. 28%

Market Analysis Market Prospect Ratios GM Price-Earnings Ratio Dividend Yield Ford 10. 02 N/A 7. 04 N/A

Liquidity and Efficiency/Comparison Analysis GM Ford Current Ratio 1. 17 2. 17 Quick Ratio 0. 7 2. 07 Accounts Receivable Turnover 16. 7 1. 61 Inventory Turnover 10. 6 19. 06

Solvency Analysis Solvency Ratios GM Ford Debt Ratio 0. 74 1 Equity Ratio 0. 26 -0. 0004 Debt-to-Equity Ratio 2. 84 1 Times Interest Earned 6. 05 2. 12

Conclusion / Past Quarter In the first quarter of 2011, Gm showed 3. 2 billion in earnings in the first quarter, a number that was inflated by 1. 5 billion because of the sale of their interests in Delphi Automotive and Ally Financial (fixed asset turnover-Plant, property, and equip. ). During that time Ford gained a half a point in market share and made 36% more money while GM lost a half a point in market share. GM and its biggest investor, the U. S. Treasury, expanded the initial sale of common equity plus preferred stock, but have tumbled since then. Gm wanted to buy back shares from the Treasury department, but sources say they are reluctant to sell because the price is so low and they don’t want it to appear that GM is getting a preferential treatment.