General Motors Co. (NYSE:GM)

Return on Assets (ROA)

The return on assets showed an overall fluctuation with an initial increase from 2.73% in 2020 to a peak of 4.09% in 2021. Following this, ROA experienced a gradual decline over the subsequent years, decreasing to 3.76% in 2022, 3.71% in 2023, and significantly dropping to 2.15% by 2024. This indicates that asset efficiency improved initially but weakened in later years, suggesting potential challenges in asset utilization or profitability.

Financial Leverage

The financial leverage ratio demonstrated a declining trend from 5.22 in 2020 to 3.89 in 2022, indicating a reduction in the company's reliance on debt or increased equity financing in that period. However, starting from 2022, leverage rose again to 4.25 in 2023 and slightly increased further to 4.44 in 2024. This shift suggests a reversal toward greater use of debt financing or changes in capital structure in more recent years.

Return on Equity (ROE)

Return on equity exhibited a rise from 14.27% in 2020 to a high of 16.77% in 2021, followed by a decrease to 14.65% in 2022. A modest recovery occurred in 2023 with ROE reaching 15.75%, but there was a notable decline to 9.53% in 2024. This trend reflects fluctuating profitability for shareholders, with recent significant weakening of returns that may be associated with the observed changes in asset returns and financial leverage.

Net Profit Margin

The net profit margin demonstrates fluctuation over the analyzed periods. It increased notably from 5.91% in 2020 to 8.82% in 2021, indicating improved profitability. However, this was followed by a decline to 6.9% in 2022 and a further gradual decrease to 6.42% in 2023. By 2024, the margin dropped more significantly to 3.5%, suggesting challenges in maintaining profit efficiency.

Asset Turnover

Asset turnover shows a consistent upward trend, increasing from 0.46 in 2020 and 2021 to 0.55 in 2022, then rising further to 0.58 in 2023, and reaching 0.61 in 2024. This improvement implies enhanced effectiveness in utilizing assets to generate sales over time.

Financial Leverage

Financial leverage experienced a decline from 5.22 in 2020 to 4.1 in 2021, and continued to decrease slightly to 3.89 in 2022. The ratio then increased again to 4.25 in 2023 and to 4.44 in 2024. This pattern indicates a reduction in reliance on debt initially, followed by a moderate increase in leverage in the later years.

Return on Equity (ROE)

ROE increased from 14.27% in 2020 to a peak of 16.77% in 2021, reflecting improved profitability and efficiency in generating shareholder returns. Afterward, it decreased to 14.65% in 2022, then slightly rebounded to 15.75% in 2023. A more noticeable decline occurs in 2024, falling to 9.53%, correlating with the drop in net profit margin and the changes in financial leverage.

Tax Burden

The Tax Burden ratio demonstrates variability over the observed years, initially stable at 0.78 for 2020 and 2021. It then increased significantly to 0.84 in 2022 and peaked at 0.95 in 2023, before declining sharply to 0.7 in 2024. This fluctuation may indicate changes in tax policies or tax planning efficiency over the period.

Interest Burden

The Interest Burden ratio remained relatively stable throughout the period, maintaining a range between 0.88 and 0.93. This consistency suggests a steady level of interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT Margin showed an upward trend from 8.56% in 2020 to a peak of 12.1% in 2021, followed by a steady decline to 8.9% in 2022, 7.36% in 2023, and further down to 5.48% in 2024. This downward trajectory after 2021 points to decreasing operational profitability over the latter years.

Asset Turnover

Asset Turnover exhibited a consistent improvement from 0.46 in 2020 and 2021 to 0.55 in 2022, then progressively increasing to 0.58 in 2023 and 0.61 in 2024. This trend reflects enhanced efficiency in using assets to generate sales.

Financial Leverage

The Financial Leverage ratio decreased notably from 5.22 in 2020 to 4.10 in 2021 and further to 3.89 in 2022, before rising moderately to 4.25 in 2023 and 4.44 in 2024. The initial decline suggests deleveraging efforts, while the later increase may indicate a cautious return to higher leverage.

Return on Equity (ROE)

ROE rose from 14.27% in 2020 to a high of 16.77% in 2021, then declined to 14.65% in 2022 and slightly increased to 15.75% in 2023, before dropping sharply to 9.53% in 2024. This pattern implies fluctuating profitability for shareholders, with a marked decrease in the most recent year.

Net Profit Margin

The net profit margin showed a notable increase from 5.91% in 2020 to a peak of 8.82% in 2021. However, since then, it experienced a downward trend, declining to 6.9% in 2022 and further to 6.42% in 2023, before dropping significantly to 3.5% in 2024. This suggests a weakening profitability relative to revenue in the most recent period.

Asset Turnover

Asset turnover remained stable at 0.46 from 2020 to 2021, then increased steadily over the subsequent years, reaching 0.55 in 2022, 0.58 in 2023, and 0.61 in 2024. This indicates improving efficiency in using assets to generate sales over the analyzed period.

Return on Assets (ROA)

ROA rose from 2.73% in 2020 to a high of 4.09% in 2021, reflecting improved overall asset profitability. Subsequently, it declined slightly to 3.76% in 2022 and 3.71% in 2023, before a more pronounced decrease to 2.15% in 2024. This pattern mirrors the changes in net profit margin, pointing to reduced effectiveness in asset utilization in recent periods despite higher asset turnover.

The financial data reveals several notable trends over the five-year period from 2020 to 2024. Each key financial ratio exhibits distinct patterns that provide insights into operational efficiency and profitability.

Tax Burden

The tax burden ratio shows fluctuations over the period. It remains stable at 0.78 for the first two years, increases to a peak of 0.95 in 2023, before dropping substantially to 0.7 in 2024. This variability suggests changes in the effective tax rate or tax planning strategies over the years.

Interest Burden

The interest burden ratio maintains a relatively stable pattern, ranging narrowly between 0.88 and 0.93. This stability implies consistent management of interest expenses relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin experiences a pronounced decline across the timeframe. After rising from 8.56% in 2020 to a peak of 12.1% in 2021, it declines steadily in subsequent years to 5.48% by 2024. This downward trend indicates decreasing operational profitability and potentially increased costs or pricing pressures.

Asset Turnover

Asset turnover demonstrates a continual upward trend, increasing from 0.46 in 2020 and 2021 to 0.61 by 2024. This improvement suggests enhanced efficiency in generating sales from assets, reflecting better utilization or changes in asset base or revenue composition.

Return on Assets (ROA)

Return on assets exhibits a similar pattern to EBIT margin, increasing initially from 2.73% in 2020 to 4.09% in 2021, then gradually declining to 2.15% in 2024. This decline aligns with the decrease in operational profitability despite improved asset turnover, indicating that increased efficiency is not fully compensating for shrinking margins.

In summary, the data reveals improved asset utilization amid declining profitability measures. The inconsistency in tax burden and stable interest burden ratios further influence net returns. Overall, the trends suggest challenges in maintaining operational margins despite increasingly efficient use of assets over the period analyzed.

Tax Burden

The tax burden ratio exhibited a generally upward trend from 0.78 in 2020 and 2021, increasing to a peak of 0.95 in 2023, before declining to 0.7 in 2024. This indicates that the effective tax rate affecting net income increased over most of the period before easing in the final year.

Interest Burden

The interest burden ratio remained relatively stable over the five-year span, fluctuating slightly between 0.88 and 0.93. It peaked in 2021 at 0.93 and gradually decreased to 0.91 by 2024, implying consistent management of interest expenses in relation to earnings before interest and taxes.

EBIT Margin

The EBIT margin showed significant variation during the period. It rose from 8.56% in 2020 to a high of 12.1% in 2021, followed by a decline to 8.9% in 2022, then further dropped to 7.36% in 2023 and 5.48% in 2024. This downward trend after 2021 suggests increasing costs or pricing pressures affecting operating profitability.

Net Profit Margin

The net profit margin mirrored the EBIT margin trend with an initial rise from 5.91% in 2020 to 8.82% in 2021, then a gradual decrease over the subsequent years to 3.5% in 2024. This reduction in net profitability may reflect rising expenses, including higher tax burden and operational challenges impacting the bottom line.