General Motors Company (GM)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.25 | 3.78 | 3.85 | 3.82 | 3.89 | 3.99 | 3.96 | 4.05 | 4.10 | 4.41 | 4.68 | 4.93 | 5.22 | 5.53 | 6.04 | 6.15 | 5.46 | 5.20 | 5.46 | 5.72 |
The solvency ratios of General Motors Company provide insight into its ability to meet its long-term financial obligations. The debt-to-assets ratio, which measures the proportion of company assets financed by debt, has shown a slightly increasing trend from 0.43 in March 2022 to 0.45 in December 2023, indicating a gradual increase in the utilization of debt to finance assets.
Furthermore, the debt-to-capital ratio, which assesses the proportion of capital structure represented by debt, has also exhibited a slight upward trend from 0.61 in September 2022 to 0.65 in December 2023. This suggests an increasing reliance on debt in the company's capital structure.
The debt-to-equity ratio, a key indicator of financial leverage, has risen from 1.60 in September 2022 to 1.89 in December 2023, reflecting a notable increase in financial leverage and higher dependency on debt financing relative to equity.
Overall, the financial leverage ratio, which reflects the extent to which a company has utilized debt in its capital structure, has shown a steady increase from 3.78 in September 2022 to 4.25 in December 2023, indicating a substantial rise in leverage.
In conclusion, the solvency ratios of General Motors Company demonstrate a consistent upward trend in the utilization of debt for financing, as indicated by the increasing debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios. This raises important considerations regarding the company's long-term solvency and the potential impact on its financial risk profile.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.57 | 3.00 | 11.52 | 10.75 | 10.45 | 9.75 | 8.15 | 8.90 | 9.81 | 10.59 | 12.19 | 8.01 | 6.04 | 3.24 | 1.32 | 6.16 | 7.01 | 8.95 | 8.55 | 7.52 |
The interest coverage ratio measures a company's ability to meet interest payments on its debt obligations. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher ratio indicates that the company is more capable of covering its interest costs.
Looking at the interest coverage ratios for General Motors Company over the past two years, we can see a fluctuating trend. The ratio has shown a substantial improvement from the first quarter of 2022 to the second quarter of 2023, indicating a stronger ability to cover interest expenses. However, it is important to note that the ratio for the most recent quarter (December 2023) is not provided, and this absence of data limits the overall assessment of the company's interest coverage.
The ratios for the second and third quarters of 2023 are particularly noteworthy, as they indicate a significant increase in the ability of the company to cover its interest obligations. This improvement may be attributed to increased earnings or a reduction in interest expenses. However, the significant drop in the interest coverage ratio in the first quarter of 2022 compared to the previous quarter raises concerns about the company's ability to cover its interest costs during that period.
Overall, General Motors' interest coverage has shown fluctuations over the periods provided, with the most recent data missing. This indicates that the company's ability to cover interest expenses has varied, and it is important to continue monitoring this ratio to assess the company's financial health.