General Motors Co. (NYSE:GM)

The common-size income statement reveals significant shifts in profitability and cost structure over the five-year period. While net sales and revenue are consistently benchmarked at 100%, substantial fluctuations are observed in the percentages of associated costs and income items. A notable trend is the increasing proportion of the cost of sales, coupled with a decline in net income attributable to common stockholders.

Gross Profit Margin

The automotive and other gross margin initially increased from 11.49% in 2021 to 11.87% in 2022, before declining to 10.36% in 2023 and slightly recovering to 11.97% in 2024. However, a significant decrease to 5.26% is observed in 2025, indicating a substantial erosion of profitability at the gross level. This suggests increasing cost pressures or declining pricing power.

Operating Income

Operating income as a percentage of net sales and revenue demonstrates volatility. It peaked at 8.21% in 2021, decreased to 7.16% in 2022, further declined to 5.90% in 2023, increased to 7.45% in 2024, and then experienced a sharp drop to 1.73% in 2025. This pattern mirrors the gross margin trend, but is also influenced by changes in operating expenses.

Cost of Sales & Operating Expenses

Automotive and other cost of sales increased considerably from -88.51% to -94.74% over the period, suggesting a growing proportion of revenue consumed by direct costs. Automotive and other selling, general and administrative expense decreased steadily from -7.53% to -5.17%, indicating some success in controlling overhead costs. However, this reduction was insufficient to offset the rise in cost of sales.

GM Financial Performance

GM Financial’s contribution to net sales and revenue decreased from 11.81% in 2021 to 8.86% in 2022, then stabilized around 9% before increasing to 10.15% in 2025. Simultaneously, GM Financial interest, operating and other expenses increased from -7.56% to -8.51% over the period, suggesting potential challenges in maintaining profitability within this segment.

Non-Operating Income & Equity Income

Interest income and other non-operating income, net, remained relatively stable, fluctuating between 0.73% and 2.68%. However, equity income (loss) experienced a significant swing, moving from a positive 1.15% in 2021 to a negative -2.72% in 2024, before slightly improving to -0.36% in 2025. This volatility in equity income contributed to the overall fluctuations in income before income taxes.

Net Income

Net income attributable to common stockholders declined substantially from 8.66% in 2021 to 1.89% in 2025. This decline is driven by the combined effect of increasing cost of sales, fluctuating operating expenses, and volatility in non-operating income and equity income. The income tax expense percentage also decreased, but not enough to offset the decline in pre-tax income.

Adjustments

The adjustments line item shows variability, moving from -0.16% to 0.29% over the period. The positive adjustment in 2024 and 2025 may indicate gains or reversals of previous losses, but the magnitude is relatively small compared to the overall decline in net income.

In summary, the common-size income statement indicates a deteriorating profitability trend, primarily driven by increasing cost of sales and fluctuating performance in key income segments. While some expense control is evident, it has not been sufficient to maintain profitability levels observed in earlier years. The significant decline in 2025 warrants further investigation.