General Motors Company (GM)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 273,064,000 | 264,037,000 | 244,718,000 | 235,194,000 | 228,037,000 |
| Total stockholders’ equity | US$ in thousands | 64,286,000 | 67,792,000 | 59,744,000 | 45,030,000 | 41,792,000 |
| Financial leverage ratio | 4.25 | 3.89 | 4.10 | 5.22 | 5.46 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $273,064,000K ÷ $64,286,000K
= 4.25
The financial leverage ratio of General Motors Company has shown fluctuations over the past five years. The ratio, which measures the extent to which the company relies on debt financing, increased from 2019 to 2020, reaching 5.46. However, it has since been declining, with the ratio standing at 4.25 as of December 31, 2023. This trend suggests that the company has been decreasing its reliance on debt to finance its operations. A lower financial leverage ratio indicates a lower level of financial risk and greater ability to cover interest and principal payments. However, it's important to note that the optimal level of leverage varies by industry and specific company circumstances. Therefore, while the downward trend in General Motors' financial leverage ratio indicates improved financial stability, further examination of the company's overall financial health and its ability to generate sustainable returns is recommended.
Peer comparison
Dec 31, 2023