Intrinsic value of General Motors - GM

Previous Close

$35.55

  Intrinsic Value

$39.20

stock screener

  Rating & Target

hold

+10%

Previous close

$35.55

 
Intrinsic value

$39.20

 
Up/down potential

+10%

 
Rating

hold

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 50.2

 

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
  148,500
  151,915
  155,819
  160,203
  165,060
  170,389
  176,191
  182,473
  189,240
  196,503
  204,272
  212,563
  221,390
  230,771
  240,726
  251,275
  262,442
  274,251
  286,729
  299,903
  313,805
  328,465
  343,918
  360,199
  377,347
  395,402
  414,405
  434,403
  455,441
  477,569
Variable operating expenses, $m
  138,539
  141,712
  145,338
  149,410
  153,922
  158,873
  164,264
  170,099
  176,386
  183,132
  189,765
  197,467
  205,667
  214,382
  223,630
  233,430
  243,804
  254,775
  266,366
  278,605
  291,519
  305,138
  319,494
  334,619
  350,549
  367,321
  384,975
  403,553
  423,097
  443,654
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
  138,539
  141,712
  145,338
  149,410
  153,922
  158,873
  164,264
  170,099
  176,386
  183,132
  189,765
  197,467
  205,667
  214,382
  223,630
  233,430
  243,804
  254,775
  266,366
  278,605
  291,519
  305,138
  319,494
  334,619
  350,549
  367,321
  384,975
  403,553
  423,097
  443,654
Operating income, $m
  9,961
  10,204
  10,481
  10,792
  11,137
  11,516
  11,928
  12,374
  12,854
  13,370
  14,507
  15,096
  15,723
  16,389
  17,096
  17,845
  18,638
  19,477
  20,363
  21,298
  22,286
  23,327
  24,424
  25,580
  26,798
  28,080
  29,430
  30,850
  32,344
  33,916
EBITDA, $m
  22,655
  23,176
  23,771
  24,440
  25,181
  25,994
  26,879
  27,837
  28,870
  29,978
  31,163
  32,428
  33,774
  35,206
  36,724
  38,334
  40,037
  41,839
  43,742
  45,752
  47,873
  50,109
  52,467
  54,951
  57,567
  60,321
  63,220
  66,271
  69,480
  72,856
Interest expense (income), $m
  2,323
  5,088
  5,279
  5,504
  5,761
  6,049
  6,369
  6,720
  7,102
  7,515
  7,961
  8,439
  8,950
  9,496
  10,077
  10,694
  11,350
  12,044
  12,779
  13,556
  14,378
  15,245
  16,160
  17,125
  18,142
  19,214
  20,343
  21,531
  22,782
  24,098
  25,483
Earnings before tax, $m
  4,873
  4,925
  4,977
  5,032
  5,088
  5,147
  5,208
  5,272
  5,339
  5,410
  6,068
  6,146
  6,227
  6,312
  6,401
  6,495
  6,594
  6,698
  6,806
  6,921
  7,041
  7,167
  7,299
  7,438
  7,584
  7,738
  7,899
  8,068
  8,246
  8,433
Tax expense, $m
  1,316
  1,330
  1,344
  1,359
  1,374
  1,390
  1,406
  1,424
  1,442
  1,461
  1,638
  1,659
  1,681
  1,704
  1,728
  1,754
  1,780
  1,808
  1,838
  1,869
  1,901
  1,935
  1,971
  2,008
  2,048
  2,089
  2,133
  2,178
  2,226
  2,277
Net income, $m
  3,558
  3,595
  3,633
  3,673
  3,714
  3,757
  3,802
  3,849
  3,898
  3,949
  4,430
  4,486
  4,546
  4,608
  4,673
  4,742
  4,814
  4,889
  4,969
  5,052
  5,140
  5,232
  5,328
  5,430
  5,537
  5,649
  5,766
  5,890
  6,020
  6,156

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
  216,788
  221,774
  227,474
  233,873
  240,963
  248,742
  257,214
  266,384
  276,263
  286,865
  298,208
  310,311
  323,197
  336,892
  351,425
  366,825
  383,127
  400,367
  418,582
  437,815
  458,109
  479,511
  502,070
  525,838
  550,872
  577,229
  604,972
  634,165
  664,877
  697,182
Adjusted assets (=assets-cash), $m
  216,788
  221,774
  227,474
  233,873
  240,963
  248,742
  257,214
  266,384
  276,263
  286,865
  298,208
  310,311
  323,197
  336,892
  351,425
  366,825
  383,127
  400,367
  418,582
  437,815
  458,109
  479,511
  502,070
  525,838
  550,872
  577,229
  604,972
  634,165
  664,877
  697,182
Revenue / Adjusted assets
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
  0.685
Average production assets, $m
  78,705
  80,515
  82,584
  84,907
  87,482
  90,306
  93,381
  96,711
  100,297
  104,146
  108,264
  112,658
  117,337
  122,309
  127,585
  133,176
  139,094
  145,353
  151,966
  158,949
  166,316
  174,086
  182,276
  190,906
  199,994
  209,563
  219,635
  230,234
  241,384
  253,112
Working capital, $m
  -5,049
  -5,165
  -5,298
  -5,447
  -5,612
  -5,793
  -5,991
  -6,204
  -6,434
  -6,681
  -6,945
  -7,227
  -7,527
  -7,846
  -8,185
  -8,543
  -8,923
  -9,325
  -9,749
  -10,197
  -10,669
  -11,168
  -11,693
  -12,247
  -12,830
  -13,444
  -14,090
  -14,770
  -15,485
  -16,237
Total debt, $m
  97,756
  101,919
  106,679
  112,022
  117,942
  124,438
  131,511
  139,168
  147,417
  156,270
  165,741
  175,847
  186,607
  198,043
  210,178
  223,037
  236,649
  251,044
  266,254
  282,314
  299,259
  317,129
  335,966
  355,813
  376,716
  398,724
  421,889
  446,266
  471,911
  498,885
Total liabilities, $m
  181,018
  185,181
  189,941
  195,284
  201,204
  207,700
  214,773
  222,430
  230,679
  239,532
  249,003
  259,109
  269,869
  281,305
  293,440
  306,299
  319,911
  334,306
  349,516
  365,576
  382,521
  400,391
  419,228
  439,075
  459,978
  481,986
  505,151
  529,528
  555,173
  582,147
Total equity, $m
  35,770
  36,593
  37,533
  38,589
  39,759
  41,042
  42,440
  43,953
  45,583
  47,333
  49,204
  51,201
  53,327
  55,587
  57,985
  60,526
  63,216
  66,061
  69,066
  72,239
  75,588
  79,119
  82,841
  86,763
  90,894
  95,243
  99,820
  104,637
  109,705
  115,035
Total liabilities and equity, $m
  216,788
  221,774
  227,474
  233,873
  240,963
  248,742
  257,213
  266,383
  276,262
  286,865
  298,207
  310,310
  323,196
  336,892
  351,425
  366,825
  383,127
  400,367
  418,582
  437,815
  458,109
  479,510
  502,069
  525,838
  550,872
  577,229
  604,971
  634,165
  664,878
  697,182
Debt-to-equity ratio
  2.730
  2.790
  2.840
  2.900
  2.970
  3.030
  3.100
  3.170
  3.230
  3.300
  3.370
  3.430
  3.500
  3.560
  3.620
  3.680
  3.740
  3.800
  3.860
  3.910
  3.960
  4.010
  4.060
  4.100
  4.140
  4.190
  4.230
  4.260
  4.300
  4.340
Adjusted equity ratio
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165
  0.165

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,558
  3,595
  3,633
  3,673
  3,714
  3,757
  3,802
  3,849
  3,898
  3,949
  4,430
  4,486
  4,546
  4,608
  4,673
  4,742
  4,814
  4,889
  4,969
  5,052
  5,140
  5,232
  5,328
  5,430
  5,537
  5,649
  5,766
  5,890
  6,020
  6,156
Depreciation, amort., depletion, $m
  12,693
  12,972
  13,290
  13,648
  14,044
  14,478
  14,951
  15,463
  16,015
  16,607
  16,656
  17,332
  18,052
  18,817
  19,628
  20,489
  21,399
  22,362
  23,379
  24,454
  25,587
  26,783
  28,043
  29,370
  30,768
  32,240
  33,790
  35,421
  37,136
  38,940
Funds from operations, $m
  16,251
  16,567
  16,924
  17,321
  17,758
  18,235
  18,753
  19,312
  19,913
  20,556
  21,086
  21,818
  22,597
  23,424
  24,301
  25,230
  26,213
  27,251
  28,348
  29,506
  30,727
  32,014
  33,371
  34,800
  36,305
  37,889
  39,556
  41,310
  43,155
  45,096
Change in working capital, $m
  -99
  -116
  -133
  -149
  -165
  -181
  -197
  -214
  -230
  -247
  -264
  -282
  -300
  -319
  -338
  -359
  -380
  -402
  -424
  -448
  -473
  -498
  -525
  -554
  -583
  -614
  -646
  -680
  -715
  -752
Cash from operations, $m
  16,350
  16,683
  17,056
  17,470
  17,923
  18,416
  18,951
  19,526
  20,143
  20,803
  21,350
  22,100
  22,897
  23,743
  24,640
  25,589
  26,592
  27,653
  28,772
  29,954
  31,200
  32,513
  33,896
  35,354
  36,888
  38,503
  40,202
  41,990
  43,871
  45,848
Maintenance CAPEX, $m
  -11,869
  -12,108
  -12,387
  -12,705
  -13,063
  -13,459
  -13,893
  -14,366
  -14,879
  -15,430
  -16,023
  -16,656
  -17,332
  -18,052
  -18,817
  -19,628
  -20,489
  -21,399
  -22,362
  -23,379
  -24,454
  -25,587
  -26,783
  -28,043
  -29,370
  -30,768
  -32,240
  -33,790
  -35,421
  -37,136
New CAPEX, $m
  -1,557
  -1,810
  -2,069
  -2,323
  -2,574
  -2,824
  -3,076
  -3,329
  -3,587
  -3,849
  -4,118
  -4,394
  -4,678
  -4,972
  -5,276
  -5,591
  -5,918
  -6,259
  -6,613
  -6,982
  -7,368
  -7,770
  -8,190
  -8,629
  -9,088
  -9,569
  -10,072
  -10,599
  -11,150
  -11,728
Cash from investing activities, $m
  -13,426
  -13,918
  -14,456
  -15,028
  -15,637
  -16,283
  -16,969
  -17,695
  -18,466
  -19,279
  -20,141
  -21,050
  -22,010
  -23,024
  -24,093
  -25,219
  -26,407
  -27,658
  -28,975
  -30,361
  -31,822
  -33,357
  -34,973
  -36,672
  -38,458
  -40,337
  -42,312
  -44,389
  -46,571
  -48,864
Free cash flow, $m
  2,924
  2,765
  2,600
  2,441
  2,286
  2,133
  1,982
  1,830
  1,678
  1,524
  1,210
  1,050
  887
  720
  547
  369
  185
  -5
  -203
  -408
  -622
  -844
  -1,076
  -1,318
  -1,571
  -1,834
  -2,110
  -2,398
  -2,700
  -3,016
Issuance/(repayment) of debt, $m
  3,537
  4,163
  4,759
  5,343
  5,920
  6,496
  7,074
  7,657
  8,249
  8,853
  9,471
  10,106
  10,760
  11,436
  12,135
  12,859
  13,612
  14,395
  15,210
  16,059
  16,945
  17,870
  18,837
  19,847
  20,903
  22,008
  23,165
  24,376
  25,645
  26,974
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  3,537
  4,163
  4,759
  5,343
  5,920
  6,496
  7,074
  7,657
  8,249
  8,853
  9,471
  10,106
  10,760
  11,436
  12,135
  12,859
  13,612
  14,395
  15,210
  16,059
  16,945
  17,870
  18,837
  19,847
  20,903
  22,008
  23,165
  24,376
  25,645
  26,974
Total cash flow (excl. dividends), $m
  6,461
  6,928
  7,359
  7,784
  8,207
  8,629
  9,055
  9,487
  9,927
  10,377
  10,681
  11,156
  11,647
  12,155
  12,682
  13,229
  13,798
  14,390
  15,007
  15,651
  16,324
  17,026
  17,760
  18,529
  19,332
  20,174
  21,055
  21,978
  22,945
  23,959
Retained Cash Flow (-), $m
  -769
  -823
  -940
  -1,056
  -1,170
  -1,284
  -1,398
  -1,513
  -1,630
  -1,749
  -1,872
  -1,997
  -2,126
  -2,260
  -2,398
  -2,541
  -2,690
  -2,845
  -3,006
  -3,173
  -3,348
  -3,531
  -3,722
  -3,922
  -4,131
  -4,349
  -4,578
  -4,817
  -5,068
  -5,330
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
  5,692
  6,105
  6,419
  6,729
  7,037
  7,346
  7,658
  7,974
  8,297
  8,627
  8,809
  9,159
  9,521
  9,895
  10,284
  10,688
  11,108
  11,545
  12,002
  12,478
  12,975
  13,495
  14,038
  14,607
  15,202
  15,825
  16,477
  17,161
  17,877
  18,628
Discount rate, %
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
  5,285
  5,226
  5,027
  4,782
  4,499
  4,186
  3,851
  3,502
  3,146
  2,791
  2,401
  2,075
  1,768
  1,483
  1,224
  993
  792
  619
  475
  356
  262
  188
  131
  90
  59
  38
  24
  15
  9
  5
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
  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

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 (GM)

Valuation Ratios
P/E Ratio 5.7
Price to Sales 0.3
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 3.2
Price to Free Cash Flow -4.2
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 $145588 million for the last fiscal year's total revenue generated by General Motors. The default revenue input number comes from 0001 income statement of General Motors. 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 7.7%, whose default value for GM is calculated based on our internal credit rating of General Motors, 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.
    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 93.3%.

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.

Corporate tax rate of 27% is the nominal tax rate for General Motors. 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 53%.

Life of production assets of 6.5 years is the average useful life of capital assets used in General Motors 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 -3.4%. 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 - $35001 million for General Motors - 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 1410.89 million for General Motors 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 at the current share price and the inputted number of shares is $50.2 billion.

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COMPANY NEWS

▶ Global automotive supplier announces $33M expansion in Vandalia, 35 new jobs   [Nov-15-18 01:24PM  American City Business Journals]
▶ Why General Motors Stock Is Down 14% So Far in 2018   [Nov-14-18 10:17PM  Motley Fool]
▶ Lime Car-Sharing Kicks Off As GM, Ford Target E-Scooters, E-Bikes   [Nov-13-18 04:08PM  Investor's Business Daily]
▶ GM Stock Is a Mixed Bag   [01:47PM  InvestorPlace]
▶ [$$] Government Motors Is Back   [Nov-11-18 07:36PM  The Wall Street Journal]
▶ Cadillac May Be Ready to Make a Comeback   [12:05PM  Motley Fool]
▶ These Details On A New Volkswagen Electric Car Emerge: Tesla Or Bolt Rival?   [Nov-08-18 04:09PM  Investor's Business Daily]
▶ Carmakers Cement Their Shift Away From Just Making Cars   [04:03PM  Investor's Business Daily]
▶ 3 Top Value Stocks to Buy in November   [03:24PM  Motley Fool]
▶ 3 Top Dividend Stocks to Buy in November   [12:00AM  Motley Fool]
▶ 3 Top Dividend Stocks to Buy Right Now   [Nov-07-18 02:31PM  Motley Fool]
▶ Is There More Gas Left in Tesla?   [08:30AM  InvestorPlace]
▶ Strong Earnings Should Move General Motors Stock Higher   [Nov-05-18 01:16PM  InvestorPlace]
▶ Cadillac puts car subscription program on pause   [11:37AM  American City Business Journals]
▶ Cadillac Cancels $1,800-a-Month Car-Subscription Service   [Nov-02-18 08:20PM  The Wall Street Journal]
▶ Cadillac Cancels Car-Subscription Service   [02:57PM  The Wall Street Journal]
▶ Cadillac Cancels $1,800-a-Month Car-Subscription Service   [02:57PM  The Wall Street Journal]
▶ China Driving Auto Stocks Higher   [09:58AM  Investopedia]
▶ How General Motors Call Prices Doubled   [03:56PM  TheStreet.com]
▶ GM Shares Soar on Earnings Beat   [01:57PM  GuruFocus.com]

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