3 ms·
> GM is very healthy and profitable This seems to be the Crux of the issue. A quick look at the financial statements shows positive net income (though not cons
by xibalba 7y ago
> GM is very healthy and profitable
This seems to be the Crux of the issue. A quick look at the financial statements shows positive net income (though not consistently). The statement of cashflows, which is where companies go bankrupt or not, seems much less positive a story.
My accounting training is limited. Any HN'ers with accounting/finance background care to comment?
- mrfredward 7y agoI'm no accountant, but I think the bulk of the issues is that profits never last in the auto industry. GM trades at a price to earnings of 1/4 of what the market as a whole gets, because investors expect earnings to be negative as soon as a recession hits. GM has cash on hand of 3X its current profits to weather this storm.