Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
General Motors Co., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.13 | 1.08 | 1.10 | 1.10 | 1.01 | |
| Quick ratio | 0.90 | 0.83 | 0.86 | 0.84 | 0.79 | |
| Cash ratio | 0.28 | 0.28 | 0.34 | 0.39 | 0.36 |
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).
- Current Ratio
- The current ratio demonstrates a generally positive trend over the analyzed five-year period. Starting at 1.01 in 2020, it increased to 1.1 by 2021 and held steady at 1.1 in 2022. It experienced a slight dip to 1.08 in 2023 before rising to 1.13 in 2024. This indicates a gradual strengthening in the company's ability to cover short-term liabilities with short-term assets, reflecting improved liquidity stability.
- Quick Ratio
- The quick ratio follows a similar upward trajectory, rising from 0.79 in 2020 to 0.84 in 2021, and further to 0.86 in 2022. It then slightly declined to 0.83 in 2023 but rebounded to 0.9 in 2024. This pattern suggests that the company has improved its capacity to meet immediate obligations without relying on inventory, although the minor fluctuations point to some variability in liquid asset availability.
- Cash Ratio
- The cash ratio presents a differing trend compared to the other liquidity measures. It increased modestly from 0.36 in 2020 to 0.39 in 2021, then decreased to 0.34 in 2022. A more pronounced decline followed in 2023, dropping to 0.28, with no improvement in 2024. This indicates a reduction in the company's most liquid assets available to cover current liabilities and may suggest greater reliance on receivables or inventory for liquidity.
Current Ratio
General Motors Co., current ratio 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) | ||||||
| Current assets | 108,545) | 101,618) | 100,451) | 82,103) | 80,924) | |
| Current liabilities | 96,265) | 94,445) | 91,173) | 74,408) | 79,910) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.13 | 1.08 | 1.10 | 1.10 | 1.01 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Ford Motor Co. | 1.16 | 1.20 | 1.20 | 1.20 | 1.20 | |
| Tesla Inc. | 2.02 | 1.73 | 1.53 | 1.38 | 1.88 | |
| Current Ratio, Sector | ||||||
| Automobiles & Components | 1.26 | 1.21 | 1.20 | 1.18 | 1.17 | |
| Current Ratio, Industry | ||||||
| Consumer Discretionary | 1.22 | 1.20 | 1.15 | 1.25 | 1.18 | |
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
Current ratio = Current assets ÷ Current liabilities
= 108,545 ÷ 96,265 = 1.13
2 Click competitor name to see calculations.
- Current assets
- The current assets of the company showed a general upward trend from 2020 to 2024. Starting at 80,924 million US dollars in 2020, they increased steadily each year, reaching 108,545 million US dollars by 2024. This represents a significant growth in available short-term resources over the five-year period.
- Current liabilities
- Current liabilities fluctuated during the period under review. They decreased from 79,910 million US dollars in 2020 to a low of 74,408 million US dollars in 2021. However, starting in 2022, liabilities rose sharply to 91,173 million and continued to increase slightly to 96,265 million US dollars by 2024. This indicates increasing obligations in the most recent years, reversing the earlier downward trend.
- Current ratio
- The current ratio remained relatively stable and slightly improved over the analyzed period. It started at 1.01 in 2020 and increased moderately to 1.13 by 2024, with minor fluctuations in between. This indicates a consistent ability to cover short-term liabilities with short-term assets, with a slight improvement in liquidity position over time.
- Overall analysis
- The data reveals a strengthening liquidity position as evidenced by the growth in current assets and a marginally improved current ratio. Despite an upward trend in current liabilities from 2022 onward, the current ratio above 1 across all years suggests the company maintained sufficient short-term assets to meet its short-term obligations throughout the period. The increasing current assets could indicate effective asset management or growth in cash equivalents and receivables. However, the rise in liabilities since 2022 warrants attention to potential changes in credit policy or increased short-term borrowing.
Quick Ratio
General Motors Co., quick ratio 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) | ||||||
| Cash and cash equivalents | 19,872) | 18,853) | 19,153) | 20,067) | 19,992) | |
| Marketable debt securities | 7,265) | 7,613) | 12,150) | 8,609) | 9,046) | |
| Accounts and notes receivable, net of allowance | 12,827) | 12,378) | 13,333) | 7,394) | 8,035) | |
| GM Financial receivables, net of allowance | 46,362) | 39,076) | 33,623) | 26,649) | 26,209) | |
| Total quick assets | 86,326) | 77,920) | 78,259) | 62,719) | 63,282) | |
| Current liabilities | 96,265) | 94,445) | 91,173) | 74,408) | 79,910) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.90 | 0.83 | 0.86 | 0.84 | 0.79 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Ford Motor Co. | 0.98 | 1.01 | 1.02 | 1.03 | 1.05 | |
| Tesla Inc. | 1.42 | 1.13 | 0.94 | 1.00 | 1.49 | |
| Quick Ratio, Sector | ||||||
| Automobiles & Components | 1.00 | 0.95 | 0.94 | 0.95 | 0.98 | |
| Quick Ratio, Industry | ||||||
| Consumer Discretionary | 0.90 | 0.85 | 0.81 | 0.92 | 0.88 | |
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
Quick ratio = Total quick assets ÷ Current liabilities
= 86,326 ÷ 96,265 = 0.90
2 Click competitor name to see calculations.
The financial data reveals several key trends over the analyzed five-year period. Total quick assets have generally increased, starting from 63,282 million US dollars in 2020 and rising to 86,326 million US dollars by the end of 2024. This upward trajectory suggests an improvement in the company's liquid assets available to meet short-term obligations.
Current liabilities exhibited more variability but an overall increase, moving from 79,910 million US dollars in 2020 to 96,265 million US dollars in 2024. The liabilities increased notably in 2022, which signals heightened financial obligations during that year, and then continued to rise steadily, although at a slower pace, in subsequent years.
The quick ratio, which measures the company's ability to cover its current liabilities with its most liquid assets, shows a positive trend as well. Starting from 0.79 in 2020, the ratio improved to 0.90 by 2024. The ratio peaked slightly in 2022 at 0.86, dipped a bit to 0.83 in 2023, and then rose again in 2024. This indicates a strengthening liquidity position over the period, with the company increasingly better positioned to manage its short-term liabilities.
- Total quick assets
- Demonstrated consistent growth across the period, suggesting enhanced liquidity.
- Current liabilities
- Increased overall, with a notable rise in 2022 and continued growth through 2024.
- Quick ratio
- Improved from below 1.0 to 0.90 by 2024, reflecting better coverage of liabilities by liquid assets, despite minor fluctuations.
Cash Ratio
General Motors Co., cash ratio 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) | ||||||
| Cash and cash equivalents | 19,872) | 18,853) | 19,153) | 20,067) | 19,992) | |
| Marketable debt securities | 7,265) | 7,613) | 12,150) | 8,609) | 9,046) | |
| Total cash assets | 27,137) | 26,466) | 31,303) | 28,676) | 29,038) | |
| Current liabilities | 96,265) | 94,445) | 91,173) | 74,408) | 79,910) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.28 | 0.28 | 0.34 | 0.39 | 0.36 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Ford Motor Co. | 0.36 | 0.40 | 0.45 | 0.55 | 0.51 | |
| Tesla Inc. | 1.27 | 1.01 | 0.83 | 0.90 | 1.36 | |
| Cash Ratio, Sector | ||||||
| Automobiles & Components | 0.44 | 0.43 | 0.45 | 0.52 | 0.51 | |
| Cash Ratio, Industry | ||||||
| Consumer Discretionary | 0.51 | 0.48 | 0.47 | 0.63 | 0.58 | |
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
Cash ratio = Total cash assets ÷ Current liabilities
= 27,137 ÷ 96,265 = 0.28
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited some fluctuations over the observed period. Starting at 29,038 million USD in 2020, there was a slight decrease to 28,676 million USD in 2021, followed by an increase reaching 31,303 million USD in 2022. Thereafter, a decline occurred in 2023 to 26,466 million USD, with a minor recovery to 27,137 million USD in 2024. Overall, total cash assets showed variability but did not demonstrate a sustained upward or downward trend.
- Current Liabilities
- Current liabilities showed a general increasing trend during the period. Beginning at 79,910 million USD in 2020, liabilities decreased slightly to 74,408 million USD in 2021. However, from 2022 onwards, there was a steady rise: 91,173 million USD in 2022, 94,445 million USD in 2023, and reaching 96,265 million USD in 2024. This upward movement suggests growing short-term obligations over the years.
- Cash Ratio
- The cash ratio, which is calculated as total cash assets divided by current liabilities, declined over the period. Starting at 0.36 in 2020, it improved marginally to 0.39 in 2021, reflecting a stronger liquidity position at that time. However, from 2022 onward, a downward trend is noticeable, with the ratio decreasing to 0.34 in 2022 and further to 0.28 in both 2023 and 2024. This indicates a weakening liquidity stance, as cash reserves became relatively smaller in comparison to current liabilities.
- Summary
- In summary, while total cash assets fluctuated without a clear sustained trend, current liabilities increased notably in the latter years. Consequently, the cash ratio declined steadily after 2021, reflecting a potential reduction in short-term liquidity strength. The company’s ability to cover its current obligations with available cash appears to have diminished over the recent years, suggesting an area that may require attention regarding liquidity management.