General Motors - Financial Ratio Analysis Essay -- Business Finance Ac

General Motors - Financial proportion AnalysisI. General Motors History HighlightsIn its early geezerhood the gondola industry consisted of hundreds of firms, eachproducing a few models. William Durant, who bought and reorganized a helplessnessBuick Motors in 1904, determined that if several automobile makers would unite,it would append the protection for the group. He formed the General MotorsCompany in Flint, Michigan, in 1908.Durant had bought 17 companies (including Oldsmobile, Cadillac, and Pontiac) by1910, the year a bankers syndicate forced him to step down. In a 1915 stockswap, he regained control through Chevrolet, a company he had formed with racecar driver Louis Chevrolet. GM created the GM acceptance Corporation (autofinancing) and acquired a number of businesses, including Fisher Body,Frigidaire (sold in 1979), and a fine bearing company, Hyatt Roller Bearing.With the Hyatt acquisition came Alfred Sloan, an administrative genius who wouldbuild GM into a corporate c olossus.Sloan, president from 1923 to 1937, implemented a decentralized prudencesystem, now emulated worldwide. The auto maker competed by offering modelsranging from luxury to economy, color besides black, and yearly stylemodifications. By 1927 it had become the industry leader.GM introduced a line of front-wheel-drive compacts in 1979. Under Roger Smith,CEO from 1981 to 1990, GM position off thousands of takeers as part of a massivecompanywide restructuring and cost pungent program.In 1984 GM formed NUMMI with Toyota as an experiment to see if Toyotasmanufacturing techniques would work in the US. The joint ventures start-off car wasthe Chevy Nova. GM bought Ross Perots electronic Data Systems (1984) and HughesAircraft (1986). In 1989 the company bought 50% of Saab Automobile.In 1990 GM launched Saturn, its first new nameplate since 1926, reflecting a newcompanywide emphasis on quality. Two years later it made the largest stockoffering in US history, face lifting $2.2 billio n. Culminating a period of boardroomcoups (relating to the companys lagging effort to reduce costs) in the early1990s, John Smith replaced Robert Stempel as CEO.NBC apologized in 1993 for improprieties in its break down alleging that GM pickupsequipped with sidesaddle gas tanks tended to explode upon side impact. The governance nonetheless asked the ... ...improved.The stock holders lawfulness has increase dramatically indicating the crack heed of the companies equity.The EBIT has improved for the break down two year mainly because the level ofsake paid has decreased due to the reduction of liabilities. net incomeabilityThe Gross Profit gross profit margin has increased from 1993 to 1994 as the cost ofgoods sold did not increase at the same level that the sales increased. TheOperating Profit Margin ratio was stable in 1995 when compared to 1994 and theNet Profit Margin has as well as been improving for the last two years.The Return on Total Assets has increased due the increa se in thecompanies positiveness, while Return on beauteousness has decreased on the last twoyears as the stockholders equity increasedOverallIt is clear that the profitability of the company has been increasingfor the last 2 years, mainly due to the decrease in liabilities, improvement inaccounts receivable and better management of the company debt..The company also demonstrates that the profitability can be improvedeven further by having better inventory management and productivity maximizationon their fixed assets.