Intrinsic value of General Motors Company - GM

Previous Close

$38.78

  Intrinsic Value

$29.92

stock screener

  Rating & Target

sell

-23%

Previous close

$38.78

 
Intrinsic value

$29.92

 
Up/down potential

-23%

 
Rating

sell

We calculate the intrinsic value of GM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 54.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  149,990
  153,440
  157,383
  161,810
  166,716
  172,098
  177,960
  184,304
  191,139
  198,474
  206,322
  214,696
  223,612
  233,087
  243,142
  253,797
  265,076
  277,003
  289,606
  302,913
  316,954
  331,761
  347,369
  363,814
  381,134
  399,370
  418,564
  438,762
  460,011
  482,362
Variable operating expenses, $m
  141,129
  144,363
  148,058
  152,208
  156,805
  161,850
  167,343
  173,289
  179,695
  186,569
  193,366
  201,214
  209,570
  218,450
  227,874
  237,860
  248,431
  259,609
  271,421
  283,892
  297,051
  310,928
  325,556
  340,968
  357,201
  374,292
  392,281
  411,211
  431,125
  452,073
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  141,129
  144,363
  148,058
  152,208
  156,805
  161,850
  167,343
  173,289
  179,695
  186,569
  193,366
  201,214
  209,570
  218,450
  227,874
  237,860
  248,431
  259,609
  271,421
  283,892
  297,051
  310,928
  325,556
  340,968
  357,201
  374,292
  392,281
  411,211
  431,125
  452,073
Operating income, $m
  8,861
  9,077
  9,325
  9,603
  9,911
  10,249
  10,617
  11,015
  11,444
  11,905
  12,956
  13,482
  14,041
  14,636
  15,268
  15,937
  16,645
  17,394
  18,186
  19,021
  19,903
  20,833
  21,813
  22,845
  23,933
  25,078
  26,283
  27,552
  28,886
  30,289
EBITDA, $m
  22,847
  23,373
  23,973
  24,648
  25,395
  26,215
  27,108
  28,074
  29,115
  30,233
  31,428
  32,704
  34,062
  35,505
  37,037
  38,660
  40,378
  42,195
  44,114
  46,141
  48,280
  50,536
  52,913
  55,418
  58,056
  60,834
  63,758
  66,835
  70,071
  73,476
Interest expense (income), $m
  2,323
  5,667
  5,867
  6,106
  6,379
  6,685
  7,025
  7,397
  7,803
  8,242
  8,714
  9,222
  9,765
  10,344
  10,961
  11,617
  12,312
  13,050
  13,830
  14,655
  15,527
  16,448
  17,420
  18,444
  19,524
  20,662
  21,860
  23,122
  24,450
  25,847
  27,318
Earnings before tax, $m
  3,193
  3,210
  3,219
  3,224
  3,226
  3,224
  3,220
  3,213
  3,203
  3,191
  3,734
  3,717
  3,697
  3,675
  3,651
  3,624
  3,595
  3,564
  3,530
  3,494
  3,455
  3,413
  3,369
  3,321
  3,271
  3,218
  3,161
  3,102
  3,038
  2,972
Tax expense, $m
  862
  867
  869
  870
  871
  871
  869
  867
  865
  861
  1,008
  1,004
  998
  992
  986
  979
  971
  962
  953
  943
  933
  922
  910
  897
  883
  869
  854
  837
  820
  802
Net income, $m
  2,331
  2,343
  2,350
  2,353
  2,355
  2,354
  2,351
  2,345
  2,338
  2,329
  2,726
  2,713
  2,699
  2,683
  2,665
  2,646
  2,625
  2,602
  2,577
  2,550
  2,522
  2,492
  2,459
  2,425
  2,388
  2,349
  2,308
  2,264
  2,218
  2,169

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  231,824
  237,156
  243,251
  250,093
  257,675
  265,994
  275,053
  284,859
  295,424
  306,761
  318,890
  331,833
  345,613
  360,258
  375,798
  392,267
  409,700
  428,135
  447,614
  468,181
  489,882
  512,768
  536,892
  562,309
  589,079
  617,264
  646,931
  678,149
  710,991
  745,536
Adjusted assets (=assets-cash), $m
  231,824
  237,156
  243,251
  250,093
  257,675
  265,994
  275,053
  284,859
  295,424
  306,761
  318,890
  331,833
  345,613
  360,258
  375,798
  392,267
  409,700
  428,135
  447,614
  468,181
  489,882
  512,768
  536,892
  562,309
  589,079
  617,264
  646,931
  678,149
  710,991
  745,536
Revenue / Adjusted assets
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
Average production assets, $m
  85,944
  87,921
  90,181
  92,717
  95,528
  98,612
  101,971
  105,606
  109,523
  113,726
  118,223
  123,021
  128,129
  133,559
  139,320
  145,426
  151,888
  158,723
  165,944
  173,569
  181,615
  190,099
  199,042
  208,465
  218,390
  228,839
  239,837
  251,411
  263,587
  276,393
Working capital, $m
  -1,950
  -1,995
  -2,046
  -2,104
  -2,167
  -2,237
  -2,313
  -2,396
  -2,485
  -2,580
  -2,682
  -2,791
  -2,907
  -3,030
  -3,161
  -3,299
  -3,446
  -3,601
  -3,765
  -3,938
  -4,120
  -4,313
  -4,516
  -4,730
  -4,955
  -5,192
  -5,441
  -5,704
  -5,980
  -6,271
Total debt, $m
  108,654
  113,074
  118,127
  123,799
  130,085
  136,981
  144,491
  152,620
  161,378
  170,777
  180,832
  191,561
  202,985
  215,126
  228,009
  241,661
  256,113
  271,396
  287,544
  304,594
  322,584
  341,557
  361,555
  382,626
  404,818
  428,184
  452,777
  478,657
  505,884
  534,522
Total liabilities, $m
  192,182
  196,602
  201,655
  207,327
  213,613
  220,509
  228,019
  236,148
  244,906
  254,305
  264,360
  275,089
  286,513
  298,654
  311,537
  325,189
  339,641
  354,924
  371,072
  388,122
  406,112
  425,085
  445,083
  466,154
  488,346
  511,712
  536,305
  562,185
  589,412
  618,050
Total equity, $m
  39,642
  40,554
  41,596
  42,766
  44,062
  45,485
  47,034
  48,711
  50,517
  52,456
  54,530
  56,743
  59,100
  61,604
  64,262
  67,078
  70,059
  73,211
  76,542
  80,059
  83,770
  87,683
  91,808
  96,155
  100,732
  105,552
  110,625
  115,963
  121,580
  127,487
Total liabilities and equity, $m
  231,824
  237,156
  243,251
  250,093
  257,675
  265,994
  275,053
  284,859
  295,423
  306,761
  318,890
  331,832
  345,613
  360,258
  375,799
  392,267
  409,700
  428,135
  447,614
  468,181
  489,882
  512,768
  536,891
  562,309
  589,078
  617,264
  646,930
  678,148
  710,992
  745,537
Debt-to-equity ratio
  2.740
  2.790
  2.840
  2.890
  2.950
  3.010
  3.070
  3.130
  3.190
  3.260
  3.320
  3.380
  3.430
  3.490
  3.550
  3.600
  3.660
  3.710
  3.760
  3.800
  3.850
  3.900
  3.940
  3.980
  4.020
  4.060
  4.090
  4.130
  4.160
  4.190
Adjusted equity ratio
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,331
  2,343
  2,350
  2,353
  2,355
  2,354
  2,351
  2,345
  2,338
  2,329
  2,726
  2,713
  2,699
  2,683
  2,665
  2,646
  2,625
  2,602
  2,577
  2,550
  2,522
  2,492
  2,459
  2,425
  2,388
  2,349
  2,308
  2,264
  2,218
  2,169
Depreciation, amort., depletion, $m
  13,987
  14,296
  14,649
  15,045
  15,484
  15,966
  16,491
  17,059
  17,671
  18,328
  18,472
  19,222
  20,020
  20,869
  21,769
  22,723
  23,733
  24,800
  25,929
  27,120
  28,377
  29,703
  31,100
  32,573
  34,123
  35,756
  37,475
  39,283
  41,185
  43,186
Funds from operations, $m
  16,318
  16,639
  16,998
  17,398
  17,839
  18,320
  18,841
  19,404
  20,009
  20,657
  21,198
  21,935
  22,719
  23,552
  24,434
  25,369
  26,357
  27,402
  28,506
  29,671
  30,899
  32,194
  33,559
  34,997
  36,511
  38,105
  39,782
  41,547
  43,403
  45,356
Change in working capital, $m
  -38
  -45
  -51
  -58
  -64
  -70
  -76
  -82
  -89
  -95
  -102
  -109
  -116
  -123
  -131
  -139
  -147
  -155
  -164
  -173
  -183
  -192
  -203
  -214
  -225
  -237
  -250
  -263
  -276
  -291
Cash from operations, $m
  16,356
  16,684
  17,050
  17,456
  17,903
  18,390
  18,918
  19,487
  20,098
  20,752
  21,300
  22,044
  22,835
  23,675
  24,565
  25,507
  26,504
  27,557
  28,670
  29,844
  31,082
  32,387
  33,762
  35,211
  36,736
  38,342
  40,032
  41,810
  43,680
  45,646
Maintenance CAPEX, $m
  -13,166
  -13,429
  -13,738
  -14,091
  -14,487
  -14,926
  -15,408
  -15,933
  -16,501
  -17,113
  -17,770
  -18,472
  -19,222
  -20,020
  -20,869
  -21,769
  -22,723
  -23,733
  -24,800
  -25,929
  -27,120
  -28,377
  -29,703
  -31,100
  -32,573
  -34,123
  -35,756
  -37,475
  -39,283
  -41,185
New CAPEX, $m
  -1,685
  -1,977
  -2,260
  -2,537
  -2,811
  -3,084
  -3,358
  -3,635
  -3,917
  -4,203
  -4,497
  -4,798
  -5,109
  -5,429
  -5,761
  -6,105
  -6,463
  -6,835
  -7,221
  -7,625
  -8,045
  -8,485
  -8,943
  -9,423
  -9,924
  -10,449
  -10,998
  -11,573
  -12,176
  -12,807
Cash from investing activities, $m
  -14,851
  -15,406
  -15,998
  -16,628
  -17,298
  -18,010
  -18,766
  -19,568
  -20,418
  -21,316
  -22,267
  -23,270
  -24,331
  -25,449
  -26,630
  -27,874
  -29,186
  -30,568
  -32,021
  -33,554
  -35,165
  -36,862
  -38,646
  -40,523
  -42,497
  -44,572
  -46,754
  -49,048
  -51,459
  -53,992
Free cash flow, $m
  1,506
  1,278
  1,052
  829
  605
  379
  151
  -82
  -320
  -564
  -966
  -1,226
  -1,496
  -1,775
  -2,065
  -2,367
  -2,682
  -3,010
  -3,352
  -3,710
  -4,084
  -4,475
  -4,884
  -5,312
  -5,761
  -6,230
  -6,723
  -7,238
  -7,779
  -8,346
Issuance/(repayment) of debt, $m
  3,703
  4,420
  5,053
  5,673
  6,286
  6,897
  7,510
  8,129
  8,758
  9,399
  10,055
  10,729
  11,424
  12,141
  12,883
  13,653
  14,452
  15,283
  16,148
  17,050
  17,990
  18,973
  19,998
  21,071
  22,192
  23,366
  24,594
  25,880
  27,227
  28,638
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  170
  356
  551
  754
  966
  1,189
  1,422
  1,666
  1,922
  2,190
  2,471
  2,765
  3,074
  3,398
  3,738
Cash from financing (excl. dividends), $m  
  3,703
  4,420
  5,053
  5,673
  6,286
  6,897
  7,510
  8,129
  8,758
  9,399
  10,055
  10,729
  11,424
  12,141
  12,883
  13,823
  14,808
  15,834
  16,902
  18,016
  19,179
  20,395
  21,664
  22,993
  24,382
  25,837
  27,359
  28,954
  30,625
  32,376
Total cash flow (excl. dividends), $m
  5,209
  5,698
  6,105
  6,501
  6,890
  7,276
  7,661
  8,047
  8,438
  8,835
  9,089
  9,503
  9,928
  10,366
  10,818
  11,456
  12,126
  12,824
  13,550
  14,306
  15,096
  15,920
  16,780
  17,680
  18,621
  19,606
  20,636
  21,715
  22,846
  24,030
Retained Cash Flow (-), $m
  -782
  -912
  -1,042
  -1,170
  -1,297
  -1,423
  -1,549
  -1,677
  -1,806
  -1,939
  -2,074
  -2,213
  -2,356
  -2,504
  -2,657
  -2,816
  -2,981
  -3,152
  -3,331
  -3,517
  -3,711
  -3,914
  -4,125
  -4,346
  -4,578
  -4,820
  -5,073
  -5,338
  -5,616
  -5,907
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  4,427
  4,787
  5,063
  5,331
  5,594
  5,853
  6,112
  6,371
  6,632
  6,896
  7,015
  7,290
  7,572
  7,862
  8,160
  8,640
  9,145
  9,671
  10,219
  10,789
  11,385
  12,006
  12,655
  13,334
  14,044
  14,786
  15,563
  16,377
  17,230
  18,122
Discount rate, %
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
  4,095
  4,066
  3,917
  3,725
  3,498
  3,244
  2,971
  2,686
  2,398
  2,111
  1,795
  1,537
  1,295
  1,075
  876
  716
  574
  451
  347
  260
  191
  137
  95
  64
  42
  27
  17
  10
  6
  3
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  99.8
  99.4
  98.9
  98.2
  97.3
  96.3
  95.1
  93.9
  92.5
  91.0
  89.4
  87.8
  86.1
  84.4
  82.6

General Motors Company designs, builds and sells cars, trucks, crossovers and automobile parts. The Company's segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). The Company provides automotive financing services through General Motors Financial Company, Inc. The Company develops, manufactures and/or markets vehicles in North America under the brands, including Buick, Cadillac, Chevrolet and GMC. The Company also develops, manufactures and/or markets vehicles outside North America under the brands, including Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall. The Company offers a range of after-sale vehicle services and products through the dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties. GM Financial is an automotive finance company, which provides automobile finance solutions.

FINANCIAL RATIOS  of  General Motors Company (GM)

Valuation Ratios
P/E Ratio 6.2
Price to Sales 0.3
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 3.5
Price to Free Cash Flow -4.6
Growth Rates
Sales Growth Rate 9.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.6%
Cap. Spend. - 3 Yr. Gr. Rate 24.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 117.1%
Total Debt to Equity 171.4%
Interest Coverage 6
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 4.9%
Return On Total Capital 8.5%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 22.5%
Return On Equity - 3 Yr. Avg. 19.5%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 12.8%
Gross Margin - 3 Yr. Avg. 11.2%
EBITDA Margin 14.7%
EBITDA Margin - 3 Yr. Avg. 11.5%
Operating Margin 5.7%
Oper. Margin - 3 Yr. Avg. 3.5%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 4.9%
Net Profit Margin 5.7%
Net Profit Margin - 3 Yr. Avg. 4.9%
Effective Tax Rate 20.7%
Eff/ Tax Rate - 3 Yr. Avg. 0.5%
Payout Ratio 25.1%

GM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GM stock intrinsic value calculation we used $147049 million for the last fiscal year's total revenue generated by General Motors Company. The default revenue input number comes from 0001 income statement of General Motors Company. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GM stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.1%, whose default value for GM is calculated based on our internal credit rating of General Motors Company, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of General Motors Company.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GM stock the variable cost ratio is equal to 94.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for GM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for General Motors Company.

Corporate tax rate of 27% is the nominal tax rate for General Motors Company. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GM are equal to 57.3%.

Life of production assets of 6.4 years is the average useful life of capital assets used in General Motors Company operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GM is equal to -1.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $38860 million for General Motors Company - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1409.509 million for General Motors Company is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of General Motors Company at the current share price and the inputted number of shares is $54.7 billion.

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