Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
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- Return on Assets (ROA) since 2010
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- Analysis of Revenues
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Solvency Ratios (Summary)
General Motors Co., solvency ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Debt to Equity
- The debt to equity ratio shows a decreasing trend from 2.44 in 2020 to 1.69 in 2022, indicating a reduction in reliance on debt relative to equity during this period. However, this trend reverses slightly in 2023 and 2024, with the ratio increasing to 1.89 and 2.06 respectively, suggesting a moderate increase in debt levels relative to equity in the most recent years.
- Debt to Equity (Including Operating Lease Liability)
- This ratio closely mirrors the trend of the standard debt to equity ratio, starting at 2.47 in 2020, declining to 1.71 in 2022, then rising to 2.08 by 2024. The inclusion of operating lease liabilities marginally increases the ratio but does not significantly alter the observed pattern.
- Debt to Capital
- The debt to capital ratio declines from 0.71 in 2020 to 0.63 in 2022, suggesting a reduction in the company's leverage and an improvement in capital structure during this timeframe. From 2022 onwards, the ratio rises slightly to 0.67 by 2024, indicating a modest increase in the proportion of debt financing.
- Debt to Capital (Including Operating Lease Liability)
- This metric follows the same trend as the debt to capital ratio, with values beginning at 0.71 in 2020, reducing to 0.63 in 2022, and then moving upward to 0.67 in 2024 when operating lease liabilities are factored in. The adjustments for operating leases have a negligible effect overall.
- Debt to Assets
- The debt to assets ratio exhibits a gradual decrease from 0.47 in 2020 to 0.43 in 2022, indicating a decrease in the proportion of assets financed through debt. After 2022, the ratio slightly rebounds to 0.46 by 2024, reflecting a mild uptick in debt financing against total assets.
- Debt to Assets (Including Operating Lease Liability)
- The trend remains similar when operating lease liabilities are included, starting at 0.47 in 2020, experiencing a slight decrease to 0.44 in 2022, and rising back to 0.47 in 2024, thereby reinforcing the consistency of the debt structure over the years examined.
- Financial Leverage
- Financial leverage decreases notably from 5.22 in 2020 to 3.89 in 2022, indicating a reduction in the degree of leverage employed. Nonetheless, from 2022 onwards, this ratio shows an upward movement, rising to 4.44 by 2024, which suggests an increasing use of debt or other liabilities relative to equity in recent periods.
- Interest Coverage
- Interest coverage displays a significant improvement from 8.37 in 2020 to a peak of 14.39 in 2021, signaling stronger ability to meet interest obligations. Subsequently, it declines gradually to 11.07 by 2024, yet remains above the 2020 level, indicating the company maintains a comfortable buffer for interest payments despite the decrease.
- Fixed Charge Coverage
- This ratio rises from 5.79 in 2020 to 9.47 in 2021, showing enhanced capacity to cover fixed charges early on. The ratio then drops sharply to 4.97 in 2022 but recovers to 8.39 in 2023. Data for 2024 is missing, which limits the ability to discern a continuing trend. Overall, this reflects some volatility in the ability to cover fixed charges during the period.
Debt Ratios
Coverage Ratios
Debt to Equity
General Motors Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity1 | ||||||
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Equity, Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt has shown a consistent upward trend over the period. Starting at 109,894 million US dollars in 2020, it increased slightly to 109,379 million in 2021, then rose more significantly to 114,699 million in 2022. This upward trajectory continued through 2023 and 2024, reaching 129,732 million US dollars. The incremental increases suggest ongoing reliance on debt financing over these years.
- Stockholders’ Equity
- Stockholders’ equity demonstrated a rising trend initially, increasing from 45,030 million US dollars in 2020 to a peak of 67,792 million in 2022. However, following 2022, equity declined to 64,286 million in 2023 and further to 63,072 million in 2024. This reversal after 2022 indicates possible distributions, losses, or changes in valuation impacting equity levels in the latter years.
- Debt to Equity Ratio
- The debt to equity ratio declined from 2.44 in 2020 to a low of 1.69 in 2022, reflecting an improvement in the relative capital structure as equity increased and debt grew at a slower pace. However, from 2022 onwards, the ratio increased again to 1.89 in 2023 and 2.06 in 2024, indicating a heavier reliance on debt relative to equity during these years. This shift aligns with the reversal in equity trends and the continual rise in total debt.
- Overall Analysis
- The financial structure over the five-year span suggests a period of strengthening equity up to 2022, improving leverage ratios initially. Post-2022, the company experienced a modest decline in equity and increased total debt, contributing to a higher debt to equity ratio, signaling a move toward greater financial leverage. This pattern might warrant attention regarding risk and capital management strategies going forward.
Debt to Equity (including Operating Lease Liability)
General Motors Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accrued liabilities) | ||||||
| Non-current operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company's capital structure and leverage over the examined five-year period.
- Total Debt (including operating lease liability)
- The total debt exhibited an overall upward trajectory. Starting at approximately $111 billion in 2020, it experienced a slight decline in 2021, followed by steady increases in the subsequent years, reaching nearly $131 billion by the end of 2024. This progression suggests a strategic increase in borrowing or lease obligations over time.
- Stockholders’ Equity
- Stockholders’ equity displayed growth from 2020 through 2022, rising from about $45 billion to approximately $68 billion. However, this positive momentum reversed in the last two years, with equity contracting to nearly $63 billion by the end of 2024. Such a decline after a period of expansion may reflect changes in retained earnings, dividend distributions, stock buybacks, or other equity-affecting activities.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio demonstrated a general decline from 2.47 in 2020 to its lowest point of 1.71 in 2022, suggesting an improved balance between debt and equity during this interval. However, the ratio increased again in 2023 and 2024, reaching 2.08, corresponding with the increasing total debt and decreasing equity in the latter years. This shift indicates a higher reliance on debt financing relative to equity in the most recent periods.
Overall, the company's leverage profile has fluctuated, with debt levels rising steadily, equity experiencing initial growth then a decline, and the debt-to-equity ratio reflecting these dynamics by initially improving and then deteriorating. These patterns may signal adjustments in financing strategy or responses to market conditions affecting capital structure decisions.
Debt to Capital
General Motors Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Stockholders’ equity | ||||||
| Total capital | ||||||
| Solvency Ratio | ||||||
| Debt to capital1 | ||||||
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Capital, Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt has shown a consistent upward trend over the five-year period. Starting at 109,894 million USD at the end of 2020, it slightly decreased to 109,379 million USD in 2021. However, from 2021 onward, total debt increased steadily, reaching 114,699 million USD in 2022, then 121,741 million USD in 2023, and further rising to 129,732 million USD by the end of 2024. This indicates a growing leverage position over time.
- Total Capital
- Total capital has also shown an increasing pattern throughout the years. It grew from 154,924 million USD at the end of 2020 to 169,123 million USD in 2021, followed by a rise to 182,491 million USD in 2022. The growth continued with 186,027 million USD in 2023 and reached 192,804 million USD in 2024. The steady increase in total capital suggests ongoing investment or retention of earnings contributing to the capital base.
- Debt to Capital Ratio
- The debt to capital ratio decreased from 0.71 at the end of 2020 to 0.65 in 2021, then further declined to 0.63 in 2022, indicating an improvement in the company's capital structure during that period with relatively less reliance on debt. However, this trend reversed slightly in the subsequent years, with the ratio increasing back to 0.65 in 2023 and further to 0.67 in 2024. The increase in this ratio suggests a moderate rise in leverage relative to capital after 2022, though it remains below the initial level observed in 2020.
Debt to Capital (including Operating Lease Liability)
General Motors Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accrued liabilities) | ||||||
| Non-current operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Stockholders’ equity | ||||||
| Total capital (including operating lease liability) | ||||||
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= ÷ =
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
The total debt increased consistently over the analyzed period, rising from $111,072 million in 2020 to $130,947 million in 2024. The growth in debt levels reflects a gradual but steady increase, with the most significant absolute increase occurring between 2023 and 2024.
- Total Capital (including operating lease liability)
-
Total capital also exhibited a continuous upward trend, beginning at $156,102 million in 2020 and reaching $194,019 million in 2024. This steady increase indicates an expansion in the company's capital base over the five-year period, although the rate of increase slowed down in the final year.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio demonstrated an initial decline from 0.71 in 2020 to 0.63 in 2022, suggesting a relative reduction in leverage as total capital grew faster than total debt during this period. However, from 2022 onwards, the ratio increased again to 0.67 by 2024, indicating a rise in the proportion of debt within the capital structure. This shift suggests a moderate increase in financial leverage after 2022.
- Overall Analysis
-
Over the entire period, the company shows a pattern of increasing both debt and capital, with capital growth initially outpacing debt, leading to a decrease in leverage through 2022. Subsequently, debt growth accelerated relative to capital, causing a partial reversal in leverage reduction. The company’s strategy may reflect initial efforts to strengthen the balance sheet, followed by increased borrowing possibly to finance growth initiatives or operational needs beyond 2022.
Debt to Assets
General Motors Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets1 | ||||||
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Assets, Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data exhibits a consistent increase in total debt and total assets over the five-year period ending in 2024. Total debt rose from approximately $109.9 billion in 2020 to about $129.7 billion in 2024, reflecting a steady upward trend. Concurrently, total assets increased from $235.2 billion in 2020 to $279.8 billion in 2024, showing sustained asset growth throughout the period.
The debt to assets ratio shows relatively minor fluctuations, remaining in a narrow range. It started at 0.47 in 2020, decreased slightly to 0.43 by the end of 2022, and then increased back to 0.46 by 2024. This suggests that while both debt and assets increased, the proportion of debt to assets remained generally stable, indicating that the company's leverage level was maintained without significant escalation or reduction.
- Total debt
- Increased steadily each year from 109,894 million USD in 2020 to 129,732 million USD in 2024.
- Total assets
- Also showed a consistent growth trend, rising from 235,194 million USD in 2020 to 279,761 million USD in 2024.
- Debt to assets ratio
- Displayed slight variation but remained stable overall, moving between 0.43 and 0.47, indicating a stable leverage profile despite increases in absolute debt and assets.
Debt to Assets (including Operating Lease Liability)
General Motors Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | ||||||
| Long-term debt, excluding current portion | ||||||
| Total debt | ||||||
| Current operating lease liabilities (included in Accrued liabilities) | ||||||
| Non-current operating lease liabilities | ||||||
| Total debt (including operating lease liability) | ||||||
| Total assets | ||||||
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | ||||||
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | ||||||
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The financial data reflects the company's leverage and asset base over a five-year period from 2020 to 2024. The analysis focuses on total debt, total assets, and the debt to assets ratio including operating lease liabilities.
- Total Debt (including operating lease liability)
- The total debt demonstrates an upward trend over the reported period, increasing from 111.1 billion USD in 2020 to 130.9 billion USD in 2024. There was a slight decline between 2020 and 2021, followed by consistent increases in subsequent years, culminating in the highest debt level at the end of 2024. This gradual rise suggests an increasing reliance on borrowed funds or lease obligations.
- Total Assets
- Total assets also show a positive trend, growing steadily from 235.2 billion USD in 2020 to 279.8 billion USD in 2024. The growth rate of assets appears consistent, with notable increases particularly between 2021 and 2022. The expansion of asset base indicates ongoing investments or accumulation of resources over the five-year span.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio remained relatively stable throughout the period, fluctuating slightly between 0.44 and 0.47. Starting at 0.47 in 2020, it dropped to a low of 0.44 in 2022, reflecting a marginal improvement in asset coverage relative to debt. However, the ratio rose again to 0.47 by 2024, suggesting that debt levels increased at a pace roughly proportional to asset growth.
Overall, the company has experienced growth in both debt and assets, with the debt to assets ratio remaining within a narrow band. This indicates a balanced approach to financing, maintaining consistent leverage while expanding the asset base. The rise in total debt, particularly after 2021, warrants monitoring to ensure sustainable debt management in relation to asset growth.
Financial Leverage
General Motors Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | ||||||
| Stockholders’ equity | ||||||
| Solvency Ratio | ||||||
| Financial leverage1 | ||||||
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Financial Leverage, Sector | ||||||
| Automobiles & Components | ||||||
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total assets
- The total assets have demonstrated a consistent upward trend over the observed periods, increasing from 235,194 million US dollars at the end of 2020 to 279,761 million US dollars by the end of 2024. This steady growth indicates ongoing expansion or acquisition of assets over the five-year span.
- Stockholders' equity
- Stockholders’ equity increased significantly from 45,030 million US dollars in 2020 to a peak of 67,792 million US dollars in 2022. However, it then declined in the subsequent years to 64,286 million in 2023 and further to 63,072 million in 2024. This fluctuation suggests a strengthening capital base through 2022, followed by a moderate reduction in equity levels thereafter.
- Financial leverage
- Financial leverage, expressed as a ratio, decreased notably from 5.22 in 2020 to 3.89 in 2022, reflecting a trend toward lower leverage and potentially reduced financial risk during that period. However, the ratio reversed course thereafter, increasing to 4.25 in 2023 and 4.44 in 2024. This suggests a return to higher leverage levels, implying a subsequent increase in reliance on debt financing relative to equity.
Interest Coverage
General Motors Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Automotive interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Solvency Ratio | ||||||
| Interest coverage1 | ||||||
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Interest Coverage, Sector | ||||||
| Automobiles & Components | ||||||
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Interest coverage = EBIT ÷ Interest expense
= ÷ =
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT showed a significant increase from 9,193 million US dollars in 2020 to a peak of 13,666 million US dollars in 2021. Following this peak, there was a decline over the subsequent years, with EBIT decreasing to 12,584 million in 2022, then further to 11,314 million in 2023, and reaching 9,365 million in 2024. This downward trend from 2021 suggests a reduction in operating profitability over the last three years.
- Automotive interest expense
- The automotive interest expense demonstrated a general decreasing trend from 1,098 million US dollars in 2020 to 846 million in 2024. There was a slight decrease from 2020 to 2021, a minor increase in 2022, followed by consistent declines in 2023 and 2024. This pattern indicates effective management of interest-related costs or changes in debt structure.
- Interest coverage ratio
- The interest coverage ratio exhibited notable fluctuations. It rose substantially from 8.37 times in 2020 to 14.39 times in 2021, reflecting improved capability to meet interest obligations during that period. Afterward, the ratio decreased to 12.75 times in 2022, then to 12.42 times in 2023, and further to 11.07 times in 2024. Despite the decline from the peak, the ratio remained above 11 for the last three years, indicating a relatively strong ability to cover interest payments, though the downward trend is a point for attention.
- Overall insights
- The data reveals a peak in operational earnings in 2021 followed by a steady decline, which may indicate increased costs, market pressures, or other operational challenges. Meanwhile, the consistent reduction in interest expenses suggests improved financial cost management, potentially through refinancing or debt reduction. The interest coverage ratio's initial improvement and subsequent gradual decline mirror the EBIT trend, showing overall strong but weakening interest payment capacity. Continued monitoring of profitability and cost management is advisable to address the declining EBIT and interest coverage ratio.
Fixed Charge Coverage
General Motors Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory income tax rate | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | ||||||
| Add: Net income attributable to noncontrolling interest | ||||||
| Add: Income tax expense | ||||||
| Add: Automotive interest expense | ||||||
| Earnings before interest and tax (EBIT) | ||||||
| Add: Rent expense under operating leases | ||||||
| Earnings before fixed charges and tax | ||||||
| Automotive interest expense | ||||||
| Rent expense under operating leases | ||||||
| Adjustments | ||||||
| Adjustments, tax adjustment1 | ||||||
| Adjustments, after tax adjustment | ||||||
| Fixed charges | ||||||
| Solvency Ratio | ||||||
| Fixed charge coverage2 | ||||||
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Fixed Charge Coverage, Sector | ||||||
| Automobiles & Components | ||||||
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Adjustments, tax adjustment = (Adjustments × U.S. federal statutory income tax rate) ÷ (1 − U.S. federal statutory income tax rate)
= ( × ) ÷ (1 − ) =
2 2024 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= ÷ =
3 Click competitor name to see calculations.
- Earnings before fixed charges and tax
- The earnings before fixed charges and tax showed an increasing trend from 2020 to 2021, rising from 9,510 million US dollars to 13,960 million US dollars. Following this peak, the earnings decreased over the next three years, falling to 12,901 million US dollars in 2022, 11,660 million US dollars in 2023, and further to 9,734 million US dollars in 2024. This indicates a peak in profitability in 2021, followed by a gradual decline toward 2024.
- Fixed charges
- Fixed charges demonstrate a fluctuating pattern over the period. From 2020 to 2021, fixed charges decreased slightly from 1,643 million US dollars to 1,474 million US dollars. However, in 2022, fixed charges nearly doubled to 2,594 million US dollars, followed by a sharp decline to 1,390 million US dollars in 2023. An unusual negative value of -280 million US dollars is reported for 2024, suggesting a potential accounting adjustment, refund, or error that requires further investigation.
- Fixed charge coverage ratio
- The fixed charge coverage ratio shows considerable volatility. It improved significantly from 5.79 in 2020 to 9.47 in 2021, indicating enhanced ability to cover fixed charges with earnings. In 2022, the ratio dropped to 4.97, reflecting increased fixed charges and somewhat reduced earnings. Subsequently, the ratio improved again to 8.39 in 2023. Data for 2024 is not available, likely linked to the irregular fixed charges figure for the same year.