General Motors : A World Class Multinational Company Essay

General Motors and Ford Motor Company are one of the top two companies in the motor industry every year. But with every great company it will have it’s ups and downs and with the ratios we have for both companies it will be easier to explain the performance of both companies in depth. The price ratio helps us better understand the future outlook of a company’s stock. And with the Beta it helps us measure the risk of the stock in the company. With both companies there PE ratio fall to the industry average means that they are expected to have a rise in their stock in the future which isn’t necessarily a bad thing. The Beta for the industry average is around 1.41 and if your company has more than that it would be considered a higher risk but with a higher reward, vice versa if your number is lower it has lower risk with little reward. The Beta for GM was 1.42 which means that investing in this company would be more of a risk but in the end it could come with a greater reward. Then with Ford their Beta lies below the line which means their company is low risk low reward. So when picking a company off of this data one would choose GM most likely due to high risk high reward.

1. Reviewing GM’s financial information in GM Exhibit 1 and its stock price in GM Exhibit

General Motors (?GM? or ?the company?) has a rich history longer than a century starting with its corporate organization in 1908. Following its organization, GM acquired its first brand, Old Motor Works, which was followed in 1909 by the purchase of Cadillac for $5.5 million. Two years later, GM organized both General Motors Truck to handle sales of GM?s Rapid and Reliance products and General Motors Export Company to handle export sales out of the US. In 1918, GM purchased Chevrolet Motors. In 1926, GM entered Australia, New Zealand, Japan, Egypt, Uruguay and Argentina through the General Motors Export Company. General Motors Truck became the modern GMC in 1943 when GM acquired the assets of Yellow Truck & Coach. In 1945, GM finally established all of its historical core brands (Buick, Chevrolet, Cadillac, GMC, Oldsmobile, and Pontiac) when the Buick-Oldsmobile-Pontiac Assembly Division, which would be renamed the General Motors Assembly Division in 1965, was formed.

With General Motors participating in a federal government bailout and becoming debt-free, it has set the future standards very high (Kinicki & Williams, 2013). Increasing the profit margin by 4% to provide a 10% profit margin would set GM ahead of other automobile industry competitors. The bailout also released GM from federal corporate taxes for several years in the future. This in itself is a tremendous cost savings.

The current assets are those which are readily convertible into cash and cash equivalents due to their highly liquid nature and also form part of working capital of the company’s operations. However, the long term assets in contrast are not liquid because since they have a useful life of more than a year and hence their full value cannot be easily realized within

Current assets: 2011 Cash and cash equivalents Short-term investments Accounts receivable Prepaid expenses and deposits Loan receivable (note 2) Derivative financial instrument - short term Restricted cash and cash equivalents (note 3) Other assets Capital assets (note 4) $ 13,397 4,130 12,325 17,091 4,290 1,352 52,585 11,808 – 264,350 $ 2010 10,420 10,772 1,739 75,992 – 1,544 100,467 113,040

General Motors (GM) is a motor vehicle company that is involved in designing, manufacturing, marketing, and distributing vehicles and vehicle parts. The company began in Flint, Michigan with founder William “Billy” Durant in 1908. Durant’s philosophy and strategy was to “[build] a car for every purse and purpose” that would change the world of automobiles and transportation for consumers. General Motors entered the global market in 1982 beginning with Zaragoza, Spain and slowly branched out to 35 other countries all across North and South America, Europe, Asia, Africa, and Oceania. Thirteen brands that General Motors produces vehicles for are Alpheon, Chevrolet, Buick, GMC, Cadillac, Holden, HSV, Opel, Vauxhall, Wuling, Baojun, Jie Fang, and UzDaewoo. General Motors proceeded to follow along with technological advances and economy friendly automobiles through series of hydrogen powered fuel-cell vehicles and gas efficient cars.

This report is about the General Motor’s failed corporate culture over the last decade that led to a serious safety defect in millions of vehicles sold around the world that claimed numerous lives. General Motor’s main challenges were dealing with the recall of 2.6 millions vehicles and acknowledging the accusations of employees. There were opportunities given to General Motor’s members and staffs to stand up, speak up and fix a minor problem back then, but no one took the initiative to study all the possibilities surrounding the ignition switch.

While financial statements can be quite extensive, it is important for companies to completely understand all aspects of their statements. In regards to the balance sheet, there are financial ratios that can be computed in order to determine the profitability, liquidity, and solvency of a company. Both Ford and Tesla are large car companies that have lots of assets. By examining the current ratio for both companies, accountants, investors and creditors can assess the liquidity and efficiency for Tesla and Ford to pay off their short-term liabilities with its current assets. The current ratio is a very significant measure tool as these short-term liabilities would be due within the next year. Thus, the companies have a limited time to acquire the funds necessary to pay off the liabilities. Current assets such as cash or cash equivalents can be easily liquidated. Typically, assets on the balance sheet are listed in order of easiest liquidity. If companies have large current assets, then they will be able

Current assets $258M were primarily sources of cash. Current assets $174.3M were primarily sources of cash. Current assets ($61.2M) were primarily uses of cash. Current liabilities ($91.3M) were primarily uses of cash. Current liabilities ($22.5M) were primarily uses of cash. Current liabilities $41M were primarily sources of cash. Overall working capital accounts were sources of cash in Overall working capital accounts were sources of cash in Overall working capital accounts were uses of cash in 1991 at $169.5M. 1990 at $165.9M. 1989 at ($30.7M). Other items affecting cash and not discussed in questions above were proceeds from sale of Class B common stock $5M and purchase of treasury stock ($0.3M) in financing activities. Other items affecting cash and not discussed in questions above were proceeds from sale of Class B common stock $8.7M and purchase of treasury stock ($0.6M) in financing activities. Other items affecting cash and not discussed in questions above were proceeds from sale of Class B common stock $17.5M and purchase of treasury stock ($18.8M) in financing activities.

William Crapo Durant established largest automobile manufacturer in the world, General Motors, in 1908 to produce "Buick automobiles". In the first year of the company, GM had satisfying sales rates and in the advancing years the company merged with other companies, such as Cadillac, Pontiac, Oldsmobile and AC Sparks Plugs. Amalgamation with other companies increased its sales and GM continued to merge with Chevrolet, Vauxhall Motors of Great Britain, Hummer, Isuzu, GMC, Holden and Opel (Flesher et al., 2014). General Motors is a manufacturing company specialising in cars, trucks, automobile parts. GM has more than 205,000 employees in 157 countries and is headquartered in Detroit, the USA. It has five different

Exhibit 6, 8, and 9 (figures in $ millions) provides selected balance sheet items for Ford, General Motors, and DaimlerChrylser. The given information indicates that Ford carries the highest amount of cash and marketable securities among the three companies. In 1999, Ford had $25,173 of cash and marketable securities while General Motors and Daimler-Chrylser have only $12,140 and $9,163. Comparing at an industry level, we as a team

Ford Motor Company is an American automaker and the world 's fifth largest automaker based on worldwide vehicle sales and is the second largest American automaker. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford, on June 16, 1903. In that same year, with 12 investors and 1000 shares, the company had spent almost all of its 28000 dollar cash investment by the time it sold the first Ford Model A on July 23 1903. By October 1 of that same year, Ford Motor Company had turned a profit of 37,000 dollars. By 1904, Ford Motor company built its first international plant in Walkerville, Ontario, right across the Detroit River from Ford’s existing facilities. The company was a separate organization with its own set of shareholders. it was created to sell vehicles not just in Canada, but also all across the British Empire (1904 current British Empire). Over the years Henry Ford Model T then put the world on wheels with a simple, affordable, and durable automobile.

Tobisha, a Japanese multinational conglomerate corporation “that has its hand in everything from installing power lines to supplying iPhone parts (Du),” recently found itself in a major ethics scandal, as the business was discovered overstating its profits by nearly $2 billion over the course of the past seven years. This accounting scandal came to light in February 2015 when the Securities and Exchange Surveillance Commission suspected accounting irregularities within the Tobisha Corporation and launched an in-depth investigation. The Japan Times explained the report and what it found:

Q: 1 Why are Ford and GM entering the Russian car market now? Why did they not invest earlier, and why do they do not postpone investment until the market is bigger?