Реферат: General Motors Financial Analysis Essay Research Paper

0.03

0.01

Net Profits After Taxes / Stockholders Equity

Return on Equity (ROE)

0.29

0.38

0.44

Net Profits after Taxes / Stockholders Equity

Earnings per Share

7.21

5.15

2.13

Market Price P/ Share of Common Stock / EPS

Price/Earnings Ratio (P/E)

N/A

N/A

N/A

Note : Financial Statements are attached

V. Ratio Analysis

Liquidity

General Motors overall liquidity has decreased when compared to 1994, but is still at a much higher level when compared to 1993. Their net working capital has increased 516% compared to 1993.

Their ability to meet short term obligations is also higher than 1993 by 12 basis points, but is lower than 1994 mainly because their current liabilities increased in a higher pace than their current assets.

The Quick Ratio otherwise did not follow the same trend as the previous ratios, where the difference to 1993 is of only 1 basis point. The difference here is mainly because of the higher amount in inventories that may indicate an increase in inventory prices or volume.

Activity

The inventory liquidity has been declining for the last two years, while the cost of goods sold increased during the same period. This trend indicates that the inventory cost or volume has increased.

The accounts receivable has improved when compared to 1993, where it decreased from 53 to 49 days.

The fixed asset turnover has decreased from 3.90 in 1993 to 2.50 in 1995, which may indicate a higher investment in fixed assets which are not being maximized in productivity.

The Total Asset Turnover has been improving for the last two years because of the better management of current assets..

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