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General Motors Co. (GM)

Long-term Debt and Solvency Analysis

Difficulty: Beginner

Solvency ratios also known as long-term debt ratios measure a company’s ability to meet long-term obligations.

General Motors Co., debt and solvency ratios

Ratio	Description	The company
Debt-to-equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	General Motors Co.’s debt-to-equity ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Debt-to-capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	General Motors Co.’s debt-to-capital ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	General Motors Co.’s interest coverage ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

General Motors Co., debt to equity calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Short-term debt and current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Stockholders’ equity
	Ratio
	Debt to equity¹
	Benchmarks
	Debt to Equity, Competitors
	Ford Motor Co.
	Debt to Equity, Sector
	Automobiles & Parts
	Debt to Equity, Industry
	Consumer Goods

2018 Calculations

¹ Debt to equity = Total debt ÷ Stockholders’ equity
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Ratio	Description	The company
Debt-to-equity ratio	A solvency ratio calculated as total debt divided by total shareholders’ equity.	General Motors Co.’s debt-to-equity ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

General Motors Co., debt to capital calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Short-term debt and current portion of long-term debt
	Long-term debt, excluding current portion
	Total debt
	Stockholders’ equity
	Total capital
	Ratio
	Debt to capital¹
	Benchmarks
	Debt to Capital, Competitors
	Ford Motor Co.
	Debt to Capital, Sector
	Automobiles & Parts
	Debt to Capital, Industry
	Consumer Goods

2018 Calculations

¹ Debt to capital = Total debt ÷ Total capital
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Ratio	Description	The company
Debt-to-capital ratio	A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity.	General Motors Co.’s debt-to-capital ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

General Motors Co., interest coverage calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Selected Financial Data (USD $ in millions)
	Net income (loss) attributable to stockholders
	Add: Net income attributable to noncontrolling interest
	Less: Loss from discontinued operations, net of tax
	Add: Income tax expense
	Add: Automotive interest expense
	Earnings before interest and tax (EBIT)
	Ratio
	Interest coverage¹
	Benchmarks
	Interest Coverage, Competitors
	Ford Motor Co.
	Interest Coverage, Sector
	Automobiles & Parts
	Interest Coverage, Industry
	Consumer Goods

2018 Calculations

¹ Interest coverage = EBIT ÷ Interest expense
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Ratio	Description	The company
Interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments.	General Motors Co.’s interest coverage ratio improved from 2016 to 2017 but then deteriorated significantly from 2017 to 2018.

	General Motors Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Long-term Trends
Analysis
Financial Reporting Quality