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Gm Financial Analysis

2581 Words11 Pages

I N T R O The General Motor Company has its roots planted deep into the automotive industry. After the company was founded on September 16th, 1908, they started producing cars under a wide selection of brand names. Over the years it acquired and founded the brands Alpheon, Chevrolet,Buick, GMC, Cadillac, Holden, HSV, Opel, Vauxhall, Wuling, Baojun,Jie Fang, and UzDaewoo. Currently, the General Motor Company holds a majority stake in GM Korea and a 20% stake in IMM (Industries Mécaniques Maghrébines). GM is running its operations out of Detroit Michigan where they own the iconic GM Renissance Center that sits upon the Detroit skyline. They produce their cars out of 396 facilities on six continents manned by 216,000 employees which have collectively …show more content…

The real jem here is the improvement in this ratio over the past four years. In 2014, the year prior, they had a 2.35% margin which was amazingly brought up in one year to 6.35%. Looking through the four years, it is evident that it’s not the top line that is improving this figure, but it’s the bottom line. By bringing their profit up from $3.9 billion to $9.7 billion, they have been able to improve their profit margin. In comparison to the industry (11.32%) and the sector (9.23%), GM isn’t performing too well. It’s the potential of the company if they keep up the trend that will push them ahead of the …show more content…

Although this seems quite subjective, in general, the lower the P/E, the more bang investors are getting for their buck. GM has also been able to bring this number down tremendously over the past four years. Sitting at 72.98 in 2013, then coming down to 52.89 in 2014, and finally ending at 8.86 in 2015, they have proven to shown a strong improvement in this ratio. This large change has mostly to do with their earnings per share. Their EPS has only passed a dollar in 2015, causing every PE ratio before it to be much greater. As they brought their EPS up from 0.54, to 0.56, to 0.66, and finally to 3.84, their price earnings ratio increased respectively. In comparison, the industry P/E ratio is at 13.00. GM is proving to provide a great investment in this

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