General Motors Company (GM)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 9,365,000 | 9,298,000 | 12,584,000 | 13,666,000 | 9,193,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 63,072,000 | 64,286,000 | 67,792,000 | 59,744,000 | 45,030,000 |
| Return on total capital | 14.85% | 14.46% | 18.56% | 22.87% | 20.42% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $9,365,000K ÷ ($—K + $63,072,000K)
= 14.85%
General Motors Company's return on total capital has shown fluctuations over the past five years. In December 2020, the return on total capital was 20.42%, which increased to 22.87% by December 2021, indicating improved capital efficiency. However, in the following years, there was a decline in return on total capital, dropping to 18.56% by December 2022, 14.46% by December 2023, and then slightly increasing to 14.85% by December 2024.
The decreasing trend in return on total capital from 2022 to 2024 suggests that General Motors may be less effective in generating profits relative to the total capital employed. It is essential for the company to assess its capital allocation strategy, operational efficiency, and profitability drivers to enhance returns for its investors and stakeholders. Further analysis and comparison with industry benchmarks may provide valuable insights into General Motors' performance in optimizing its capital resources.
Peer comparison
Dec 31, 2024