Yehuan Wu
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Chief executive officer: Daniel F.
Akerson
Location of home office: 300
Renaissance
Center Detroit MI 48265
Ending date of latest fiscal year:
12/31/2012
Principal products or services:
General motors is a vehicle
manufacturer. Their main
product is passenger vehicles
such as cars, light trucks, and
vans.
Main geographic area of activity:
Detroit.
 General
Motors’ independent auditors:
Deloitte & Touche LLP
 Auditors’ words about the General
Motors: According to GM’s consolidated
income statement of 2010, 2011 and 2012,
the company’s net sales and revenues
increased 10.8% at 2011 and increased
1.3% at 2012.
 Stock Price: $33.89,
 General Motors’ twelve
months trading
range: $ 32.99 – 33.93 with average volume
12.37 million shares.
 Dividend per share: 0 (Because the
company didn’t issue dividend in the past
year)
 Date of the above information : Stock Price
May 31, 2013 7:53 p.m
 My opinion about the company’s stock :
Hold
2012
2011
Gross profit
15256
150276
Income from operations
(30363)
5656
Net income
6136
9287
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company’s income from operations
decreases greatly in 2012, which
accounts for the decline of net income in
2012.
 The
format is single step
 General Motors’ gross profit decreased
in the year 2012. Its income from
operations and net income decreased in
2012.
2012
2011
Current Assets
69996
64923
Long-term Assets
37207
8436
Property, plant &
equipment
31079
29795
Intangible Assets
8782
39033
Other Assets
2358
2416
Total Assets
149422
144603
Current Liabilities
53992
53226
Long-term Liabilities
45261
39944
Other Liabilities
13169
12442
Total Liabilities
112422
105612
Contributed capitals
26943
31808
Retained earnings
10057
7183
Shareholders’ Equity
37000
38991
Total Liabilities and Equity
149422
144603
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 According
to GM’s Balance sheet of 2012
and 2011, the company’s total assets and
total liabilities increase while
shareholder’s equity decreases.
 The company’s Long-term assets
increases greatly (about 30000 million)
while Intangible assets decreases almost
the same amount.
2012
2011
Cash flows from operating activities
10605
8166
Cash flows from investing activities
(3505)
(12740)
Cash flows from financing activities
(4741)
(358)
Cash and cash equivalents at end of
period
18422
16071
Cash flows from operating activities is greater than the net income at 2012.
Cash flows from operating activities is less than the net income at 2011.
The company isn’t growing through investing activities.
The company’s primary source of financing is Proceeds from issuance of debt
(original maturities greater than three months)
Overall, cash has increased in 2012.
 Significant
Accounting Policies:
 1.Revenue Recognition
 2. Cash Equivalents
 3. Allowance for Doubtful Accounts
 4. Marketable Securities
 5. Finance Receivables
 6. Inventory
 7. Equipment on Operating Leases, net
 8. Property, net
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 Topics of the notes to the financial statements :
 Note 1. Nature of Operations
 Note 2. Basis of Presentation
 Note 3. Significant Accounting Policies
 Note 4. Acquisition and Disposal of Businesses
 Note 5. GM Financial Finance Receivables, net
 Note 6. Securitizations
 Note 7. Marketable Securities
 Note 8. Inventories
 Note 9. Equipment on Operating Leases, net
 Note 10. Equity in Net Assets of Nonconsolidated
Affiliates
 Note 11. Property, net
 Note 12. Goodwill
 Note 13. Intangible Assets, net
 Note 14. Restricted Cash and Marketable
Securities
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Note 15. Variable Interest Entities
Note 16. Accrued Liabilities, Other Liabilities and Deferred
Income Taxes
Note 17. Short-Term and Long-Term Debt
Note 18. Pensions and Other Postretirement Benefits
Note 19. Derivative Financial Instruments and Risk
Management
Note 20. Commitments and Contingencies
Note 21. Income Taxes
Note 22. Restructuring and Other Initiatives
Note 23. Interest Income and Other Non-Operating Income,
net
Note 24. Stockholders’ Equity and Noncontrolling Interests
Note 25. Earnings Per Share
Note 26. Stock Incentive Plans
Note 27. Ally Financial
Note 28. Supplementary Quarterly Financial Information
(Unaudited)
Note 29. Segment Reporting
Note 30. Supplemental Information for the Consolidated
Statements of Cash Flows
2012
2011
Working Capital (CA-CL)
16004 (69996-53992)
11697 (64923-53226)
Current Ratio (CA/CL)
1.30 (69996/53992)
1.22(64923/53226)
Receivable turnover (Net Credit
Sales/Average AR)
8.96 (93140/10395)
7.68 (76524/9964)
Average days’ sales uncollected
(365/RT)
41 (365/8.96)
48 (365/7.68)
Inventory turnover
(COGS/Average Invt)
8.85 (130220/14714)
7.87 (112730/14324)
Average days’ inventory on hand
(365/ Invt turn)
41
46
Operating cycle
82 (41+41)
94 (48+46)
Payables turnover
(Purchases/Average AP)
5.57 (140236/25160)
5.31 (130386/24551)
Average days’ payables (365/pay 66
turn)
69
 Working
Capital and Current ratio increase
in 2012 because General Motors’ current
assets increase while current liabilities
remain basically the same.
 The company’s receivable turnover
increases by 1.28 in 2012 since its Net
Credit Sales increase by 16616.
 General Motor’s inventory turnover
increases in 2012 due to higher cost of
goods sale in 2012
 The company has a higher payable turnover
since it purchases more in 2012.
2012
2011
Profit margin (Net
Profit/Revenue)
4.08% (6136/150295)
6.23% (9287/148866)
Asset turnover
(Revenue/Assets)
1.01 (150295/149422)
1.03 (148866/144603)
Return on assets (Net
Income/Total Assets)
4.11% (6136/149422)
6.42% (9287/144603)
Return on equity(Net
income/Total SHE)
16.58% (6136/37000)
23.82% (9287/38991)
 The
profit margin is lower in 2012 since
the net profit decreases in this year.
 Asset turnover is lower in 2012 due to the
higher asset in 2012.
 Return on assets and return on equity are
both lower in 2012 as a result of the
decline of net income.
2012
2011
Price/earnings per
share
3.25 (2.63/0.81)
3.88 (3.80/0.98)
Dividend yield
0
0
 Price/earnings
per share decreases in
2012 due to the decline of price
 Dividend yield is 0 in 2011 and 2012 since
General Motors didn’t declare dividends
in both years
2012
2011
Debt to equity (TL/Equity) 3.04 (112422/37000)
2.71 (105612/38991)
Financing gap
(Operation cyclesAverage days pay)
25 (95-69)
 Debt
16 (82-66)
to equity increases in 2012 because the
company’s total liabilities increases by 6807
 Financing gap decreases in 2012 since the
company has a higher operation cycle in 2011.
 In
my opinion, the car industry in 2012 in
USA has recovered faster then people’s
expectations. Most of the car-producing
companies are having a better
performance in 2012. In addition, more
cars’ consumers show up lead to a
higher sale amount in car industry.
 1.General Motors is going to invest more
in China by focusing on products plants
and people
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1.General Motors is going to invest more in China by
focusing on products plants and people. The
company expects industry sales to grow another 7-8
percent in 2013 from Chinese market.
http://media.gm.com/media/us/en/gm/news.detail.html/co
ntent/Pages/news/cn/en/2013/Apr/0420_Growth.html
2. Improve customer satisfaction as evidenced by point of
market share, not fractions.
Each year GM spends billions in advertising and incentives
in the name of marketing. Yet there exist far less expensive,
and far more productive methods of acquiring and retaining
customers. This plan calls for no capital investment and
offers the opportunity for large reductions in marketing
expense.
http://www.generalwatch.com/future.cfm
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1. In my opinion, the company has a backward financing
development in 2012 . Even though its asset increases in
2012, the company’s liabilities increases greatly. In addition,
General Motors has a lower net income in 2012. All these
factors indicate that the company’s prospect is not good.
2.From my perspective, the company may have a lower asset
in the future since the increase in liabilities in 2012.
Moreover, the company will have a lower revenue in the
future. Therefore, the net income will decrease in the future.
3. I wouldn’t recommend to buy General Motor’s share since
the company hasn’t declared dividends in the past few years.
What’s more, price/earnings per share decreases by 16.2%
in 2012