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(solution) https://www.gm.com/content/dam/gm/en_us/english/Group4/InvestorsPD


 https://www.gm.com/content/dam/gm/en_us/english/Group4/InvestorsPDFDocuments/10-K.pdf

Using the SEC 10-K for your company, answer the following questions:

  1. Reading the notes to the financial statements, as well as the balance sheet, post information about the Accounts Receivable for your company. What are the amounts reported as being owed to the company?  
  2. Search for the phrase "Bad Debts" or Allowance (for uncollectible accounts). When you read the balance sheet, you may see that the receivables are listed as a net of $x,xxx (shows the Allowance for Bad Debts). Comment about the changes in Accounts Receivable and the Allowance for Bad Debts. Are each increasing or decreasing? How does this compare to changes in sales (are sales changing in the same direction as Accounts Receivable)?
  3. Property, Plants, and Equipment / PPE (Capital Assets; Fixed Assets): Comment about PPE and accumulated depreciation: [1] What are the gross and net values of PPE for each of the last 2 years. Briefly describe the changes.  [2] What depreciation methods are used to depreciate PPE? (refer to Note 1 or Note 2 to the financial statements). [3] Compute the Fixed Asset Turnover Ratio for each of the last two years. (Formula: net Revenues / net PPE). Interpret the Fixed Asset Turnover Ratio and compare the changes year-to-year. [4] Reply to the post of a classmate comparing your company's Fixed Asset Turnover ratio to their company's ratio.  Which company is doing better and what are some reasons why?

example

1

2015   11,888M

2014    9,687M 

2013    8,730M

2

In millions

                      Beg Balance     Adds charged to bad debt expense      Write-offs charged to allowance   Ending Balance

2015                 256M                          216M                                          -311M                                      161M

2014                 256M                          185M                                          -185M                                       256M

2013                 243M                           193M                                          -182M                                      256M

the bad debt allowance increased from 2014 to 2015, but had decreased in 2014 versus 2013. The ending balance for 2015 is lower than the previous 2 years but that is due to the company writing off 311M in 2015. This amount is about 68-70% more than the amounts for 2014 and 2013.

the accounts rec account increased for each of the last 3 years, as did sales, gross profit and net income

3           Gross                net               accum dep

2015     21,036M            9,855M          11,181M  

2015     18,786M            8,843M          9,943M

the values of all 3 have increased in 2015 versus 2014.

  2- from page 75 of the sec-10k

Property, equipment and improvements to leased premises are depreciated using the straight-line
method over the estimated useful lives of the assets, or when applicable, the term of the lease, whichever is shorter. Estimated useful lives generally range from 10 to 40 years for buildings, building improvements and leasehold improvements and 3 to 10 years for fixtures, equipment and internally developed software.
    3 - 2015= 153290M/9855M=15.55
         2014= 139367M/8843M=15.76
  the ratio went down for 2015 versus 2014



 


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