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General Motors Corporation Final Exam question for MBA program




Question;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.;Volkswagen and GM;(questions 1-7);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?;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?;Compute;the following ratios for both companies in 2003. What are some possible reasons for the;differences in ratios?;Which of the statements do you prefer? Why? Which of the statements is more;transparent?;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?;If you were a bank, to whom would you rather lend money? Why?;If you were an equity investor, in whom would you rather invest?;Why?


Paper#41989 | Written in 18-Jul-2015

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