General Motors Company: Financial Analysis

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General Motors Company: Financial Analysis

This paper examined financial analysis for General Motors that is well known as GM.  Company is customer-oriented and its goal is to focus on new products launch as well as on work related issues. However, since beginning GM introduced many products and got successful in market but due to increased level of competitive factors Company has faced hard time to survive in competitive market and its because of few new products launch which resulted as heavy loss and Company’s strategies has failed due to lack of customer satisfaction and decreased the sales value of new products. Currently, company considered cost reduction as primary goal and since 2015 beginning they have been getting good results in industry by reducing the manufacturing cost.

While we look into the financial ratios from the financial report then:

• Current Ratio: In year 2014 it’s recorded as 127% while decreased in 2015 to 109% 
• Quick Ratio: In between 2014 and 2015, Quick Ration decreased by 17% 
• Cash Ratio: Decreased by 10% from 2014 to 2015.
• Profit Margin (PM) and Operating Margin: PM increased by 3% from earlier value that set to 3% but now, in 2015 it becomes 6% and it’s due to continuous optimization in costing i.e. reduced the costing of manufacturing. However, Company is still finding solution for operating margin since operating cost is still in loss and decreased 2% as compare to 2014 that set to 1%.
• Gross Margin: In 2014 recorded gross margin was 9% but in 2015 it has increased to 12% and it’s all happened due to change in its manufacturing operations and Company considered few new technology standards and introduced new machinery to minimize the manual work in order to ensure the cost reduction.

Current Position

Current Ratio: 1.09

Quick Ratio: 0.90

Cash Ratio: 0.35

These liquidity ratios exhibit improvement in the company through their new strategic changes. 

Industrial Comparison for GM Financial Analysis