General Motors Company (GM)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.44 | 4.25 | 3.89 | 4.10 | 5.22 |
General Motors Company's solvency ratios show a consistently low level of debt compared to its assets, capital, and equity. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been stable at 0.00 over the past five years. This indicates that General Motors has not relied heavily on debt to finance its operations, which can be a positive sign for investors as it lowers the company's financial risk.
However, it is important to note that the Financial leverage ratio, which measures the company's reliance on debt financing relative to equity, has shown some fluctuation over the five-year period. The ratio decreased from 5.22 in 2020 to 3.89 in 2022 before increasing to 4.44 in 2024. This indicates that the company's level of financial leverage has been slightly volatile, with a significant decrease in leverage in 2022 followed by a gradual increase in subsequent years.
Overall, General Motors' solvency ratios suggest a conservative approach to debt management, with a low level of debt relative to its assets, capital, and equity. However, the fluctuation in the Financial leverage ratio over the years highlights the importance of monitoring the company's debt levels and leverage to ensure sustainable financial health.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 11.07 | 0.82 | 12.75 | 14.39 | 8.37 |
General Motors Company's interest coverage ratio has fluctuated over the past five years.
In December 2020, the interest coverage ratio was 8.37, indicating that the company generated 8.37 times more operating income than the interest expenses. This ratio improved significantly in December 2021 to 14.39, reflecting a healthier financial position and increased ability to cover interest obligations comfortably.
The ratio remained relatively strong in December 2022 at 12.75, suggesting continued operational strength in meeting interest payments. However, there was a significant decline in December 2023 to 0.82, indicating that the company's operating income was only sufficient to cover its interest expenses by a small margin.
General Motors then improved its interest coverage in December 2024 to 11.07, demonstrating a rebound in its ability to service its interest obligations effectively.
Overall, the trend in General Motors Company's interest coverage ratio shows a mixed performance, with periods of both strength and weakness. Investors and analysts should continue to monitor this ratio to assess the company's financial health and debt servicing capabilities.