Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2010
- Total Asset Turnover since 2010
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Profitability Ratios (Summary)
General Motors Co., profitability 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).
The profitability metrics demonstrate a generally declining trend over the five-year period. Initial stability in early metrics gives way to increasingly pronounced decreases in later years, suggesting growing challenges to maintaining profitability.
- Gross Profit Margin
- The gross profit margin exhibited initial improvement from 11.49% in 2021 to 11.87% in 2022, before declining to 10.36% in 2023. A subsequent increase to 11.97% in 2024 was followed by a substantial decrease to 5.26% in 2025. This final decline indicates potential pressures on production costs or pricing strategies.
- Operating Profit Margin
- The operating profit margin followed a similar pattern, decreasing from 8.21% in 2021 to 7.16% in 2022 and further to 5.90% in 2023. A modest recovery to 7.45% in 2024 was overshadowed by a significant drop to 1.73% in 2025. This suggests increasing operational expenses relative to revenue.
- Net Profit Margin
- The net profit margin experienced a consistent decline throughout the period. Starting at 8.82% in 2021, it decreased to 6.90% in 2022, 6.42% in 2023, and 3.50% in 2024, culminating in a low of 1.61% in 2025. This indicates a broad-based erosion of profitability, impacted by factors beyond core operations.
- Return on Equity (ROE)
- Return on equity showed initial fluctuations, moving from 16.77% in 2021 to 14.65% in 2022, then increasing to 15.75% in 2023. However, a marked decline occurred in 2024 (9.53%) and continued into 2025 (4.41%), reflecting diminishing returns to shareholders.
- Return on Assets (ROA)
- The return on assets also demonstrated a downward trend. Beginning at 4.09% in 2021, it decreased to 3.76% in 2022 and 3.71% in 2023. Further declines were observed in 2024 (2.15%) and 2025 (0.96%), indicating decreasing efficiency in utilizing assets to generate profit.
Collectively, these ratios suggest a weakening financial performance. The accelerating declines in profitability metrics from 2024 to 2025 warrant further investigation to identify the underlying causes and potential mitigation strategies.
Return on Sales
Return on Investment
Gross Profit Margin
General Motors Co., gross profit margin 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) | ||||||
| Automotive and other gross margin | ||||||
| Automotive net sales and revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
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
Gross profit margin = 100 × Automotive and other gross margin ÷ Automotive net sales and revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited fluctuating performance over the five-year period. Initially, an increase was observed, followed by a decline in the most recent year presented.
- Gross Profit Margin Trend
- The gross profit margin began at 11.49% in 2021, increasing to 11.87% in 2022. A subsequent decrease to 10.36% occurred in 2023. The margin then recovered to 11.97% in 2024 before experiencing a substantial decline to 5.26% in 2025.
- Automotive Gross Margin
- Automotive and other gross margin increased from US$13,046 million in 2021 to US$17,083 million in 2022, representing a significant rise. It then decreased to US$16,328 million in 2023, followed by an increase to US$20,541 million in 2024. A considerable decrease to US$8,843 million was observed in 2025.
- Automotive Net Sales and Revenue
- Automotive net sales and revenue demonstrated consistent growth from US$113,590 million in 2021 to US$143,975 million in 2022, and further to US$157,658 million in 2023. This growth continued to US$171,606 million in 2024, before decreasing slightly to US$167,971 million in 2025.
The decline in gross profit margin in 2025, despite relatively stable revenue, suggests potential increases in the cost of goods sold or shifts in the product mix towards lower-margin offerings. The substantial decrease in automotive gross margin in 2025 is a key driver of the overall margin compression.
Operating Profit Margin
General Motors Co., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Automotive net sales and revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Automobiles & Components | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
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
Operating profit margin = 100 × Operating income ÷ Automotive net sales and revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally positive trend, followed by a significant decline in the most recent year observed.
- Operating Profit Margin Trend
- In 2021, the operating profit margin stood at 8.21%. This increased to 7.16% in 2022, although representing a slight decrease in absolute margin. A further decline was observed in 2023, with the margin falling to 5.90%. A recovery occurred in 2024, as the margin rose to 7.45%. However, 2025 witnessed a substantial decrease, with the operating profit margin plummeting to 1.73%.
The operating income generally increased from 2021 to 2024, aligning with the initial increase and subsequent stabilization of the operating profit margin. However, operating income decreased significantly in 2025, coinciding with the dramatic reduction in the operating profit margin.
- Relationship to Net Sales
- Automotive net sales and revenue increased consistently from 2021 to 2024, from US$113,590 million to US$171,606 million. While revenue experienced a slight decrease in 2025 to US$167,971 million, the substantial drop in operating income suggests that the decline in profitability was not solely attributable to revenue fluctuations. The disproportionate decrease in operating income relative to the modest revenue decline in 2025 indicates a significant issue with cost control or pricing power.
The volatility in the operating profit margin suggests potential challenges in maintaining consistent profitability. The sharp decline in 2025 warrants further investigation to determine the underlying causes, such as increased production costs, pricing pressures, or unfavorable product mix.
- Key Observations
- The operating profit margin demonstrates a clear pattern of initial stability followed by increasing volatility. The most recent year’s performance is significantly below previous levels, indicating a potential area of concern for the business.
Net Profit Margin
General Motors Co., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to stockholders | ||||||
| Automotive net sales and revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Automobiles & Components | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
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
Net profit margin = 100 × Net income attributable to stockholders ÷ Automotive net sales and revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited a clear downward trajectory over the five-year period. Initially strong, the margin progressively declined, indicating decreasing profitability relative to revenue.
- Net Profit Margin Trend
- In 2021, the net profit margin stood at 8.82%. This represented the highest level observed during the analyzed timeframe. A decrease to 6.90% was recorded in 2022, suggesting emerging pressures on profitability.
- The decline continued in 2023, with the net profit margin falling to 6.42%. This indicates that while revenue increased, net income did not rise proportionally.
- A more substantial reduction occurred in 2024, as the net profit margin decreased significantly to 3.50%. This suggests a considerable impact from factors affecting costs or pricing.
- The most pronounced decrease was observed in 2025, with the net profit margin reaching 1.61%. This represents a substantial contraction in profitability and warrants further investigation.
While automotive net sales and revenue generally increased between 2021 and 2024, the corresponding decline in net profit margin suggests that cost of goods sold, operating expenses, or other factors are increasing at a faster rate than revenue. The slight decrease in revenue in 2025, coupled with the continued decline in net profit margin, reinforces this observation.
The consistent erosion of the net profit margin signals a potential weakening in the company’s ability to translate sales into profits. This trend requires attention to identify the underlying causes and implement corrective measures.
Return on Equity (ROE)
General Motors Co., ROE 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 | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| ROE, Sector | ||||||
| Automobiles & Components | ||||||
| ROE, Industry | ||||||
| Consumer Discretionary | ||||||
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
ROE = 100 × Net income attributable to stockholders ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited a fluctuating pattern over the five-year period. Initially, the metric demonstrated strength, followed by a marked decline in later years. Net income attributable to stockholders and stockholders’ equity both influenced the observed ROE trends.
- Overall Trend
- A general downward trend in ROE is apparent. Starting at 16.77% in 2021, the ROE decreased to 4.41% by 2025. This represents a substantial reduction in profitability relative to equity over the observed timeframe.
- 2021-2022
- From 2021 to 2022, ROE decreased from 16.77% to 14.65%. This decline coincided with a slight decrease in net income attributable to stockholders, while stockholders’ equity increased significantly. The increase in equity, without a proportional increase in net income, contributed to the lower ROE.
- 2022-2023
- ROE experienced a modest recovery in 2023, rising to 15.75%. This improvement was driven by an increase in net income attributable to stockholders, despite a decrease in stockholders’ equity. The positive impact of higher net income partially offset the effect of reduced equity.
- 2023-2025
- A significant decline in ROE occurred between 2023 and 2025. ROE fell from 15.75% in 2023 to 9.53% in 2024 and further to 4.41% in 2025. This substantial decrease is attributable to a combination of factors. Net income attributable to stockholders experienced a dramatic reduction, particularly in 2024 and 2025, while stockholders’ equity remained relatively stable, resulting in a considerably lower ROE.
- Net Income and Equity Relationship
- The relationship between net income and stockholders’ equity is a key driver of the ROE trend. Periods of increasing equity without corresponding increases in net income resulted in lower ROE values. Conversely, increases in net income, even with decreasing equity, provided some support to the ROE. The pronounced decline in net income in the later years had the most significant negative impact on the ROE.
Return on Assets (ROA)
General Motors Co., ROA 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 | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| Tesla Inc. | ||||||
| ROA, Sector | ||||||
| Automobiles & Components | ||||||
| ROA, Industry | ||||||
| Consumer Discretionary | ||||||
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
ROA = 100 × Net income attributable to stockholders ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a declining trend over the five-year period. Initially, the ROA demonstrated relative stability before experiencing a significant decrease in later years. Net income attributable to stockholders fluctuated, while total assets consistently increased, contributing to the observed ROA pattern.
- ROA Trend
- The ROA began at 4.09% in 2021, decreased to 3.76% in 2022, and further declined to 3.71% in 2023. A more substantial decrease was observed in 2024, with the ROA falling to 2.15%. This downward trend continued into 2025, reaching 0.96%.
- Net Income Impact
- Net income attributable to stockholders remained relatively consistent between 2021 and 2023, fluctuating around US$10 billion. However, a significant reduction in net income occurred in 2024 (US$6.008 billion) and again in 2025 (US$2.697 billion). This decline in net income directly contributed to the decreasing ROA, particularly in the later years.
- Asset Base Impact
- Total assets increased steadily throughout the period, from US$244.718 billion in 2021 to US$281.284 billion in 2025. While asset growth is not inherently negative, the simultaneous decline in net income resulted in a lower ROA, as the same level of income was spread across a larger asset base. The increasing asset base amplified the effect of the declining net income on the ROA.
The combined effect of increasing total assets and decreasing net income attributable to stockholders resulted in a pronounced and consistent decline in the ROA. The most significant drop in ROA occurred between 2023 and 2025, coinciding with the largest reductions in net income.