General Motors Co. (NYSE:GM)

The income tax expense exhibited considerable fluctuation over the five-year period. Current income tax expense generally increased from 2021 to 2023, before decreasing in 2024 and increasing again in 2025. Deferred income tax expense (benefit) demonstrated even more volatility, swinging from substantial expenses to significant benefits.

Current Income Tax Expense

Current income tax expense rose from US$557 million in 2021 to US$1,464 million in 2022, representing a substantial increase. It continued to climb to US$1,604 million in 2023, before declining to US$1,188 million in 2024. A further increase to US$1,587 million was observed in 2025. This suggests a correlation with underlying profitability, though not a direct proportional relationship.

Deferred Income Tax Expense (Benefit)

Deferred income tax expense (benefit) began at US$2,214 million in 2021, then decreased significantly to US$425 million in 2022. A substantial benefit of US$-1,041 million was recorded in 2023, followed by an expense of US$1,368 million in 2024. The final year, 2025, showed a benefit of US$-1,249 million. This volatility likely reflects changes in temporary differences between book and tax accounting, such as changes in tax loss carryforwards or valuation allowances.

Total Income Tax Expense

Total income tax expense peaked at US$2,771 million in 2021, then decreased to US$1,889 million in 2022. A significant decline continued into 2023, reaching US$563 million. The expense increased substantially to US$2,556 million in 2024, but then decreased sharply to US$338 million in 2025. The overall trend indicates a considerable degree of fluctuation, heavily influenced by the deferred tax component. The large swings in total income tax expense suggest significant changes in the company’s taxable income and the utilization of tax benefits or the recognition of tax liabilities.

The interplay between current and deferred tax components resulted in substantial year-over-year changes in the overall income tax expense. The deferred tax component appears to be the primary driver of these fluctuations, indicating a complex tax position and potentially significant tax planning activities.

The effective income tax rate exhibits considerable fluctuation over the five-year period. While the U.S. federal statutory income tax rate remained constant at 21.00%, the effective income tax rate varied significantly, indicating influences beyond the standard corporate rate.

Effective Income Tax Rate Trend

In 2021, the effective income tax rate was 24.28%, exceeding the statutory rate. This suggests the presence of factors increasing taxable income or decreasing tax credits. A substantial decrease was observed in 2022, with the effective income tax rate falling to 17.55%. This decline could be attributed to tax benefits, changes in the geographic mix of earnings, or the impact of discrete tax items.

The effective income tax rate reached its lowest point in 2023 at 5.67%, a significant deviation from both the statutory rate and prior years. This substantial reduction likely resulted from extraordinary items, such as tax benefits related to research and development or significant losses in jurisdictions with lower tax rates. A rebound occurred in 2024, with the effective income tax rate increasing to 19.37%, though still below the statutory rate.

The most recent year, 2025, shows a further adjustment, with the effective income tax rate at 10.80%. This represents a decrease from 2024, but remains higher than the 2023 value. The continued variance from the statutory rate warrants further investigation into the specific components impacting the company’s tax obligations.

The observed volatility in the effective income tax rate suggests that the company’s tax position is sensitive to various factors, including changes in accounting rules, tax legislation, and the geographic distribution of profits. Continued monitoring of this rate, alongside a detailed understanding of its underlying drivers, is recommended.

The composition of deferred tax assets and liabilities exhibits several notable trends over the five-year period. Overall, deferred tax assets consistently exceed deferred tax liabilities, resulting in a net deferred tax asset position throughout the period. Significant components contributing to this position include postretirement benefits, pension plans, warranty provisions, capitalized research expenditures, and operating loss carryforwards.

Postretirement Benefits and Pension Plans

Deferred tax assets related to postretirement benefits other than pensions decreased from US$1,572 million in 2021 to US$1,120 million in 2022, then remained relatively stable around US$1,100 million before increasing to US$1,062 million in 2025. Pension and other employee benefit plans experienced a similar pattern, declining from US$1,540 million in 2021 to US$997 million in 2022, increasing to US$1,522 million in 2023, decreasing again to US$989 million in 2025. These fluctuations likely reflect changes in plan obligations, discount rates, and funding levels.

Warranty and Research Expenditures

Deferred tax assets associated with warranties, dealer and customer allowances, claims, and discounts showed moderate volatility, ranging from US$3,684 million to US$4,803 million. U.S. capitalized research expenditures consistently contributed a substantial portion to deferred tax assets, increasing from US$7,285 million in 2021 to US$10,111 million in 2024 before decreasing slightly to US$9,704 million in 2025. This increase likely reflects ongoing investment in research and development activities.

Operating Loss Carryforwards

Both U.S. and non-U.S. operating loss and tax credit carryforwards represent significant deferred tax assets. U.S. carryforwards increased from US$6,959 million in 2021 to US$7,237 million in 2025, while non-U.S. carryforwards decreased from US$6,593 million to US$5,550 million over the same period. The presence of these carryforwards suggests prior periods of losses that can be utilized to offset future taxable income.

Deferred Revenue

Deferred revenue began to be reported in 2024, starting at US$1,565 million and increasing to US$2,162 million in 2025. This suggests a growing trend in revenue received in advance of providing goods or services.

Valuation Allowances

A valuation allowance against deferred tax assets is maintained, decreasing from US$8,855 million in 2021 to US$6,842 million in 2025. This reduction suggests increasing confidence in the realization of deferred tax assets. However, the substantial size of the allowance indicates continued uncertainty regarding the future generation of sufficient taxable income to utilize all deferred tax assets.

Deferred Tax Liabilities

Deferred tax liabilities, primarily related to property, plant, and equipment and intangible assets, consistently increased in magnitude from 2021 to 2025. Property, plant, and equipment liabilities increased from -US$1,775 million to -US$5,087 million, while intangible asset liabilities increased from -US$729 million to -US$631 million. This increase likely reflects taxable temporary differences arising from the tax treatment of these assets.

Net Deferred Tax Position

The net deferred tax asset position increased from US$20,311 million in 2021 to US$22,376 million in 2025. This overall increase is driven by the growth in deferred tax assets, partially offset by the increasing deferred tax liabilities and the reduction in the valuation allowance.

The deferred tax asset balance exhibited relative stability over the five-year period, fluctuating between approximately US$20.5 billion and US$22.9 billion. A slight decrease was observed from 2021 to 2022, followed by increases in both 2023 and 2025, with 2024 showing a moderate decline. The deferred tax liability balance demonstrated a consistent downward trend throughout the period.

Deferred Tax Assets

The deferred tax asset balance began at US$21.152 billion in 2021. It decreased to US$20.539 billion in 2022, representing a reduction of approximately 2.9%. An increase to US$22.339 billion occurred in 2023, a rise of 8.7% from the prior year. The balance then decreased to US$21.254 billion in 2024, before increasing again to US$22.960 billion in 2025, marking the highest value within the observed timeframe. These fluctuations suggest potential changes in temporary differences or available tax loss carryforwards.

Deferred Tax Liabilities

Deferred tax liabilities decreased steadily from US$841 million in 2021 to US$584 million in 2025. The annual decreases ranged from approximately 3.9% (2022) to 7.3% (2024). This consistent decline indicates a reduction in future taxable amounts arising from temporary differences. The rate of decrease appeared to accelerate in later years.

Net Deferred Tax Position

Considering both assets and liabilities, the net deferred tax position remained significantly positive throughout the period. The difference between deferred tax assets and liabilities widened slightly from US$20.311 billion in 2021 to US$22.376 billion in 2025. This suggests a future overall tax benefit is anticipated, although the realization of this benefit is subject to future profitability and tax regulations.

The observed trends suggest a dynamic interplay between the recognition of temporary differences and the utilization of tax loss carryforwards, impacting the deferred tax asset balance. The consistent reduction in deferred tax liabilities indicates a diminishing source of future taxable amounts. Further investigation into the specific components of these deferred tax items would be necessary to fully understand the underlying drivers of these trends.

The financial information reveals a consistent pattern of adjustments related to deferred tax assets and liabilities across the five-year period. These adjustments significantly impact reported financial statement figures, particularly total assets, stockholders’ equity, and net income attributable to stockholders. The magnitude of these adjustments appears relatively stable over time, suggesting a systematic approach to recognizing and removing deferred tax items.

Total Assets

Reported total assets demonstrate an increasing trend from 2021 to 2024, peaking at US$279,761 million, before experiencing a slight decrease in 2025. However, the adjusted total assets consistently fall below the reported figures, with a difference ranging from approximately US$21 billion in 2021 to US$21.254 billion in 2025. This indicates a substantial reduction in asset values when deferred tax items are removed. The adjusted asset values also show a more moderate growth trajectory compared to the reported values.

Total Liabilities

Similar to total assets, reported total liabilities exhibit an upward trend from 2021 to 2024, reaching US$214,171 million, followed by a modest increase in 2025. The difference between reported and adjusted total liabilities is comparatively small, generally less than US$700 million annually, suggesting that the deferred tax adjustments have a less pronounced effect on liabilities than on assets. The adjusted liability figures closely mirror the reported figures throughout the period.

Stockholders’ Equity

Reported stockholders’ equity fluctuates over the period, peaking at US$67,792 million in 2022 and declining to US$61,119 million in 2025. The adjustments to stockholders’ equity are substantial, with adjusted equity consistently lower than reported equity by a significant margin. The largest difference is observed in 2021, at approximately US$20.311 billion, and remains substantial throughout the period, indicating a considerable impact of deferred tax adjustments on the reported ownership interest in the company. The adjusted equity shows a less volatile pattern than the reported equity.

Net Income Attributable to Stockholders

Reported net income attributable to stockholders declines significantly from 2021 to 2025, falling from US$10,019 million to US$2,697 million. The adjusted net income also shows a declining trend, but the magnitude of the decrease is less pronounced than in the reported figures. The adjustments consistently increase the reported net income, with the largest impact observed in 2021, where the adjustment adds approximately US$2.214 billion to the reported figure. This suggests that the removal of deferred tax items reduces reported profitability.

In summary, the consistent adjustments for deferred tax items result in materially lower reported asset values, stockholders’ equity, and net income. The magnitude of these adjustments remains relatively stable over the observed period, indicating a systematic impact on the financial statements. The adjustments appear to have a greater influence on asset and equity valuations than on liability valuations.

The financial performance metrics demonstrate a notable divergence between reported and adjusted figures when deferred taxes are removed from the calculation. This adjustment consistently impacts profitability and return ratios more significantly than efficiency or leverage metrics. A general trend of declining profitability is observed across all ratios, both reported and adjusted, from 2021 to 2025, though the magnitude of the decline differs.

Profitability

Reported net profit margin decreased substantially from 8.82% in 2021 to 1.61% in 2025. The adjusted net profit margin exhibits a similar downward trajectory, moving from 10.77% to 0.86% over the same period, but remains consistently higher than the reported margin. This suggests that deferred tax assets and liabilities have a considerable effect on reported earnings. The difference between reported and adjusted net profit margin narrows over time, indicating a potentially diminishing impact of deferred taxes or a convergence of underlying profitability.

Asset Efficiency

Reported total asset turnover shows a gradual increase from 0.46 in 2021 to 0.61 in 2023, followed by a slight decrease to 0.60 in 2025. The adjusted total asset turnover mirrors this trend, consistently exceeding the reported value, increasing from 0.51 to 0.66 in 2024, and then decreasing to 0.65 in 2025. The adjustment for deferred taxes appears to modestly improve the perception of asset utilization.

Financial Leverage

Reported financial leverage increases steadily from 4.10 in 2021 to 4.60 in 2025. The adjusted financial leverage is considerably higher, starting at 5.67 in 2021 and rising to 6.67 in 2025. This indicates that the removal of deferred tax effects reveals a greater reliance on debt financing. The widening gap between reported and adjusted leverage suggests that deferred taxes currently reduce the apparent level of financial risk.

Return on Equity (ROE)

Reported ROE declines significantly from 16.77% in 2021 to 4.41% in 2025. The adjusted ROE demonstrates a more pronounced initial value of 31.02% in 2021, but also declines, ending at 3.74% in 2025. The substantial difference between reported and adjusted ROE highlights the significant impact of deferred taxes on equity returns. The rate of decline is faster for adjusted ROE.

Return on Assets (ROA)

Reported ROA decreases from 4.09% in 2021 to 0.96% in 2025. The adjusted ROA follows a similar pattern, starting at 5.47% and falling to 0.56% in 2025. Similar to ROE, the adjustment for deferred taxes substantially increases the initial ROA, but the downward trend remains consistent. The gap between reported and adjusted ROA narrows over the period.

In summary, the adjustments related to deferred taxes consistently present a more favorable picture of asset utilization, but reveal a higher degree of financial leverage and, initially, greater profitability and returns. However, the overall trend across all metrics indicates a weakening financial position from 2021 to 2025, irrespective of the inclusion or exclusion of deferred tax effects.

The period under review demonstrates fluctuating profitability metrics. Reported net income attributable to stockholders experienced a decline from 2021 to 2025, moving from US$10,019 million to US$2,697 million. A similar, though less pronounced, decrease is observed in adjusted net income attributable to stockholders, falling from US$12,233 million in 2021 to US$1,448 million in 2025.

Reported Net Profit Margin

The reported net profit margin exhibited a consistent downward trend throughout the analyzed period. Starting at 8.82% in 2021, it decreased to 6.90% in 2022, 6.42% in 2023, and further to 3.50% in 2024. By 2025, the reported net profit margin had fallen to 1.61%, representing a substantial contraction over the five-year period.

Adjusted Net Profit Margin

The adjusted net profit margin mirrored the trend of the reported net profit margin, although the initial values were higher. Beginning at 10.77% in 2021, the adjusted net profit margin decreased to 7.19% in 2022, 5.76% in 2023, and 4.30% in 2024. The most significant decline occurred between 2024 and 2025, with the adjusted net profit margin dropping to 0.86%.

The difference between reported and adjusted net profit margins remained relatively consistent across the years, suggesting that the adjustments applied do not fundamentally alter the overall profitability trend. The consistent decline in both metrics indicates increasing pressure on profitability, potentially stemming from rising costs, decreased revenues, or a combination of both. The accelerated decline in the final year warrants further investigation to determine the underlying causes.

Margin Relationship

The adjusted net profit margin consistently exceeded the reported net profit margin throughout the period. This indicates that adjustments made to net income positively impacted profitability as measured by this metric. However, both margins experienced similar proportional declines, suggesting the adjustments did not mitigate the overall downward trend in profitability.

An examination of the provided financial information reveals increasing trends in both reported and adjusted total assets between 2021 and 2025. Concurrently, both reported and adjusted total asset turnover ratios demonstrate improvement over the same period, though with some stabilization in the most recent year.

Adjusted Total Assets

Adjusted total assets increased from US$223,566 million in 2021 to US$258,324 million in 2025. The growth was most pronounced between 2021 and 2023, with a more moderate increase observed from 2023 to 2025, indicating a potential slowing in the rate of asset accumulation.

Reported Total Asset Turnover

Reported total asset turnover exhibited a consistent upward trend, rising from 0.46 in 2021 to 0.61 in 2024. However, this ratio experienced a slight decrease to 0.60 in 2025, suggesting a potential stabilization or minor reduction in the efficiency of asset utilization.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrored the trend of the reported ratio, increasing from 0.51 in 2021 to 0.66 in 2024. Similar to the reported ratio, the adjusted ratio also showed a slight decline to 0.65 in 2025. This parallel movement suggests that the changes in asset turnover are not solely attributable to adjustments made to total assets, but rather reflect underlying operational performance. The adjusted ratio consistently exceeds the reported ratio across all periods, indicating that excluding certain asset components results in a more favorable efficiency metric.

Overall, the company demonstrates improving efficiency in utilizing its assets to generate revenue between 2021 and 2024. The slight decrease in both turnover ratios in 2025 warrants further investigation to determine if this represents a temporary fluctuation or the beginning of a more sustained trend.

An examination of the financial information reveals trends in both reported and adjusted asset and equity figures, impacting calculated financial leverage ratios over the five-year period. Reported total assets demonstrate a consistent upward trajectory, increasing from US$244,718 million in 2021 to US$281,284 million in 2025. Reported stockholders’ equity initially increased from 2021 to 2022, peaking at US$67,792 million, but subsequently declined through 2025, ending at US$61,119 million.

Adjusted Total Assets

Adjusted total assets also exhibit an overall increasing trend, rising from US$223,566 million in 2021 to US$258,324 million in 2025. However, the rate of increase appears to moderate in the later years, with a smaller gain between 2024 and 2025 compared to earlier periods.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity follows a similar pattern to its reported counterpart, increasing from US$39,433 million in 2021 to US$47,960 million in 2022, then decreasing to US$38,743 million by 2025. The decline from 2022 to 2025 is more pronounced than the decline observed in reported stockholders’ equity.

Reported Financial Leverage

Reported financial leverage fluctuates between 4.10 and 4.60 over the period. It initially decreases from 4.10 in 2021 to 3.89 in 2022, then increases to 4.44 in 2024 before reaching 4.60 in 2025. This suggests a moderate increase in the proportion of assets financed by equity over the period, followed by a return to higher leverage.

Adjusted Financial Leverage

Adjusted financial leverage demonstrates a more significant and consistent upward trend, increasing from 5.67 in 2021 to 6.67 in 2025. This indicates a growing reliance on debt financing when considering the adjusted figures. The adjusted leverage ratio is consistently higher than the reported leverage ratio throughout the period, suggesting that the adjustments to assets and equity significantly impact the leverage calculation. The increasing trend in adjusted financial leverage is particularly notable, signaling a potential increase in financial risk.

The divergence between reported and adjusted financial leverage suggests that the adjustments made to total assets and stockholders’ equity have a substantial effect on the assessment of the company’s financial risk profile. The consistent increase in adjusted financial leverage warrants further investigation to understand the underlying drivers of these adjustments and their implications for the company’s long-term financial health.

The period between 2021 and 2025 demonstrates fluctuating financial performance as reflected in return on equity metrics. Reported net income attributable to stockholders decreased significantly from 2021 to 2025, while adjusted net income exhibited a similar, though less dramatic, decline. Stockholders’ equity, both reported and adjusted, showed initial increases followed by declines, particularly in the later years of the observed period. These movements significantly impacted the calculated return on equity figures.

Reported Return on Equity (ROE)

Reported ROE began at 16.77% in 2021, decreased to 14.65% in 2022, and then rose slightly to 15.75% in 2023. A substantial decline was then observed, falling to 9.53% in 2024 and further decreasing to 4.41% in 2025. This downward trend aligns with the decreasing reported net income.

Adjusted Return on Equity (ROE)

Adjusted ROE started at a higher level of 31.02% in 2021, then decreased to 21.60% in 2022 and 21.31% in 2023. Similar to the reported ROE, a decline occurred in 2024, reaching 17.37%, and continued to fall sharply to 3.74% in 2025. The adjusted ROE consistently remained higher than the reported ROE throughout the period, indicating the impact of adjustments made to net income and stockholders’ equity.

Relationship between Reported and Adjusted ROE

The difference between reported and adjusted ROE narrowed in 2025. While both metrics decreased, the convergence suggests that the adjustments made to net income and equity had a proportionally smaller effect on the overall ROE calculation in that year. This could be due to the nature of the adjustments themselves, or a change in the underlying financial performance.

Stockholders’ Equity Trends

Reported stockholders’ equity increased from 2021 to 2022, then decreased for the subsequent three years. Adjusted stockholders’ equity followed a similar pattern, increasing from 2021 to 2022, peaking in 2022, and then declining through 2025. The consistent decline in both reported and adjusted equity in the later years may indicate factors such as share repurchases, dividend payments, or accumulated losses.

In summary, the period under review was characterized by a general decline in profitability and equity, resulting in significantly lower returns on equity by 2025. The adjusted ROE consistently provided a more optimistic view of performance than the reported ROE, but both metrics ultimately trended downward.

The period between 2021 and 2025 demonstrates fluctuating financial performance as measured by return on assets. Both reported and adjusted net income attributable to stockholders experienced volatility, impacting the associated ROA figures. Total assets, both reported and adjusted, generally increased over the period, though at a decelerating rate.

Reported Return on Assets (ROA)

Reported ROA began at 4.09% in 2021, decreased to 3.76% in 2022, and remained relatively stable at 3.71% in 2023. A more significant decline was observed in 2024, falling to 2.15%, followed by a further decrease to 0.96% in 2025. This indicates a weakening in profitability relative to reported assets over the five-year period.

Adjusted Return on Assets (ROA)

Adjusted ROA started at 5.47% in 2021, then decreased to 4.25% in 2022 and 3.62% in 2023. Similar to the reported ROA, a substantial decline occurred in 2024, dropping to 2.85%, and continued to decrease to 0.56% in 2025. The adjusted ROA consistently exceeded the reported ROA throughout the period, suggesting that certain adjustments to net income and total assets positively influence profitability metrics.

Net Income Trends

Reported net income attributable to stockholders showed a slight decrease from US$10,019 million in 2021 to US$9,934 million in 2022, followed by a modest increase to US$10,127 million in 2023. However, a substantial decline was observed in 2024 (US$6,008 million) and 2025 (US$2,697 million). Adjusted net income followed a similar pattern, beginning at US$12,233 million in 2021 and decreasing to US$10,359 million in 2022, US$9,086 million in 2023, US$7,376 million in 2024, and finally US$1,448 million in 2025. The magnitude of the decline in both reported and adjusted net income accelerated in the later years of the period.

Asset Trends

Reported total assets increased from US$244,718 million in 2021 to US$264,037 million in 2022 and US$273,064 million in 2023. The rate of increase slowed in 2024 (US$279,761 million) and 2025 (US$281,284 million). Adjusted total assets exhibited a similar trend, rising from US$223,566 million in 2021 to US$243,498 million in 2022 and US$250,725 million in 2023, with slower growth in 2024 (US$258,507 million) and 2025 (US$258,324 million). The stabilization of asset growth in the final two years, coupled with declining net income, likely contributed to the observed decrease in ROA.

The consistent difference between reported and adjusted ROA suggests that the adjustments made to net income and total assets have a material impact on the assessment of financial performance. The significant declines in both reported and adjusted ROA in 2024 and 2025 warrant further investigation to understand the underlying drivers of reduced profitability.