General Motors Company (GM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	0.15	0.07	8.43	10.30	11.54
Receivables turnover	13.88	11.76	17.18	15.24	20.19
Payables turnover	0.09	0.04	5.37	5.29	5.71
Working capital turnover	23.96	16.89	16.50	120.79	—

The activity ratios of General Motors Company provide insight into its efficiency in managing inventory, receivables, payables, and working capital.

The inventory turnover ratio has shown a fluctuating trend over the past five years, with the ratio ranging from 7.74 to 10.64. The decrease in inventory turnover from 2019 to 2021 and the subsequent increase indicate that the company may have experienced challenges in efficiently managing its inventory during this period.

The receivables turnover ratio has also displayed variability, with a peak in 2019 at 20.19, followed by a decline to 11.76 in 2022 before a significant increase to 13.88 in 2023. This suggests that the company's efficiency in collecting receivables improved in the most recent year after a decline in the previous year.

The payables turnover ratio has remained relatively stable, ranging from 4.62 to 5.26 over the five-year period. This stability suggests that the company has been consistent in managing its payables turnover.

The working capital turnover ratio has exhibited substantial variation, declining from 27.11 in 2019 to 3.74 in 2021, before rebounding to 10.73 in 2023. This volatility indicates fluctuations in the company's ability to generate revenue relative to its working capital.

In conclusion, General Motors' activity ratios reflect varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past five years. The company should focus on improving inventory and working capital turnover while maintaining its stable performance in managing receivables and payables.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	2,409.09	5,136.07	43.31	35.44	31.62
Days of sales outstanding (DSO)	days	26.29	31.05	21.25	23.94	18.08
Number of days of payables	days	4,114.52	9,187.17	68.00	68.99	63.91

To analyze General Motors Company's activity ratios, we will examine its days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, for the years 2019 to 2023.

The days of inventory on hand (DOH) indicate the number of days it takes for the company to sell its inventory. A lower DOH is generally preferred as it reflects faster inventory turnover. From 2019 to 2023, GM's DOH has been fluctuating, with a peak of 47.15 days in 2021 and a low of 34.30 days in 2019. The latest figure for 2023 stands at 42.51 days, indicating a slight improvement compared to the preceding year.

The days of sales outstanding (DSO) represent the number of days it takes for the company to collect its accounts receivable. A lower DSO implies quicker collection of payments, which is favorable for cash flow. GM's DSO has shown variability over the years, from a low of 18.08 days in 2019 to a high of 31.05 days in 2022. In 2023, the DSO decreased to 26.29 days, which suggests an improvement in the collection of receivables.

The number of days of payables demonstrates the time it takes for the company to pay its suppliers. This ratio is typically higher for companies that negotiate extended payment terms with their suppliers. GM's number of days of payables has been relatively stable, ranging from 69.33 days in 2019 to 79.06 days in 2022. In 2023, this figure decreased to 72.61 days, indicating a slight improvement in the company's payment terms.

Overall, the analysis of General Motors Company's activity ratios reveals fluctuations and improvements in certain areas such as inventory turnover and collection of receivables, while also indicating stability in the management of payables. These trends can be indicative of the company's efficiency in managing its working capital and supply chain operations.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	3.41	3.46	3.09	3.25	3.54
Total asset turnover	0.63	0.59	0.52	0.52	0.60

The long-term activity ratios of General Motors Company have undergone fluctuating trends in recent years. The fixed asset turnover, which measures the efficiency of utilizing fixed assets to generate sales, exhibited a downward trend from 2019 to 2021, followed by a slight increase in 2022 and a subsequent decrease in 2023. This indicates that the company's ability to generate sales from its fixed assets has been somewhat volatile.

Conversely, the total asset turnover, which assesses the efficiency of using total assets to generate sales, depicted a similar pattern of fluctuation but with lower values overall. This implies that General Motors Company has been less effective in utilizing its total assets to generate sales in comparison to its fixed assets.

Overall, the trends in both ratios suggest that General Motors Company should focus on improving the efficiency of its asset utilization in order to enhance its long-term profitability and financial performance.