Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
General Motors Co., solvency ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
Solvency ratios for the analyzed period demonstrate a generally increasing reliance on debt financing, coupled with a declining ability to comfortably meet fixed obligations. Several key metrics indicate a strengthening of financial leverage over the five-year period, while coverage ratios suggest a weakening capacity to service debt.
- Debt Ratios
- The Debt-to-Equity ratio exhibits an upward trend, increasing from 1.83 in 2021 to 2.13 in 2025. A similar pattern is observed when including operating lease liabilities, rising from 1.85 to 2.15 over the same period. Debt-to-Capital ratios also show a modest increase, moving from 0.65 to 0.68 with and without operating lease liabilities. Debt-to-Assets ratios remain relatively stable, fluctuating between 0.45 and 0.47. These trends collectively suggest a growing proportion of debt relative to equity, capital, and assets, indicating increased financial risk.
- Leverage Ratio
- Financial Leverage, measured as total assets to total equity, consistently increases throughout the period, rising from 4.10 in 2021 to 4.60 in 2025. This indicates that the company is utilizing more assets for every dollar of equity, amplifying both potential returns and potential losses.
- Coverage Ratios
- The Interest Coverage ratio, which measures the ability to pay interest expenses from earnings, demonstrates a significant downward trend. It declines from 14.39 in 2021 to 5.29 in 2025. This suggests a diminishing cushion for covering interest obligations. The Fixed Charge Coverage ratio shows considerable volatility, decreasing sharply from 9.47 in 2021 to 4.97 in 2022, recovering to 8.39 in 2023, and then increasing to 8.55 in 2025. The absence of a value for 2024 introduces a gap in the trend analysis, but the overall pattern suggests a potential weakening in the ability to meet all fixed charges, though a recovery is seen in the final year.
In summary, the observed trends indicate a growing reliance on debt financing and a decreasing ability to comfortably cover fixed charges. While debt levels relative to assets remain relatively stable, the increasing leverage and declining coverage ratios warrant continued monitoring.
Debt Ratios
Coverage Ratios
Debt to Equity
General Motors Co., debt to equity calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Stockholders’ equity | 61,119) | 63,072) | 64,286) | 67,792) | 59,744) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 2.13 | 2.06 | 1.89 | 1.69 | 1.83 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Ford Motor Co. | — | 3.54 | 3.49 | 3.21 | 2.85 | |
| Tesla Inc. | 0.10 | 0.11 | 0.08 | 0.07 | 0.23 | |
| Debt to Equity, Sector | ||||||
| Automobiles & Components | — | 1.64 | 1.63 | 1.65 | 1.84 | |
| Debt to Equity, Industry | ||||||
| Consumer Discretionary | — | 1.10 | 1.34 | 1.51 | 1.50 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 130,277 ÷ 61,119 = 2.13
2 Click competitor name to see calculations.
The debt to equity ratio exhibits an increasing trend over the five-year period. Total debt consistently increased year-over-year, while stockholders’ equity experienced fluctuations. This combination resulted in a progressively higher ratio, indicating a growing reliance on debt financing relative to equity.
- Debt to Equity Ratio - Overall Trend
- The debt to equity ratio rose from 1.83 in 2021 to 2.13 in 2025. This represents a 16.4% increase over the period, suggesting a shift in the company’s capital structure towards greater financial leverage.
- Debt Trend
- Total debt increased from US$109,379 million in 2021 to US$130,277 million in 2025. The increase was not linear, with a slightly smaller increase between 2024 and 2025 compared to prior years. This consistent growth in debt suggests ongoing investment or financing activities.
- Stockholders’ Equity Trend
- Stockholders’ equity increased from US$59,744 million in 2021 to US$67,792 million in 2022, but subsequently declined to US$61,119 million in 2025. The peak in 2022 was followed by three consecutive years of decreases, partially offsetting the initial gain and contributing to the rising debt to equity ratio. The decline in equity could be attributed to factors such as share repurchases, dividend payments, or net losses.
The observed trend suggests the company is increasingly financing its operations and growth through debt. While some level of debt is common and can be beneficial, a consistently increasing debt to equity ratio warrants further investigation into the company’s ability to service its debt obligations and manage its financial risk.
Debt to Equity (including Operating Lease Liability)
General Motors Co., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Current operating lease liabilities (included in Accrued liabilities) | 266) | 254) | 264) | 247) | 204) | |
| Non-current operating lease liabilities | 1,035) | 961) | 907) | 967) | 1,012) | |
| Total debt (including operating lease liability) | 131,578) | 130,947) | 122,912) | 115,913) | 110,595) | |
| Stockholders’ equity | 61,119) | 63,072) | 64,286) | 67,792) | 59,744) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 2.15 | 2.08 | 1.91 | 1.71 | 1.85 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | — | 3.59 | 3.53 | 3.25 | 2.87 | |
| Tesla Inc. | 0.18 | 0.19 | 0.15 | 0.13 | 0.29 | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | — | 1.69 | 1.67 | 1.68 | 1.87 | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | — | 1.39 | 1.69 | 1.90 | 1.87 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 131,578 ÷ 61,119 = 2.15
2 Click competitor name to see calculations.
The debt to equity ratio, incorporating operating lease liabilities, exhibits an increasing trend over the observed five-year period. Total debt, inclusive of operating lease obligations, consistently rose from $110.595 billion in 2021 to $131.578 billion in 2025. Simultaneously, stockholders’ equity experienced initial growth, peaking in 2022, but subsequently declined through 2025.
- Debt to Equity Ratio Trend
- The debt to equity ratio began at 1.85 in 2021. A decrease was noted in 2022, with the ratio falling to 1.71. However, from 2022 onward, the ratio increased steadily, reaching 1.91 in 2023, 2.08 in 2024, and culminating at 2.15 in 2025. This indicates a growing reliance on debt financing relative to equity.
- Total Debt
- Total debt demonstrated consistent growth throughout the period, increasing by approximately $21.318 billion from 2021 to 2022, $7.000 billion from 2022 to 2023, $8.035 billion from 2023 to 2024, and a further $0.631 billion from 2024 to 2025. The rate of increase slowed in the final period, but the overall upward trajectory remained.
- Stockholders’ Equity
- Stockholders’ equity increased from $59.744 billion in 2021 to $67.792 billion in 2022, representing a substantial gain. However, this was followed by a decline, with equity decreasing to $64.286 billion in 2023, $63.072 billion in 2024, and finally $61.119 billion in 2025. This decreasing equity contributed to the rising debt to equity ratio.
The combined effect of increasing debt and decreasing equity resulted in a progressively higher debt to equity ratio. This suggests a potential increase in financial risk over the analyzed timeframe, as the company is becoming more leveraged.
Debt to Capital
General Motors Co., debt to capital calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Stockholders’ equity | 61,119) | 63,072) | 64,286) | 67,792) | 59,744) | |
| Total capital | 191,396) | 192,804) | 186,027) | 182,491) | 169,123) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.68 | 0.67 | 0.65 | 0.63 | 0.65 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Ford Motor Co. | — | 0.78 | 0.78 | 0.76 | 0.74 | |
| Tesla Inc. | 0.09 | 0.10 | 0.08 | 0.06 | 0.18 | |
| Debt to Capital, Sector | ||||||
| Automobiles & Components | — | 0.62 | 0.62 | 0.62 | 0.65 | |
| Debt to Capital, Industry | ||||||
| Consumer Discretionary | — | 0.52 | 0.57 | 0.60 | 0.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 130,277 ÷ 191,396 = 0.68
2 Click competitor name to see calculations.
The Debt to Capital ratio exhibits a generally increasing trend over the observed five-year period. While fluctuations occur, the ratio demonstrates a move from 0.65 in 2021 to 0.68 in 2025, indicating a growing reliance on debt financing relative to total capital.
- Total Debt
- Total debt consistently increased from US$109,379 million in 2021 to US$130,277 million in 2025. The rate of increase was most pronounced between 2022 and 2023, with a rise of US$7,042 million, and then again between 2023 and 2024, with an increase of US$8,000 million. The increase from 2024 to 2025 was minimal, at US$545 million.
- Total Capital
- Total capital also increased over the period, moving from US$169,123 million in 2021 to US$191,396 million in 2025. However, the growth was not consistent. The largest increase occurred between 2021 and 2022 (US$13,368 million), while the increase between 2024 and 2025 was a decrease of US$1,408 million.
- Debt to Capital Ratio
- The Debt to Capital ratio initially decreased slightly from 0.65 in 2021 to 0.63 in 2022. It then rose to 0.65 in 2023, continued to 0.67 in 2024, and reached 0.68 in 2025. This suggests that, despite increases in total capital, the growth in total debt has outpaced it, leading to a higher proportion of debt financing. The ratio’s movement indicates a potential shift in the company’s capital structure towards greater leverage.
The observed trend in the Debt to Capital ratio warrants further investigation to understand the underlying drivers of increased debt and the implications for the company’s financial risk profile. The slight decrease in total capital in the final year of the period also merits attention.
Debt to Capital (including Operating Lease Liability)
General Motors Co., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Current operating lease liabilities (included in Accrued liabilities) | 266) | 254) | 264) | 247) | 204) | |
| Non-current operating lease liabilities | 1,035) | 961) | 907) | 967) | 1,012) | |
| Total debt (including operating lease liability) | 131,578) | 130,947) | 122,912) | 115,913) | 110,595) | |
| Stockholders’ equity | 61,119) | 63,072) | 64,286) | 67,792) | 59,744) | |
| Total capital (including operating lease liability) | 192,697) | 194,019) | 187,198) | 183,705) | 170,339) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.68 | 0.67 | 0.66 | 0.63 | 0.65 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | — | 0.78 | 0.78 | 0.76 | 0.74 | |
| Tesla Inc. | 0.15 | 0.16 | 0.13 | 0.11 | 0.23 | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | — | 0.63 | 0.63 | 0.63 | 0.65 | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | — | 0.58 | 0.63 | 0.65 | 0.65 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 131,578 ÷ 192,697 = 0.68
2 Click competitor name to see calculations.
The debt to capital ratio, inclusive of operating lease liabilities, exhibits a generally increasing trend over the five-year period. Total debt and total capital both increased in absolute terms, but the rate of increase in debt slightly outpaced that of capital, resulting in a higher ratio over time.
- Total Debt (including operating lease liability)
- Total debt increased consistently from US$110,595 million in 2021 to US$131,578 million in 2025. The largest absolute increase occurred between 2022 and 2023, with an addition of US$7,000 million. The increase from 2024 to 2025 was minimal, at US$631 million.
- Total Capital (including operating lease liability)
- Total capital also increased over the period, moving from US$170,339 million in 2021 to US$192,697 million in 2025. Growth was most pronounced between 2021 and 2022, adding US$13,366 million. A slight decrease in total capital is observed between 2024 and 2025, with a reduction of US$322 million.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio began at 0.65 in 2021. It decreased slightly to 0.63 in 2022 before resuming an upward trajectory. By 2025, the ratio reached 0.68, representing a 4.6% increase over the five-year period. This indicates a growing reliance on debt financing relative to the company’s capital base. The consistent increase, particularly from 2022 onwards, suggests a potential shift in the company’s financial leverage.
The observed trend in the debt to capital ratio warrants continued monitoring. While the increases are not dramatic, the consistent upward movement suggests a potential increase in financial risk. Further investigation into the drivers of both debt and capital changes would provide a more comprehensive understanding of the company’s solvency position.
Debt to Assets
General Motors Co., debt to assets calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Total assets | 281,284) | 279,761) | 273,064) | 264,037) | 244,718) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.46 | 0.46 | 0.45 | 0.43 | 0.45 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Ford Motor Co. | — | 0.56 | 0.55 | 0.54 | 0.54 | |
| Tesla Inc. | 0.06 | 0.07 | 0.05 | 0.04 | 0.11 | |
| Debt to Assets, Sector | ||||||
| Automobiles & Components | — | 0.43 | 0.42 | 0.43 | 0.45 | |
| Debt to Assets, Industry | ||||||
| Consumer Discretionary | — | 0.32 | 0.34 | 0.35 | 0.36 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 130,277 ÷ 281,284 = 0.46
2 Click competitor name to see calculations.
The Debt-to-Assets ratio exhibits a relatively stable pattern over the five-year period, indicating a consistent level of financial leverage. While fluctuations are present, the ratio remains within a narrow range, suggesting a controlled approach to debt management relative to the company’s asset base.
- Overall Trend
- The Debt-to-Assets ratio demonstrates minimal overall change between 2021 and 2025. It begins at 0.45 in 2021, decreases to 0.43 in 2022, and then returns to 0.45 in 2023. The ratio then increases slightly to 0.46 in both 2024 and 2025, concluding the period.
- Year-over-Year Changes
- A decrease in the ratio is observed from 2021 to 2022, indicating a reduction in debt relative to assets. However, this decrease is offset by increases in subsequent years. The period from 2022 to 2023 shows a return to the initial ratio level. The final two years, 2024 and 2025, display a slight increase, though the ratio remains consistent at 0.46.
- Debt and Asset Movements
- Total debt consistently increased throughout the period, rising from US$109,379 million in 2021 to US$130,277 million in 2025. Total assets also increased, moving from US$244,718 million in 2021 to US$281,284 million in 2025. The relatively stable Debt-to-Assets ratio suggests that asset growth has largely kept pace with debt accumulation.
The consistency in the Debt-to-Assets ratio suggests a deliberate strategy to maintain a specific level of financial leverage. The slight upward trend in the final two years warrants continued monitoring to ensure it does not indicate a shift towards increased risk.
Debt to Assets (including Operating Lease Liability)
General Motors Co., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Short-term debt and current portion of long-term debt | 35,668) | 39,432) | 38,968) | 38,778) | 33,720) | |
| Long-term debt, excluding current portion | 94,609) | 90,300) | 82,773) | 75,921) | 75,659) | |
| Total debt | 130,277) | 129,732) | 121,741) | 114,699) | 109,379) | |
| Current operating lease liabilities (included in Accrued liabilities) | 266) | 254) | 264) | 247) | 204) | |
| Non-current operating lease liabilities | 1,035) | 961) | 907) | 967) | 1,012) | |
| Total debt (including operating lease liability) | 131,578) | 130,947) | 122,912) | 115,913) | 110,595) | |
| Total assets | 281,284) | 279,761) | 273,064) | 264,037) | 244,718) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.47 | 0.47 | 0.45 | 0.44 | 0.45 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Ford Motor Co. | — | 0.56 | 0.55 | 0.55 | 0.54 | |
| Tesla Inc. | 0.11 | 0.11 | 0.09 | 0.07 | 0.14 | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Automobiles & Components | — | 0.44 | 0.43 | 0.44 | 0.46 | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Consumer Discretionary | — | 0.41 | 0.43 | 0.44 | 0.44 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 131,578 ÷ 281,284 = 0.47
2 Click competitor name to see calculations.
The Debt to Assets ratio, including operating lease liability, exhibits a generally stable pattern over the five-year period. Total debt consistently increased year-over-year, while total assets also demonstrated growth, resulting in a relatively consistent ratio value.
- Overall Trend
- The Debt to Assets ratio remained within a narrow range, fluctuating between 0.44 and 0.47. This suggests a consistent level of financial leverage throughout the analyzed period. The ratio initially decreased slightly from 0.45 in 2021 to 0.44 in 2022, then stabilized around 0.45 in 2023 before increasing to 0.47 in both 2024 and 2025.
- Debt Growth
- Total debt increased from US$110,595 million in 2021 to US$131,578 million in 2025, representing a cumulative increase of approximately 18.9%. The largest single-year increase occurred between 2022 and 2023, with an increase of US$6,999 million. Growth slowed between 2023 and 2024, and again between 2024 and 2025.
- Asset Growth
- Total assets grew from US$244,718 million in 2021 to US$281,284 million in 2025, a cumulative increase of approximately 14.9%. Asset growth was most pronounced between 2021 and 2022, with an increase of US$19,319 million. Growth rates decelerated in subsequent years.
- Ratio Implications
- The consistent Debt to Assets ratio indicates that the company’s debt levels have grown in proportion to its asset base. The slight increase in the ratio in the final two years suggests a marginally higher reliance on debt financing relative to assets, though the change remains modest. A ratio consistently around 0.45-0.47 suggests that approximately 45-47% of the company’s assets are financed by debt.
In summary, the solvency position, as measured by the Debt to Assets ratio, appears stable over the observed period, with a slight increase in leverage towards the end of the period. Both debt and asset levels have increased, maintaining a consistent capital structure.
Financial Leverage
General Motors Co., financial leverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 281,284) | 279,761) | 273,064) | 264,037) | 244,718) | |
| Stockholders’ equity | 61,119) | 63,072) | 64,286) | 67,792) | 59,744) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 4.60 | 4.44 | 4.25 | 3.89 | 4.10 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Ford Motor Co. | — | 6.36 | 6.39 | 5.92 | 5.30 | |
| Tesla Inc. | 1.68 | 1.67 | 1.70 | 1.84 | 2.06 | |
| Financial Leverage, Sector | ||||||
| Automobiles & Components | — | 3.80 | 3.85 | 3.87 | 4.07 | |
| Financial Leverage, Industry | ||||||
| Consumer Discretionary | — | 3.44 | 3.95 | 4.32 | 4.22 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 281,284 ÷ 61,119 = 4.60
2 Click competitor name to see calculations.
An examination of the provided financial information reveals trends in the company’s financial leverage over a five-year period. Total assets exhibited a consistent upward trajectory, increasing from US$244,718 million in 2021 to US$281,284 million in 2025. Stockholders’ equity, however, demonstrated more volatility, rising to US$67,792 million in 2022 before declining to US$61,119 million in 2025. The financial leverage ratio, calculated as total assets divided by stockholders’ equity, shows a general increasing trend throughout the period.
- Financial Leverage Trend
- The financial leverage ratio began at 4.10 in 2021, decreased slightly to 3.89 in 2022, and then increased consistently through 2025, reaching 4.60. This indicates a growing reliance on assets financed by equity over time. The initial decrease in 2022 coincided with an increase in stockholders’ equity, while the subsequent increases in the ratio are attributable to faster growth in total assets relative to stockholders’ equity, and the decline in equity from 2022 onwards.
The observed increase in financial leverage suggests the company is utilizing more debt or other non-equity financing to fund its asset growth. While not inherently negative, a rising leverage ratio can indicate increased financial risk, as higher leverage implies greater obligations to meet fixed financing costs. The decline in stockholders’ equity from 2022 to 2025, coupled with the increasing leverage, warrants further investigation into the underlying causes, such as share repurchases, dividend payments, or retained earnings performance.
- Asset and Equity Relationship
- The consistent growth in total assets, contrasted with the fluctuating stockholders’ equity, is a key driver of the observed trend in financial leverage. The rate of asset growth consistently exceeded the rate of equity growth after 2022, contributing to the increasing ratio. This dynamic suggests a shift in the company’s capital structure towards greater reliance on external financing.
Continued monitoring of these trends, alongside other solvency and profitability metrics, is recommended to assess the long-term sustainability of the company’s financial position.
Interest Coverage
General Motors Co., interest coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 2,697) | 6,008) | 10,127) | 9,934) | 10,019) | |
| Add: Net income attributable to noncontrolling interest | 83) | (45) | (287) | (226) | (74) | |
| Add: Income tax expense | 337) | 2,556) | 563) | 1,889) | 2,771) | |
| Add: Automotive interest expense | 727) | 846) | 911) | 987) | 950) | |
| Earnings before interest and tax (EBIT) | 3,844) | 9,365) | 11,314) | 12,584) | 13,666) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 5.29 | 11.07 | 12.42 | 12.75 | 14.39 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Ford Motor Co. | — | 7.49 | 4.05 | -1.40 | 10.86 | |
| Tesla Inc. | 16.62 | 26.69 | 64.93 | 72.83 | 18.10 | |
| Interest Coverage, Sector | ||||||
| Automobiles & Components | — | 11.71 | 11.28 | 10.15 | 12.79 | |
| Interest Coverage, Industry | ||||||
| Consumer Discretionary | — | 15.00 | 12.23 | 9.30 | 13.23 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 3,844 ÷ 727 = 5.29
2 Click competitor name to see calculations.
The interest coverage ratio demonstrates a declining trend over the five-year period. While remaining above 1.0 for the duration, the ratio exhibits a consistent decrease, signaling a weakening ability to meet interest obligations from operating earnings.
- Earnings before interest and tax (EBIT)
- EBIT decreased from US$13,666 million in 2021 to US$3,844 million in 2025. This substantial reduction in earnings is the primary driver behind the declining interest coverage ratio. The decrease appears to accelerate in the later years of the period.
- Automotive interest expense
- Automotive interest expense experienced a modest decrease over the period, falling from US$950 million in 2021 to US$727 million in 2025. However, this decrease was not sufficient to offset the more significant decline in EBIT.
- Interest coverage ratio
- The interest coverage ratio began at 14.39 in 2021 and decreased to 5.29 in 2025. The ratio decreased steadily from 2021 to 2023, with a more pronounced decline observed between 2023 and 2025. This indicates that the company’s ability to cover its interest expense with its earnings has diminished considerably. While still positive, the ratio in 2025 suggests a considerably reduced margin of safety.
The combined effect of decreasing earnings and relatively stable interest expense resulted in a significant reduction in the interest coverage ratio. Continued monitoring of this trend is warranted, as a further decline could indicate increasing financial risk.
Fixed Charge Coverage
General Motors Co., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| U.S. federal statutory income tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | |
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | 2,697) | 6,008) | 10,127) | 9,934) | 10,019) | |
| Add: Net income attributable to noncontrolling interest | 83) | (45) | (287) | (226) | (74) | |
| Add: Income tax expense | 337) | 2,556) | 563) | 1,889) | 2,771) | |
| Add: Automotive interest expense | 727) | 846) | 911) | 987) | 950) | |
| Earnings before interest and tax (EBIT) | 3,844) | 9,365) | 11,314) | 12,584) | 13,666) | |
| Add: Rent expense under operating leases | 378) | 369) | 346) | 317) | 294) | |
| Earnings before fixed charges and tax | 4,222) | 9,734) | 11,660) | 12,901) | 13,960) | |
| Automotive interest expense | 727) | 846) | 911) | 987) | 950) | |
| Rent expense under operating leases | 378) | 369) | 346) | 317) | 294) | |
| Adjustments | (483) | (1,181) | 105) | 1,019) | 182) | |
| Adjustments, tax adjustment1 | (128) | (314) | 28) | 271) | 48) | |
| Adjustments, after tax adjustment | (611) | (1,495) | 133) | 1,290) | 230) | |
| Fixed charges | 494) | (280) | 1,390) | 2,594) | 1,474) | |
| Solvency Ratio | ||||||
| Fixed charge coverage2 | 8.55 | — | 8.39 | 4.97 | 9.47 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors3 | ||||||
| Ford Motor Co. | — | 5.10 | 3.11 | -0.75 | 8.91 | |
| Tesla Inc. | 3.51 | 5.86 | 8.62 | 14.87 | 7.36 | |
| Fixed Charge Coverage, Sector | ||||||
| Automobiles & Components | — | 8.87 | 6.28 | 4.96 | 8.76 | |
| Fixed Charge Coverage, Industry | ||||||
| Consumer Discretionary | — | 5.95 | 4.95 | 3.65 | 5.60 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Adjustments, tax adjustment = (Adjustments × U.S. federal statutory income tax rate) ÷ (1 − U.S. federal statutory income tax rate)
= (-483 × 21.00%) ÷ (1 − 21.00%) = -128
2 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 4,222 ÷ 494 = 8.55
3 Click competitor name to see calculations.
The company’s fixed charge coverage exhibited volatility over the observed period. Earnings before fixed charges and tax generally decreased, while fixed charges fluctuated significantly, impacting the coverage ratio.
- Earnings Before Fixed Charges and Tax
- Earnings before fixed charges and tax decreased from US$13,960 million in 2021 to US$4,222 million in 2025. This represents a substantial decline, particularly between 2023 and 2024, where earnings fell from US$11,660 million to US$9,734 million, and then more dramatically to US$4,222 million in the following year. The trend suggests increasing pressure on profitability or rising operating costs.
- Fixed Charges
- Fixed charges increased considerably from US$1,474 million in 2021 to US$2,594 million in 2022. They then decreased to US$1,390 million in 2023, before becoming negative at -US$280 million in 2024. Fixed charges then increased to US$494 million in 2025. The negative value in 2024 is unusual and warrants further investigation, potentially indicating a restructuring of debt or other financial arrangements that resulted in a credit rather than a charge.
- Fixed Charge Coverage
- The fixed charge coverage ratio began at 9.47 in 2021, indicating a strong ability to meet fixed obligations. It decreased to 4.97 in 2022, reflecting the increase in fixed charges. The ratio improved to 8.39 in 2023, coinciding with lower fixed charges. A value for 2024 is not available. The ratio recovered to 8.55 in 2025, despite the significant decline in earnings before fixed charges and tax, due to the relatively low fixed charges in that year. The overall trend suggests a weakening, then partial recovery, in the ability to cover fixed obligations, with the 2024 value missing and the 2025 value being influenced by the unusual fixed charge figure.
The interplay between declining earnings and fluctuating fixed charges creates a complex picture of the company’s solvency. The negative fixed charges in 2024 are a significant anomaly that requires further scrutiny. While the 2025 ratio appears healthy, it is heavily influenced by the atypical fixed charge amount and should be interpreted with caution.