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General motors introduction
General motors introduction
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General Motors - Financial Ratio Analysis
I. General Motors History Highlights
In its early years the automobile industry consisted of hundreds of firms, each
producing a few models. William Durant, who bought and reorganized a failing
Buick Motors in 1904, determined that if several automobile makers would unite,
it would increase the protection for the group. He formed the General Motors
Company in Flint, Michigan, in 1908.
Durant had bought 17 companies (including Oldsmobile, Cadillac, and Pontiac) by
1910, the year a bankers' syndicate forced him to step down. In a 1915 stock
swap, he regained control through Chevrolet, a company he had formed with race
car driver Louis Chevrolet. GM created the GM Acceptance Corporation (auto
financing) and acquired a number of businesses, including Fisher Body,
Frigidaire (sold in 1979), and a small bearing company, Hyatt Roller Bearing.
With the Hyatt acquisition came Alfred Sloan, an administrative genius who would
build GM into a corporate colossus.
Sloan, president from 1923 to 1937, implemented a decentralized management
system, now emulated worldwide. The auto maker competed by offering models
ranging from luxury to economy, colors besides black, and yearly style
modifications. By 1927 it had become the industry leader.
GM introduced a line of front-wheel-drive compacts in 1979. Under Roger Smith,
CEO from 1981 to 1990, GM laid off thousands of workers as part of a massive
companywide restructuring and cost cutting program.
In 1984 GM formed NUMMI with Toyota as an experiment to see if Toyota's
manufacturing techniques would work in the US. The joint venture's first car was
the Chevy Nova. GM bought Ross Perot's Electronic Data Systems (1984) and Hughes
Aircraft (1986). In 1989 the company bought 50% of Saab Automobile.
In 1990 GM launched Saturn, its first new nameplate since 1926, reflecting a new
companywide emphasis on quality. Two years later it made the largest stock
offering in US history, raising $2.2 billion. Culminating a period of boardroom
coups (relating to the company's lagging effort to reduce costs) in the early
1990s, John Smith replaced Robert Stempel as CEO.
NBC apologized in 1993 for improprieties in its expose alleging that GM pickups
equipped with "sidesaddle" gas tanks tended to explode upon side impact. The
government nonetheless asked the ...
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...improved.
The stock holders equity has increased dramatically indicating the
better management of the companies equity.
The EBIT has improved for the last two year mainly because the level of
interest paid has decreased due to the reduction of liabilities.
Profitability
The Gross Profit Margin has increased from 1993 to 1994 as the cost of
goods sold did not increase at the same level that the sales increased. The
Operating Profit Margin ratio was stable in 1995 when compared to 1994 and the
Net Profit Margin has also been improving for the last two years.
The Return on Total Assets has increased due the increase in the
companies profitability, while Return on Equity has decreased on the last two
years as the stockholders equity increased
Overall
It is clear that the profitability of the company has been increasing
for the last 2 years, mainly due to the decrease in liabilities, improvement in
accounts receivable and better management of the company debt..
The company also demonstrates that the profitability can be improved
even further by having better inventory management and productivity maximization
on their fixed assets.
American Motors was formed by the merger of two of these independents: Nash and Hudson. Nash President George Mason and Vice President George Romney saw the inevitable, to survive, the independents had to merge. Mason first talked to Packard who could not agree to a merger. After Mason tired of Packard's reluctance to join, he approached his second choice, Hudson. Hudson President, A.E. Barrit saw that Hudson was quickly losing money and decided that a merger would be the best course of action.
General Motors, like any other business, is exposed to interest rate risks related to certain financial instruments, primarily debt, capital lease obligations and certain marketable securities. As per the GM audited financial statements for 2014, it states “we did not have any interest rate swap positions to manage interest rate exposures in our automotive operations. At December 31, 2014 and 2013 the fair value liability of debt and capital leases was $9.8 billion and $6.8 billion. The potential increase in fair value resulting from a 10% decrease in quoted interest rates would be $0.4 billion and $0.3 billion at December 31, 2014 and 2013. At December 31, 2014 and 2013 we had marketable securities of $8.0 billion and $7.2 billion classified as available-for-sale
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The increased quality and technology of online courses are attracting millions of students to enroll instead of attending traditional schools. More and more students are opting for E-learning convenience despite the complaints of poor quality and high expense. Competition and technological advancement will eventually drive the cost for online education down. Many new educational Internet start-up companies will be providing low cost online courses despite not yet being accredited.
Upon examining P&G’s financial ability to meet short-term obligations, it is apparent that not only have their current liabilities exceeded current assets over the last three years, but close to half of their current assets have been tied up in inventories and other illiquid assets. For example, assessing both the quick and current ratio respectively shows that less than 70% of the firm’s current assets could be converted immediately to pay current commitments, but a little more than 90% of the firm’s liabilities would ultimately be covered. Though, based on industry average similar findings occur; therefore, it must not be uncommon for industries similar to P&G to
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Cridot eppreosel os thi pruciss uf ivelaetong thi cridot wurthoniss uf thi castumir. Eech fonencoel onstotatoun hes ots uwn mithud uf pirfurmong cridot eppreosel woth e sipereti penil uf uffocoels. A fiw fecturs whoch eri siin tu i cunsodirid cummunly thruaghuat ell onstotatouns eri egi, oncumi, netari uf impluymint, end nambir uf dipindents. Cridot eppreosel asaelly hes twu cumpunints: essissong thi ontintoun tu ripey end thi cepecoty tu ripey. Thi ontintoun tu ripey os duni by pirsunel ontirvoiws end foild onvistogetouns. Sonci ot os e hoghly sabjictovi pruciss, ot cennut bi enelysid qaentotetovily end thas I hevi ixcladid ot frum my prujict. Thi cepecoty tu ripey os jadgid by doffirint mithuds fur doffirint typis uf castumirs. Fur piupli bilungong tu thi seleroid cless, pey slops end Furm 16 eri stadoid; fur basonissis, thi Prufot end Luss stetimints, Incumi end Expindotari stetimints, Belenci Shiits eri stadoid.
I take this opportunity to express my most profound appreciation to everyone of those individuals without whose bolster, support and comprehension this project would never have come to its finishing.
Any successful business owner or investor is constantly evaluating the performance of the companies they are involved with, comparing historical figures with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of any company's effectiveness, however, more needs to be looked at than the easily attainable numbers like sales, profits, and total assets. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Financial ratio analysis helps identify and quantify a company's strengths and weaknesses, evaluate its financial position, and shows potential risks. As with any other form of analysis, financial ratios aren't definitive and their results shouldn't be viewed as the only possibilities. However, when used in conjuncture with various other business evaluation processes, financial ratios are invaluable. By examining Ford Motor Company's financial ratios, along with a few other company factors, this report will give a clear picture of how the company is doing now and should do in the future.
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