General Motors Company (GM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 4.25 | 3.89 | 4.10 | 5.22 | 5.46 |
The solvency ratios of General Motors Company indicate its ability to meet its long-term financial obligations and the level of financial risk associated with its capital structure.
The debt-to-assets ratio has remained relatively stable around 0.45 over the past five years, suggesting that the proportion of the company's assets financed by debt has been consistent.
The debt-to-capital ratio has also shown a stable trend, remaining around 0.65, indicating that debt has consistently represented around 65% of the company's total capitalization.
The debt-to-equity ratio has fluctuated over the years, reaching a peak in 2020 at 2.44 before decreasing to 1.89 in 2023. This indicates that the company's reliance on debt relative to equity has varied but has shown a decreasing trend in recent years.
The financial leverage ratio has also exhibited fluctuations, although it has decreased from 5.46 in 2019 to 4.25 in 2023, suggesting a reduction in the company's reliance on debt as a source of financing.
Overall, General Motors Company's solvency ratios indicate a relatively stable and improving financial position in terms of its ability to meet long-term obligations and manage its capital structure effectively over the years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 0.82 | 10.45 | 9.81 | 2.99 | 2.70 |
The interest coverage ratio indicates General Motors' ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher coverage ratio is indicative of a company's stronger ability to meet interest obligations.
In 2023, the interest coverage ratio is not provided, but in 2022 it improved to 21.16, indicating a significant increase in the company's ability to cover its interest expenses. This improvement may suggest better earnings and a stronger financial position, potentially due to increased revenue or cost management.
In 2021, the interest coverage ratio was 13.22, reflecting a slight decrease from the previous year. While still at a respectable level, the decline could be viewed as a sign of a relative weakening in the company's ability to cover its interest expenses compared to the prior year.
In 2020, the interest coverage ratio was 8.53, indicating a lower ability to cover interest expenses compared to the preceding year. This decline could be a concern for investors and creditors as it signals a potential strain on the company's financial position.
In 2019, the interest coverage ratio was 19.12, indicating a strong ability to cover interest expenses. This level of coverage suggests a healthy financial position and the ability to generate sufficient earnings to meet interest obligations.
Overall, the trend in the interest coverage ratio for General Motors shows fluctuations, with a notable improvement in 2022, followed by a slight decline in 2021 and a more significant decrease in 2020. The trend should be interpreted in conjunction with other financial metrics and contextual factors to assess General Motors' overall financial performance and risk.