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General Motors (GM) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Discover General Motors' (GM) Piotroski F-Score Analysis for 2023. Learn about their financial health based on 9 key criteria. Final Score: 5/9.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running General Motors (GM) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is a measure from 0 to 9 used to grade a company's financial strength based on nine criteria. General Motors (GM) scored a 5 out of 9. Criteria review shows GM is profitable with a net income of $10.127 billion for 2023 and an operating cash flow of $20.93 billion, both earning positive points. The company's ROA is positive and Cash Flow from Operations exceeds net income, adding more points. Negatively, GM's leverage increased, and its current ratio decreased, both scoring zero. Share buyback reduces shares outstanding, adding a point, while Gross Margin dropped, earning zero. Asset Turnover improved, adding the final point. Overall GM shows mixed results with strong profitability and cash flow, but poorer liquidity and leverage trends.

Insights for Value Investors Seeking Stable Income

Based on the analysis, General Motors (GM) presents a balanced mix of strengths and weaknesses. Positives include strong profitability and good cash flow from operations, indicating financial health. However, rising leverage and declining liquidity could signify potential financial risks. The decreasing gross margin also suggests possible operational efficiency issues. For investors, it may be worth considering GM if looking for solid cash flow and consistent earnings. However, be mindful of the financial risks tied to their rising debt and weak short-term financial stability.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of General Motors (GM)

Company has a positive net income?

Netincome evaluates if a company is profitable after all expenses. Valuable insight into its fiscal health.

Historical Net Income of General Motors (GM)

For General Motors (GM), the net income for 2023 is $10.127 billion. As a positive figure, this meets the criterion and earns 1 point. Chart Analysis: Over the last 20 years, GM has experienced fluctuations, notably a sharp drop in 2008 with a net loss of -$30.943 billion, and an exceptional gain in 2009 of $104.82 billion owing to a structured bankruptcy. The current trend indicates stable profitability, which aligns with the 2023 net income figure.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash a company generates from its regular business activities. It is essential to assess as it reflects a company's ability to generate sufficient cash from its core activities to sustain its operations and growth.

Historical Operating Cash Flow of General Motors (GM)

For General Motors (GM), the CFO in 2023 stands at $20,930,000,000, which is positive. This earns GM a full point for this criterion. Over the last 20 years, although GM experienced some periods of negative CFO, specifically in 2008 and 2009, it has consistently posted positive numbers in recent years. This trend highlights GM's improved operational efficiency and ability to generate strong cash flow from its core activities, suggesting a favorable financial health position.

Return on Assets (ROA) are growing?

Explain the criterion for General Motors (GM) and why it is important to consider

Historical change in Return on Assets (ROA) of General Motors (GM)

Return on Assets (ROA) measures a company's ability to generate profit from its assets and is a vital indicator of efficiency and profitability. A rising ROA signals improved management effectiveness or optimized asset use.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income (OCF > NI): This criterion checks the quality of earnings by comparing the operating cash flow with net income. A higher OCF suggests more sustainable earnings.

Historical accruals of General Motors (GM)

In 2023, General Motors (GM) has an Operating Cash Flow of $20,930 million and a Net Income of $10,127 million. Since the operating cash flow is significantly higher than the net income, GM earns a point for this criterion. This indicates that GM's earnings are backed by strong cash flow from operations, which shows good earnings quality. Over the years, GM has shown volatility in both parameters, particularly with negative values during challenging times. However, the latest figures reflect strong operational performance. Accruals, while slightly increased at 0.0766, remain within acceptable limits, underscoring the robustness of cash-based earnings.

Liquidity of General Motors (GM)

Leverage is declining?

Change in leverage examines the company's use of debt compared to its equity capital. Lower leverage indicates that the company is using less debt relative to equity, which can be seen as a positive trend, reflecting financial stability.

Historical leverage of General Motors (GM)

General Motors (GM) saw its leverage increase from 0.2912 in 2022 to 0.3064 in 2023. This indicates that GM is using more debt relative to its equity. Historically, GM’s leverage has seen significant fluctuations, from a high of 0.4317 in 2004 to a low of 0.0408 in 2009. The recent trend shows increasing leverage, with a peak around 0.3214 in 2018 before a slight decline and recent rise. Increasing leverage is typically seen as negative as it may imply higher financial risk and potential solvency issues. There has been no improvement based on leverage criteria, so the score remains 0.

Current Ratio is growing?

The Current Ratio indicates a company's ability to pay off its short-term liabilities with its short-term assets. A higher Current Ratio shows stronger liquidity and financial health.

Historical Current Ratio of General Motors (GM)

The Current Ratio for General Motors (GM) decreased from 1.1018 in 2022 to 1.0759 in 2023. This decline indicates a slight deterioration in GM's short-term liquidity position, meaning the company has fewer short-term assets available to cover short-term liabilities. Historically, the last 20 years of GM's Current Ratio data shows fluctuating trends, with a notable dip in 2008 to 0.5855. When compared to the industry median, which stood at 1.262 in 2023, GM's current ratio is considerably below the average, showing potentially weaker liquidity compared to its peers. This criterion results in a score of 0 for the Piotroski analysis, as the decrease in the current ratio indicates a less favorable trend.

Number of shares not diluted?

Change in Shares Outstanding refers to the difference in the number of shares a company has circulating in the market over a given period.

Historical outstanding shares of General Motors (GM)

GM's outstanding shares decreased from 1,445,000,000 in 2022 to 1,364,000,000 in 2023, resulting in a score of 1. This trend indicates effective share buybacks by GM and increased value for shareholders. Historical data also show fluctuating outstanding shares, but the latest decrease is a positive signal in this context.

Operating of General Motors (GM)

Cross Margin is growing?

Change in Gross Margin for General Motors (GM) involves comparing the Gross Margin of the current year to the previous year to assess if the company is improving its efficiency in converting revenue to gross profit. Gross Margin represents the portion of revenue that exceeds the cost of goods sold (COGS), and is an essential indicator of financial health and operational performance.

Historical gross margin of General Motors (GM)

In 2023, General Motors reported a Gross Margin of 0.1114, compared to 0.1339 in 2022. This represents a decrease in Gross Margin, indicating a decline in the company's efficiency in generating gross profit from its revenues. Given the criteria, a decrease in Gross Margin results in a score of 0 out of 1 point. Over the last 20 years, GM's Gross Margin has seen substantial fluctuations, with a peak of 0.2496 in 2003 and a low of -0.0727 in 2009. Currently, GM's Gross Margin stands below the industry median of 0.1825 in 2023. This downward trend could signal potential structural challenges or increasing competition in the automotive industry.

Asset Turnover Ratio is growing?

Change in Asset Turnover assesses how efficiently a company is using its assets to generate revenue; an increase suggests improved efficiency.

Historical asset turnover ratio of General Motors (GM)

Asset Turnover for GM has increased from 0.6162 in 2022 to 0.6399 in 2023, which adds 1 point in the Piotroski analysis. Over the past 20 years, GM's Asset Turnover has significantly fluctuated, peaking at 1.2419 in 2008 and reaching its lowest at 0.3979 in 2005. Despite its past volatility, the recent increment in 2023 showcases a potential improvement in operational efficiency, which is a positive indicator.


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