GM Financial Overview Essay -- GCSE Business Marketing Coursework

GM monetary OverviewIntroductionThe General Motors Corporation is a multifaceted company but its prime function is the manufacturing of automobiles and light trucks (SIC 3711). The General Motors stock is listed on the New York Stock Exchange and has approximately 1,426,592,046 outstanding shares on the marketplace, as of 10/14/2001. It is headquartered in Detroit Michigan with offices around the world. General Motors has many other operations besides automobile manufacturing including General Motors Acceptance Corporation fiscal Services, Hughes Electronics Corporation, and the GM Locomotive Group. (Disclosure.com)Financial Statement AnalysisOverall, General Motors has had five profitable years with increasing sales during the same period. GM has also paid a fixed dividend to its shareholders oer the same period. The one-year, which was below just for GM, was 1998. During this period, GM was restructuring its top management and operations and also incurred a union strike of 54 days. However, GM did return to improve performance in 1999 and 2000. GM overall was able to attain a fixed dividend of $2.00 per share and increase the shareholders value over the past five years. The beginning(a) observation from the financial data in appendix one is that General Motors has a low profit margin and is generally less than the industry average each year. The unwavering is able to keep a low profit margin because they have such high sales volumes throughout the world. This strategy tail end be both an asset and liability in business planning. The plus side of the strategy is that GM is able to sell a large human activity of vehicles in the marketplace due to the lower selling price as compared to the competitor. However, the down side of the strategy is that there is a possibility that if sales volumes decrease, the firm can incur a significant decline in the EPS because the profit margin on each item sold is very low. If the global preservation s ours, GM can have a very difficult time meeting shareholder expectations.Another observation is that GM looks to use more debt finance that equity financing for funding their activities. The debt to equity ratio has steadily decreased over the past five years and is higher that the industry average. Also, the current and tender ratios are much lower than the industry averages. This again can pose so... .... 1996 edt. (1997) (page 320). Murray Hill, NJ get to & Bradstreet.Dun & Bradstreet. Industry Norms and Key Business Ratios. 1995 edt. (1996) (page 327). Murray Hill, NJ Dun & Bradstreet.General Motors Corp. (2001, October 14). Retrieved on October 20, 2001 from www.disclosure.com.General Motors Corporation 1998 Annual Report. (1998). (pp. 55 83).General Motors Corporation 1999 Annual Report. (1999). (pp. 53 - 93).General Motors Corporation 2000 Annual Report. (2000). (pp. 41- 79).Standard & curts. General Motors (GM). (1999) Standard Corporation Desc riptions. (pp. 6000 6003) New York, NY McGraw-Hill. Troy, PhD., Leo. Almanac of Business and Industrial Financial Ratios. 32nd edt. (2001) (page 159) Paramus, NJ Prentice Hall.Troy, PhD., Leo. Almanac of Business and Industrial Financial Ratios. 31st edt. (2000) (page 159) Paramus, NJ Prentice Hall. Troy, PhD., Leo. Almanac of Business and Industrial Financial Ratios. 30th edt. (1999) (page 159) Paramus, NJ Prentice Hall.Troy, PhD., Leo. Almanac of Business and Industrial Financial Ratios. twenty-ninth edt. (1998) (page 159) Paramus, NJ Prentice Hall.