General Motors Corporation Final Exam question for MBA program

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                   GENERAL MOTORS CORPORATION AND SUBSIDIARIES

 

 

 

                        CONSOLIDATED STATEMENTS OF INCOME

 

 

 

                                                   Years Ended December 31,

 

                                                   ------------------------

 

                                                   2003      2002        2001

 

                                                   ----      ----        ----

 

                                                  (dollars in millions except per share amounts)

 

GENERAL MOTORS CORPORATION AND SUBSIDIARIES

 

Total net sales and revenues (Notes 1 and 24)  $185,524  $177,324    $169,051

 

                                                                               -------   -------     -------

 

Cost of sales and other expenses (Note 5)           152,071   146,793     138,847

 

Selling, general, and administrative expenses    21,008    20,690      19,433

 

Interest expense (Note 16)                                      9,464     7,503       8,317

 

                                                                                 -------   -------     -------

 

  Total costs and expenses                                  182,543   174,986     166,597

 

                                                                                  -------   -------     -------

 

Income from continuing operations before

 

  income taxes, equity income

 

  and minority interests                                     2,981     2,338       2,454

 

Income tax expense (Note 11)                             731       644       1,094

 

Equity income (loss) and minority interests         612       281        (138)

 

                                                                               -----     -----       -----

 

Income from continuing operations                 2,862     1,975       1,222

 

Loss from discontinued operations (Note 2)         (219)     (239)       (621)

 

Gain on sale of discontinued operations           1,179         -           -

 

                                                                                -----     -----       -----

 

  Net income                                                         3,822     1,736         601

 

Dividends on preference stocks                             -       (46)        (99)

 

                                                                                   -----     -----       -----

 

  Earnings attributable to common stocks

 

    (Note 20)                                                        $3,822    $1,690        $502

 

                                                                        =====     =====         ===

 

 

 

Basic earnings (loss) per share attributable to

 

  common stocks

 

$1-2/3 par value

 

  Continuing operations                           $5.10     $3.53       $2.21

 

  Discontinued operations                         $2.14    $(0.16)     $(0.42)

 

                                                                     ----      ----        ----

 

Earnings per share attributable to

 

  $1-2/3 par value                                        $7.24     $3.37       $1.79

 

                                                                    ====      ====        ====

 

Losses per share from discontinued operations

 

  attributable to Class H                        $(0.22)   $(0.21)     $(0.55)

 

                                                                  ====      ====        ====

 

 

 

Earnings (loss) per share attributable to

 

  common stocks assuming dilution

 

$1-2/3 par value

 

  Continuing operations                           $5.03     $3.51       $2.20

 

  Discontinued operations                         $2.11    $(0.16)     $(0.43)

 

                                                                           ----      ----        ----

 

Earnings per share attributable to $1-2/3

 

  par value                                                 $7.14     $3.35       $1.77

 

                                                                 ====      ====        ====

 

Losses per share from discontinued operations

 

  attributable to Class H                          $(0.22)   $(0.21)     $(0.55)

 

                                                                     ====      ====        ====

 

 

 

 

 

Reference should be made to the notes to consolidated financial statements.

 

 

 

                 GENERAL MOTORS CORPORATION AND SUBSIDIARIES

 

 

 

                         CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

                                                              December 31,

 

                                                              ------------

 

                                                                                  2003     2002

 

                                   ASSETS                                  (dollars in millions)

 

 

 

Cash and cash equivalents (Note 1)                         $32,554    $20,320

 

Other marketable securities  (Note 6)                       22,215     16,825

 

                                                                                        ------     ------

 

  Total cash and marketable securities                      54,769     37,145

 

Finance receivables - net (Note 8)                            173,137    134,643

 

Loans held for sale                                                   19,609     15,720

 

Accounts and notes receivable (less allowances)     20,532     16,337

 

Inventories (less allowances) (Note 9)                      10,960      9,737

 

Assets of discontinued operations                                -     18,653

 

Deferred income taxes (Note 11)                             27,190     39,767

 

Net equipment on operating leases

 

  (less accumulated depreciation) (Note 10)              34,383     31,026

 

Equity in net assets of nonconsolidated affiliates        6,032      5,097

 

Property - net (Note 12)                                           38,211     35,956

 

Intangible assets - net (Notes 1 and 13)                     4,760     10,796

 

Other assets (Note 14)                                             58,924     14,176

 

                                                                                 -------    -------

 

  Total assets                                                         $448,507   $369,053

 

                                                           =======    =======

 

 

 

            LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Accounts payable (principally trade)                       $25,422    $21,138

 

Notes and loans payable (Note 16)                            271,756    200,168

 

Liabilities of discontinued operations                             -      7,956

 

Postretirement benefits other than pensions (Note 17)       36,292     38,152

 

Pensions (Note 17)                                                       8,024     22,679

 

Deferred income taxes (Notes 11 and 15)                      7,508      6,523

 

Accrued expenses and other liabilities (Note 15)            73,930     65,344

 

                                                                                         -------    -------

 

  Total liabilities                                                      422,932    361,960

 

Minority interests                                                        307        279

 

Stockholders' equity (Note 19)

 

$1-2/3 par value common stock (outstanding,

 

  561,997,725 and  560,447,797 shares)                         937        936

 

Class H common stock (outstanding,

 

  958,284,272 shares in  2002)                                          -         96

 

Capital surplus (principally additional paid-in capital)    15,185     21,583

 

Retained earnings                                                              12,752     10,031

 

                                                                                             ------     ------

 

   Subtotal                                                                          28,874     32,646

 

Accumulated foreign currency translation adjustments        (1,815)    (2,784)

 

Net unrealized gains (losses) on derivatives                    51       (205)

 

Net unrealized gains on securities                                   618        372

 

Minimum pension liability adjustment                        (2,460)   (23,215)

 

                                                                                              -----     ------

 

  Accumulated other comprehensive loss                      (3,606)   (25,832)

 

                                                                                            -----     ------

 

     Total stockholders' equity                                      25,268      6,814

 

                                                                                     -------    -------

 

Total liabilities and stockholders' equity                $448,507   $369,053

 

                                                                                  =======    =======

 

Reference should be made to the notes to consolidated financial statements.

 

http://gb.volkswagen.com/fileadmin/g_bericht/gfx/konzernabschluss/englisch/an_08_incomestatement.gif

 

http://gb.volkswagen.com/fileadmin/g_bericht/gfx/konzernabschluss/englisch/an_09_balance_sheet.gif

 

Volkswagen and GM (questions 1-7)

 

  1. If you were to make a tender offer for Volkswagen, how would you decide much to offer?  What accounting differences between the U.S. and Germany should be taken into account?

 

 

 

  1. If Volkswagen were to sell bonds on the U.S. market, do you think its interest rate would be greater or lesser than GM? Why?

 

  1. Compute the following ratios for both companies in 2003.  What are some possible reasons for the differences in ratios?

 

  1. Which of the statements do you prefer? Why?  Which of the statements is more transparent?
  2. What differences should you look for when adjusting Volkswagen’s results to GAAP reporting standards?  In other words, what are some of the major accounting differences between Germany and the U.S. that are relevant to this industry?
  3. If you were a bank, to whom would you rather lend money? Why?
  4. If you were an equity investor, in whom would you rather invest? Why?

 

 

 

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    General Motors Corporation Final Exam question for MBA program
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