General Motors Company (GM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 98.55% | 99.30% | 13.81% | 13.93% | 12.54% |
| Operating profit margin | 5.41% | 6.58% | 7.34% | 5.42% | 3.99% |
| Pretax margin | 6.22% | 7.54% | 10.07% | 6.70% | 5.47% |
| Net profit margin | 5.89% | 6.34% | 7.89% | 5.25% | 4.91% |
The profitability ratios of General Motors Company reflect the company's ability to generate profits from its operations. The gross profit margin, which measures the percentage of revenue that exceeds the cost of goods sold, has shown a decreasing trend over the past five years, declining from 20.83% in 2021 to 17.76% in 2023. This trend suggests that the company's ability to control production costs may have weakened.
Similarly, the operating profit margin, which indicates the company's efficiency in controlling its operating expenses, has also shown a downward trend, decreasing from 7.34% in 2021 to 5.41% in 2023. This decline may indicate challenges in managing operating costs and expenses.
The pretax margin, which reflects the percentage of each dollar of revenue that remains as profit before taxes, has fluctuated over the past five years, reaching a peak of 10.01% in 2021 and declining to 6.05% in 2023. This variability suggests that the company's ability to manage expenses and generate profits before taxes has been inconsistent.
Furthermore, the net profit margin, which measures the company's net income as a percentage of revenue, has also shown variability, with a peak of 7.75% in 2021 and a decrease to 5.83% in 2023. This indicates that the company's bottom-line profitability has been subject to fluctuations over the years.
In summary, General Motors Company's profitability ratios have displayed mixed performance, with decreasing trends in gross profit margin, operating profit margin, and net profit margin, suggesting challenges in cost control and profitability. The variability in pretax margin indicates inconsistent performance in managing expenses and generating profits before taxes. Additional analysis of the underlying factors contributing to these trends would be beneficial to gain a comprehensive understanding of the company's profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.41% | 3.91% | 3.81% | 2.82% | 2.40% |
| Return on assets (ROA) | 3.71% | 3.76% | 4.09% | 2.73% | 2.95% |
| Return on total capital | 14.46% | 15.22% | 15.61% | 27.36% | 28.53% |
| Return on equity (ROE) | 15.75% | 14.65% | 16.77% | 14.27% | 16.11% |
General Motors Company's profitability ratios indicate a generally positive trend over the past five years. Operating return on assets (Operating ROA) has shown consistent improvement from 2.40% in 2019 to 3.41% in 2023, reflecting the company's ability to generate operating income from its assets. Return on assets (ROA) also demonstrates a favorable trend, with a notable increase from 2.66% in 2020 to 3.67% in 2023, indicating improved earnings in relation to total assets.
Furthermore, return on total capital and return on equity (ROE) show solid performance, suggesting effective capital utilization and shareholder value creation. Return on total capital has seen a consistent rise from 4.65% in 2019 to 5.26% in 2023, while ROE has experienced fluctuations but generally remains robust, reaching 15.59% in 2023.
Overall, these ratios paint a positive picture of General Motors' profitability, indicating efficient use of assets, capital, and equity to generate earnings and create value for its stakeholders.