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Analysis on Gm Financial Statement


Submitted By machong169
Words 3746
Pages 15
CHapter 13

Changes from Twelfth Edition

Updated from Twelfth Edition. Porter Lumber, Inc. has been updated and renamed Butler Lumber. The Sears Roebuck vs. Wal-Mart and Quality Furniture Company cases have been dropped.


Although it is not possible to do this precisely, the financial statement analysis discussion is more coherent, we believe, if it is built around Illustration 13-1. The theme is that the financial statement proxy for shareholder value is return on investment, and the ratios help explain why a given return was not satisfactory (if it was not), or at least identify the areas that need investigation.

As with Chapter 8, the amount of attention given to this chapter depends on whether or not the students are taking or will take a course in finance. In such a course, they will, of course, deal considerably more with financial statement analysis than is contained in this introductory treatment. When a finance course is given, we do not assign the chapter, but suggest only that students skim through it.

Students should not get the impression that there is one “best” list of ratios to be memorized. Although the 24 given in Illustration 13-3 could be expanded still further, in practice the analyst will select the ratios most appropriate for a given industry setting.


Genmo Corporation is a “backwards” case in which students deduce the financial statements of General Motors Corporation from the ratios.

Amerbran Company (B) is a case involving straightforward calculation of ratios.

Identify the Industries--1996 is a case showing companies in the different industries can have quite disparate values of their ratios.

Supplement to Identify the Industries is a case showing companies in the different industries can have quite disparate values of their ratios.

Springfield National

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