Analysis of Solvency Ratios
Quarterly Data
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 (quarterly data)
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
The solvency position, as indicated by the provided ratios, exhibits a generally increasing risk profile over the analyzed period. While initial values suggest a relatively stable financial structure, a discernible trend towards higher leverage and decreasing coverage emerges, particularly in the latter half of the observation window.
- Debt to Equity
- The debt to equity ratio demonstrates a gradual increase from 1.77 in March 2022 to 2.13 in December 2025. This indicates a growing reliance on debt financing relative to equity. The increase is not consistent throughout the period, with some quarterly fluctuations, but the overall trajectory is upward, suggesting a potentially heightened financial risk.
- Debt to Capital
- The debt to capital ratio follows a similar pattern to debt to equity, increasing from 0.64 to 0.68 over the period. This reinforces the observation of increasing leverage. The changes are relatively small on a quarterly basis, but the cumulative effect indicates a shift in the capital structure towards greater debt dependence.
- Debt to Assets
- The debt to assets ratio also shows a consistent, albeit modest, increase, moving from 0.44 to 0.46. This suggests that a larger proportion of the company’s assets are financed by debt. The trend is less pronounced than that of debt to equity, but still contributes to the overall picture of increasing leverage.
- Financial Leverage
- Financial leverage, as measured by the ratio, generally increased from 4.05 to 4.60. This indicates that the company is utilizing debt to amplify returns to equity shareholders, but also increases financial risk. A slight dip is observed in some quarters, but the overall trend is upward.
- Interest Coverage
- The interest coverage ratio presents a contrasting trend. Initially strong at 13.21, it generally declines to 5.29 by December 2025. This indicates a diminishing ability to cover interest expenses from earnings. The decline is particularly noticeable in the later quarters, suggesting increasing pressure on profitability to service debt obligations. A significant drop is observed from September 2024 (15.31) to December 2025 (5.29).
In summary, the observed trends suggest a gradual increase in financial leverage coupled with a decreasing ability to comfortably meet interest obligations. This evolving solvency profile warrants further investigation and monitoring.
Debt Ratios
Coverage Ratios
Debt to Equity
General Motors Co., debt to equity calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term debt and current portion of long-term debt | 35,668) | 36,477) | 38,314) | 35,934) | 39,432) | 36,162) | 38,098) | 35,976) | 38,968) | 38,652) | 36,668) | 37,010) | 38,778) | 35,084) | 32,306) | 33,037) | |||||
| Long-term debt, excluding current portion | 94,609) | 96,026) | 97,417) | 96,744) | 90,300) | 91,689) | 88,338) | 86,261) | 82,773) | 80,221) | 81,375) | 77,411) | 75,921) | 77,523) | 78,081) | 76,768) | |||||
| Total debt | 130,277) | 132,503) | 135,731) | 132,678) | 129,732) | 127,851) | 126,436) | 122,237) | 121,741) | 118,873) | 118,043) | 114,421) | 114,699) | 112,607) | 110,387) | 109,805) | |||||
| Stockholders’ equity | 61,119) | 66,374) | 66,363) | 64,372) | 63,072) | 70,935) | 68,633) | 66,598) | 64,286) | 74,475) | 71,655) | 69,877) | 67,792) | 65,268) | 63,954) | 62,095) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to equity1 | 2.13 | 2.00 | 2.05 | 2.06 | 2.06 | 1.80 | 1.84 | 1.84 | 1.89 | 1.60 | 1.65 | 1.64 | 1.69 | 1.73 | 1.73 | 1.77 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||
| Ford Motor Co. | — | 3.42 | 3.50 | 3.48 | 3.54 | 3.55 | 3.46 | 3.49 | 3.49 | 3.22 | 3.28 | 3.29 | 3.21 | 3.05 | 2.92 | 3.01 | |||||
| Tesla Inc. | 0.10 | 0.10 | 0.09 | 0.10 | 0.11 | 0.11 | 0.12 | 0.08 | 0.08 | 0.10 | 0.07 | 0.08 | 0.09 | 0.12 | 0.15 | 0.17 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 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 for the analyzed period demonstrates a fluctuating pattern, generally trending upwards with notable variations. Initially, the ratio exhibited a decline from 1.77 to 1.64 between March 31, 2022, and March 31, 2023. This suggests a period where equity growth outpaced debt accumulation. However, this trend reversed in subsequent quarters.
- Overall Trend
- From March 31, 2023, through December 31, 2025, the debt to equity ratio generally increased. The ratio rose from 1.64 to 2.13 over this period, indicating a growing reliance on debt financing relative to equity. The most significant increase occurred between September 30, 2023 (1.60) and December 31, 2023 (1.89).
- Short-Term Fluctuations
- While the overall trend is upward, there are short-term fluctuations. A slight decrease is observed between September 30, 2025 (2.00) and December 31, 2025 (2.13). This suggests a possible, albeit limited, adjustment in the capital structure during that specific quarter. The ratio also decreased from 1.77 to 1.73 in the first two quarters of the analyzed period.
- Peak and Trough Values
- The lowest ratio value recorded during the period is 1.60, observed on September 30, 2023. The highest ratio value is 2.13, recorded on December 31, 2025. These represent the points of least and greatest relative debt burden, respectively.
The observed increase in the debt to equity ratio over the majority of the analyzed period warrants further investigation. While not inherently negative, a consistently rising ratio could indicate increased financial risk and potentially reduced financial flexibility. The fluctuations suggest dynamic capital management, but the overall trajectory points towards greater leverage.
Debt to Capital
General Motors Co., debt to capital calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term debt and current portion of long-term debt | 35,668) | 36,477) | 38,314) | 35,934) | 39,432) | 36,162) | 38,098) | 35,976) | 38,968) | 38,652) | 36,668) | 37,010) | 38,778) | 35,084) | 32,306) | 33,037) | |||||
| Long-term debt, excluding current portion | 94,609) | 96,026) | 97,417) | 96,744) | 90,300) | 91,689) | 88,338) | 86,261) | 82,773) | 80,221) | 81,375) | 77,411) | 75,921) | 77,523) | 78,081) | 76,768) | |||||
| Total debt | 130,277) | 132,503) | 135,731) | 132,678) | 129,732) | 127,851) | 126,436) | 122,237) | 121,741) | 118,873) | 118,043) | 114,421) | 114,699) | 112,607) | 110,387) | 109,805) | |||||
| Stockholders’ equity | 61,119) | 66,374) | 66,363) | 64,372) | 63,072) | 70,935) | 68,633) | 66,598) | 64,286) | 74,475) | 71,655) | 69,877) | 67,792) | 65,268) | 63,954) | 62,095) | |||||
| Total capital | 191,396) | 198,877) | 202,094) | 197,050) | 192,804) | 198,786) | 195,069) | 188,835) | 186,027) | 193,348) | 189,698) | 184,298) | 182,491) | 177,875) | 174,341) | 171,900) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to capital1 | 0.68 | 0.67 | 0.67 | 0.67 | 0.67 | 0.64 | 0.65 | 0.65 | 0.65 | 0.61 | 0.62 | 0.62 | 0.63 | 0.63 | 0.63 | 0.64 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||
| Ford Motor Co. | — | 0.77 | 0.78 | 0.78 | 0.78 | 0.78 | 0.78 | 0.78 | 0.78 | 0.76 | 0.77 | 0.77 | 0.76 | 0.75 | 0.74 | 0.75 | |||||
| Tesla Inc. | 0.09 | 0.09 | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | 0.08 | 0.08 | 0.09 | 0.06 | 0.07 | 0.09 | 0.10 | 0.13 | 0.15 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 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 for the analyzed period demonstrates a generally stable trend with some fluctuation. Initially, the ratio exhibited a slight decrease before increasing towards the end of the observed timeframe.
- Overall Trend
- The debt to capital ratio began at 0.64 in March 2022 and generally remained between 0.61 and 0.65 for the subsequent nine quarters. A noticeable increase is observed in the latter part of the period, culminating in a ratio of 0.68 by December 2025.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- From March 2022 to December 2022, the ratio experienced a minor decline, moving from 0.64 to 0.63. This suggests a slight improvement in the company’s capital structure during this period, potentially due to an increase in capital relative to debt.
- Stabilization and Subsequent Increase (Mar 31, 2023 – Sep 30, 2024)
- The ratio remained relatively stable between 0.61 and 0.65 from March 2023 through September 2024. This indicates a period of consistent financial leverage. However, a gradual upward trend emerges during this phase.
- Recent Trend (Dec 31, 2024 – Dec 31, 2025)
- The most recent quarters show a clear increasing trend. The ratio rose from 0.65 in December 2024 to 0.67 in March 2025 and further to 0.68 in December 2025. This indicates an increasing reliance on debt financing relative to capital, potentially due to increased borrowing or a decrease in equity.
- Total Debt and Total Capital
- Total debt consistently increased throughout the period, rising from US$109,805 million to US$130,277 million. Total capital also increased, but at a slower rate, moving from US$171,900 million to US$191,396 million. The differing growth rates of debt and capital contribute to the observed increase in the debt to capital ratio.
In summary, while the debt to capital ratio remained relatively stable for a significant portion of the analyzed period, the recent trend indicates a growing level of financial leverage. This warrants further investigation to understand the underlying drivers and potential implications for the company’s financial health.
Debt to Assets
General Motors Co., debt to assets calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Short-term debt and current portion of long-term debt | 35,668) | 36,477) | 38,314) | 35,934) | 39,432) | 36,162) | 38,098) | 35,976) | 38,968) | 38,652) | 36,668) | 37,010) | 38,778) | 35,084) | 32,306) | 33,037) | |||||
| Long-term debt, excluding current portion | 94,609) | 96,026) | 97,417) | 96,744) | 90,300) | 91,689) | 88,338) | 86,261) | 82,773) | 80,221) | 81,375) | 77,411) | 75,921) | 77,523) | 78,081) | 76,768) | |||||
| Total debt | 130,277) | 132,503) | 135,731) | 132,678) | 129,732) | 127,851) | 126,436) | 122,237) | 121,741) | 118,873) | 118,043) | 114,421) | 114,699) | 112,607) | 110,387) | 109,805) | |||||
| Total assets | 281,284) | 288,168) | 289,384) | 282,104) | 279,761) | 289,289) | 282,956) | 276,591) | 273,064) | 281,705) | 275,833) | 267,004) | 264,037) | 260,529) | 253,517) | 251,492) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Debt to assets1 | 0.46 | 0.46 | 0.47 | 0.47 | 0.46 | 0.44 | 0.45 | 0.44 | 0.45 | 0.42 | 0.43 | 0.43 | 0.43 | 0.43 | 0.44 | 0.44 | |||||
| Benchmarks | |||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||
| Ford Motor Co. | — | 0.54 | 0.54 | 0.55 | 0.56 | 0.55 | 0.55 | 0.54 | 0.55 | 0.53 | 0.54 | 0.54 | 0.54 | 0.52 | 0.52 | 0.54 | |||||
| Tesla Inc. | 0.06 | 0.06 | 0.06 | 0.06 | 0.07 | 0.06 | 0.07 | 0.05 | 0.05 | 0.06 | 0.04 | 0.04 | 0.05 | 0.06 | 0.08 | 0.09 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 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 for the analyzed period demonstrates a generally stable trend with some fluctuation. Initially, the ratio remained consistent at 0.44 for the first four quarters of the observed timeframe. A slight increase is then noted, culminating in a ratio of 0.47 in the first half of 2025, before decreasing slightly to 0.46 by the end of the period.
- Overall Trend
- The ratio exhibits relative stability between 0.42 and 0.47 throughout the period. While there isn't a dramatic shift, a subtle upward trajectory is discernible, particularly from the beginning of 2024 through the first half of 2025. This suggests a gradual increase in the proportion of assets financed by debt.
- Initial Period (Mar 31, 2022 – Dec 31, 2022)
- The debt-to-assets ratio remained constant at 0.44 during this period, indicating a consistent capital structure. Both total debt and total assets experienced incremental increases, but these increases were proportional, maintaining the ratio’s stability.
- Mid-Period (Mar 31, 2023 – Dec 31, 2023)
- The ratio fluctuated between 0.42 and 0.45. A slight decrease to 0.42 was observed in September 2023, followed by an increase to 0.45 by the end of the year. This suggests some dynamic adjustment in the company’s financing strategy or asset base during this time.
- Recent Period (Mar 31, 2024 – Dec 31, 2025)
- The ratio increased from 0.44 to 0.47 over the first half of 2025. This indicates a greater reliance on debt financing relative to assets. A slight decrease to 0.46 was observed in the final two quarters of the period, but the ratio remained elevated compared to earlier periods. The increase in total debt appears to be outpacing the growth in total assets during this timeframe.
In summary, the debt-to-assets ratio suggests a generally healthy solvency position, but the recent trend indicates a potential increase in financial leverage. Continued monitoring of this ratio is recommended to assess any potential risks associated with the increasing debt levels.
Financial Leverage
General Motors Co., financial leverage calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Total assets | 281,284) | 288,168) | 289,384) | 282,104) | 279,761) | 289,289) | 282,956) | 276,591) | 273,064) | 281,705) | 275,833) | 267,004) | 264,037) | 260,529) | 253,517) | 251,492) | |||||
| Stockholders’ equity | 61,119) | 66,374) | 66,363) | 64,372) | 63,072) | 70,935) | 68,633) | 66,598) | 64,286) | 74,475) | 71,655) | 69,877) | 67,792) | 65,268) | 63,954) | 62,095) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Financial leverage1 | 4.60 | 4.34 | 4.36 | 4.38 | 4.44 | 4.08 | 4.12 | 4.15 | 4.25 | 3.78 | 3.85 | 3.82 | 3.89 | 3.99 | 3.96 | 4.05 | |||||
| Benchmarks | |||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||
| Ford Motor Co. | — | 6.35 | 6.50 | 6.37 | 6.36 | 6.48 | 6.35 | 6.40 | 6.39 | 6.06 | 6.09 | 6.06 | 5.92 | 5.86 | 5.56 | 5.62 | |||||
| Tesla Inc. | 1.68 | 1.67 | 1.66 | 1.68 | 1.67 | 1.71 | 1.70 | 1.70 | 1.70 | 1.76 | 1.77 | 1.81 | 1.84 | 1.87 | 1.88 | 1.94 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 281,284 ÷ 61,119 = 4.60
2 Click competitor name to see calculations.
The financial leverage ratio for the analyzed period demonstrates a generally stable trend with some fluctuations. Initially, the ratio decreased from 4.05 in March 2022 to 3.82 in March 2023, indicating a slight reduction in the proportion of assets financed by equity. A subsequent increase was observed, peaking at 4.60 in December 2025, suggesting a greater reliance on debt financing towards the end of the period.
- Overall Trend
- The financial leverage ratio generally remained within a relatively narrow range between 3.78 and 4.25 for most of the period, from September 2022 through September 2024. However, the latter part of the period, from March 2024 to December 2025, shows a clear upward trend, with the ratio increasing from 4.15 to 4.60.
- Short-Term Fluctuations
- A notable increase in the ratio occurred between September 2023 (3.78) and December 2023 (4.25). This suggests a significant shift in the company’s capital structure during that quarter, potentially due to increased borrowing or a decrease in equity. A similar, though less pronounced, increase is observed between March 2024 (4.15) and June 2024 (4.12), followed by a more substantial rise through December 2025 (4.60).
- Lowest and Highest Points
- The lowest recorded financial leverage ratio was 3.82, observed in March 2023. The highest ratio, 4.60, was recorded in December 2025. These represent the periods of least and greatest reliance on debt financing relative to equity, respectively.
The observed increase in financial leverage towards the end of the analyzed period warrants further investigation to determine the underlying reasons and potential implications for the company’s financial risk profile. While not necessarily indicative of negative performance, a higher leverage ratio generally implies increased financial risk and sensitivity to changes in interest rates or economic conditions.
Interest Coverage
General Motors Co., interest coverage calculation (quarterly data)
| Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||
| Net income attributable to stockholders | (3,309) | 1,327) | 1,895) | 2,784) | (2,961) | 3,056) | 2,933) | 2,980) | 2,102) | 3,064) | 2,566) | 2,395) | 1,998) | 3,305) | 1,692) | 2,939) | |||||
| Add: Net income attributable to noncontrolling interest | 49) | (34) | (1) | 69) | 86) | (48) | (56) | (27) | (109) | (70) | (59) | (49) | 9) | (53) | (50) | (132) | |||||
| Add: Income tax expense | (989) | 126) | 481) | 719) | 319) | 709) | 766) | 762) | (858) | 470) | 522) | 429) | 582) | 845) | 490) | (28) | |||||
| Add: Automotive interest expense | 168) | 209) | 198) | 152) | 215) | 206) | 206) | 219) | 222) | 229) | 226) | 234) | 268) | 259) | 234) | 226) | |||||
| Earnings before interest and tax (EBIT) | (4,081) | 1,628) | 2,573) | 3,724) | (2,341) | 3,923) | 3,849) | 3,934) | 1,357) | 3,693) | 3,255) | 3,009) | 2,857) | 4,356) | 2,366) | 3,005) | |||||
| Solvency Ratio | |||||||||||||||||||||
| Interest coverage1 | 5.29 | 7.21 | 10.22 | 11.75 | 11.07 | 15.31 | 14.65 | 13.66 | 12.42 | 13.39 | 13.65 | 12.65 | 12.75 | 12.89 | 11.56 | 13.21 | |||||
| Benchmarks | |||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||
| Ford Motor Co. | — | 5.41 | 4.77 | 6.55 | 7.49 | 3.57 | 3.88 | 3.69 | 4.05 | 6.58 | 4.59 | 3.38 | -1.40 | 6.10 | 7.71 | 7.10 | |||||
| Tesla Inc. | 16.62 | 19.97 | 21.42 | 22.07 | 26.69 | 28.48 | 31.31 | 45.64 | 64.93 | 92.91 | 94.40 | 82.09 | 72.83 | 55.02 | 36.16 | 29.34 | |||||
Based on: 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q4 2025 Calculation
Interest coverage
= (EBITQ4 2025
+ EBITQ3 2025
+ EBITQ2 2025
+ EBITQ1 2025)
÷ (Interest expenseQ4 2025
+ Interest expenseQ3 2025
+ Interest expenseQ2 2025
+ Interest expenseQ1 2025)
= (-4,081 + 1,628 + 2,573 + 3,724)
÷ (168 + 209 + 198 + 152)
= 5.29
2 Click competitor name to see calculations.
The interest coverage ratio for the analyzed period demonstrates overall stability with fluctuations throughout the observed timeframe. Generally, the ratio remains above 10, indicating a healthy ability to meet interest obligations from earnings. However, a notable decline is observed towards the end of the period.
- Overall Trend
- From March 31, 2022, through June 30, 2023, the interest coverage ratio fluctuates between approximately 11.56 and 13.65, suggesting a consistent capacity to cover interest expenses. A slight upward trend is visible during the first half of 2024, peaking at 15.31 in September 2024. Subsequently, a significant downward trend emerges, culminating in a ratio of 5.29 by December 31, 2025.
- Short-Term Fluctuations (2022-2023)
- The ratio experiences moderate quarterly variations between 2022 and 2023, likely influenced by seasonal earnings patterns and changes in automotive interest expense. The lowest point within this period is 11.56 in June 2022, while the highest is 13.65 in June 2023. These fluctuations do not represent a substantial shift in the company’s ability to service its debt.
- Recent Decline (2024-2025)
- The period from September 2024 to December 2025 reveals a concerning decline in the interest coverage ratio. While the ratio remains above 10 until March 2025 (11.75), it falls to 7.21 in September 2025 and further decreases to 5.29 by December 2025. This decline coincides with a negative EBIT value in December 2024 and a substantial negative EBIT in December 2025, indicating a significant reduction in earnings available to cover interest payments. The December 2025 value warrants further investigation.
- EBIT and Interest Expense Relationship
- The automotive interest expense remains relatively stable throughout the period, ranging between US$152 million and US$268 million. The primary driver of the changes in the interest coverage ratio is therefore the fluctuation in Earnings Before Interest and Tax (EBIT). The substantial decline in EBIT during the final quarters of the analyzed period directly contributes to the observed decrease in the ratio.
In conclusion, while the company demonstrated a strong ability to cover interest expenses for most of the analyzed period, the recent decline in the interest coverage ratio, coupled with negative EBIT values, suggests a weakening financial position and increased vulnerability to changes in interest rates or earnings performance.