Working Capital Startegy Papaer

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Working Capital Strategies Paper
Philip Wheeler, Efrain Fuentes, Onorio Dimas, Michele Cox
FIN/419
February 9, 2013
Sarah Newton

Working Capital Strategies Paper
General Motors has continued to expand both their product lines and their influence throughout the world. The company is building factories in several countries only dreamed of a decade ago, including China and continuing to turn profits each year. GM seems to focus on profitability and high returns on their investments. Each business venture that GM decides to take, seem to have been calculated to make them money. Third Quarter Report

At the end of January 2013, GM reported a 16 percent increase in vehicle sales at 194,699, compared to January 2012. These sales were in the U.S. alone and retail sales were up 24 percent. In the latest financial release, which was for the third quarter, stated that GM’s net revenue was $37.6 billion compared to$36.7 billion in 2011. Earnings before interest and tax (EBIT) adjusted was $2.3 billion compared with $2.2 billion in 2011. In the financial release, it was also stated that third quarter net income attributable to common stockholders of $1.5 billion, or $0.89 per fully diluted share including the impact of special items, which reduced net income by $0.1 billion and diluted earnings per share by $0.04. This was down from $1.7 billion or $1.03 per fully diluted share in 2011. With this information, it is evident that the earnings per share or EPS, has decreased over the past year, while it’s EBIT has risen, if only by $0.1 billion. General Motors international financial report shows a rise as well. GM International Operations reported EBIT-adjusted of $0.7 billion compared with $0.4 billion in 2011. GM Europe reported an EBIT-adjusted of $(0.5) billion compared with $(0.3) billion in 2011 and GM South America reported EBIT-adjusted of $0.1 billion. The cash flow from operating activities, for the third quarter of 2012, was $3.1 billion, up $1.3 billion and...
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