General Motors - Financial Ratio AnalysisI. Highlights of General Motors HistoryIn its early days, the automobile industry consisted of hundreds of companies, each producing a few models. William Durant, who purchased and reorganized a bankrupt Buick Motors in 1904, determined that if several automakers joined together, it would increase group protection. He founded the General Motors Company in Flint, Michigan, in 1908. Durant had purchased 17 companies (including Oldsmobile, Cadillac, and Pontiac) by 1910, the year a bankers' union forced him to resign. In a stock swap in 1915, he regained control through Chevrolet, a company he had started with racing driver Louis Chevrolet. GM created the GM Acceptance Corporation (self-funded) and acquired a number of companies, including Fisher Body, Frigidaire (sold in 1979), and a small bearing company, Hyatt Roller Bearing. With the acquisition of Hyatt came Alfred Sloan, an administrative genius who would build GM into a corporate colossus. Sloan, president from 1923 to 1937, implemented a decentralized management system, today imitated around the world. The automaker competed by offering models ranging from luxury to economy, colors other than black, and annual styling changes. By 1927, it had become the industry leader. GM introduced a line of front-wheel drive compacts in 1979. Under the leadership of Roger Smith, CEO from 1981 to 1990, GM laid off thousands of workers as part of a massive restructuring and cost-cutting program at the company. company scale. In 1984, GM formed NUMMI with Toyota as an experiment to see if Toyota's manufacturing techniques would work in the United States. The joint venture's first car was the Chevrolet Nova. GM purchased Electronic Data Systems (1984) and HughesAircraft (1986) from Ross Perot. In 1989, the company purchased 50% of Saab Automobile. In 1990, GM introduced Saturn, its first new brand since 1926, reflecting a company-wide emphasis on quality. Two years later, it completed the largest stock offering in U.S. history, raising $2.2 billion. The culmination of a period of coups (related to lagging company efforts to cut costs) in the early 1990s, John Smith replaced Robert Stempel as CEO. NBC apologized in 1993 for irregularities in its expose alleging that GM pickup trucks equipped with "saddle side" gas tanks had a tendency to explode. during a side impact. The government nevertheless asked the middle of the paper to be improved. Equity increased dramatically, indicating better management of the company's equity. EBIT has improved over the last two years, mainly due to the level of interest. paid decreased due to debt reduction. Profitability The gross profit margin increased from 1993 to 1994 because the cost of goods sold did not increase at the same level as sales. The operating profit margin ratio remained stable in 1995 compared to 1994 and the net profit margin also improved over the last two years. The return on total assets has increased due to the increase in the company's profitability, while the return on equity has decreased over the past two years. as shareholders' equity has increasedOverall, it is clear that the profitability of the company has increased over the last 2 years, mainly due to the decrease in liabilities, improvement in accounts receivable and better management of company debt. The company.