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Applying Analytic Techniques to Business
Devan Pouncy
Capella University
Professor: Alex Amegashie
FPX5008
April 27, 2022
General Motors Company
Introduction
General Motors Company is an American multinational corporation that deals with manufacturing automotive products and services. The company's founders included William C. Durant, Fredric L Smith, and Charles Stewart Mott back in 1908. It is headquartered in Detroit, Michigan, United States. The company operates assembly plants, manufacturing plants, and distribution centers across multiple counties, including Canada and many other counties. Based on its latest financial report for 2021, General Motors recorded total revenue of $127 billion, an increase from the previous year's report, where it had $122.48 billion (Yahoo finance, 2022). Some of the company's primary products that drive the company's revenues include trucks, automobiles, engines, and automotive components. Besides, the company offers various other services related to financial services. The company also collects some revenue share from some of its subsidiaries, including Buick, Chevrolet, Cadillac, and GMC. Moreover, through joint ventures, the company owns interests in some Chinese brands such as Baojun, DMAX, and Wuling Motors.
The company has retained its first market position in the United States for most of the twentieth and twenty-first centuries. It became the leader in the United States in 1929 after surpassing Ford Motors in the car manufacturer. The company has been gradually growing in parallel with the American economy since the 1950s and 1960s, when it holds 45 percent of the total country's automotive sales. It has also undergone numerous acquisitions where it bought Data Systems Corporation and Hughes Aircraft Company in 1984 and 1986, respectively (Britannica, 2021). During the first years of operations, the company faced numerous competition from the United States' automotive industry and other foreign countries, including Japanese automakers. To curb the situation, the company started a new automotive division that manufactured subcompact vehicles from highly automated facilities to compete with the imports from Japan. Even after the modernization approach has made success for the company, it also caused substantial losses that led to significant closure of its operations in many regions and reduction of tens of thousands of workforce in those firms. In the middle of the decade, it rapidly recovered from the losses and embarked on its automotive business activities.
In recent days, major companies' focus has been driven by advanced technology and innovation. As the automobile industry embraces new technologies in alignment with conservative environmental measures, the company also works hard to meet environmental needs. One of the innovative approaches the company has been focusing on includes cutting-edge design and electronic innovation. In recent days, the company met up with its strong investors to discuss some of the new strategies it plans to remain relevant in the highly competitive industry. It plans to double its annual revenues and grow its EBIT-adjusted margin by transitioning its operations towards manufacturing all-electronic automotive products. Already, it plans to invest $35 billion in autonomous and all-electric vehicles through 2025 (Global Brands, 2021). Currently, the company holds a market stock price of 37.90. To meet the financial support it requires for most of its expansion and growth projects; the company will need more funds from its investors. The company's stock price is a vital component that will enable the company to attract more investors to its financial assistance.
Graphical Representation of Data
Scatter Plot of the Highest Stock Price
Figure 1.1. Scatter of highest stock price of General Motors following the data from Yahoo Finance (2021).
Based on the graph above, figure 1.1., one can analyze the trends in General Motors' highest stock prices for five years. The chart illustrates the historical performance of the company's stock by examining the relationship of two variables, including the highest stock prices and time on the Y-axis and X-axis, respectively. The values on the Y-axis, the highest stock prices, are dependent variables, while those on the X-axis, the time, are independent. The company's scatterplot did not remain linear throughout the five years like it was in many annual periods. The relationship between the company's highest stock prices did not show consistent positive with the periods from 2016 to 2021. For instance, the highest stock price showed significant outliers between 2016 and 2017. After that, the results from its highest stock prices have shown significant positive in the relationship.
Scatterplot of General Motors Lowest Stock Price
Figure 1.2. Scatter of lowest stock price of General Motors following the data from Yahoo Finance (2021).
The above scatterplot chart represents the lowest stock prices of General Motors from March 2016 to April 2021. The chart illustrates the relationship between the company’s lowest stock price and time. The variables reflecting the lowest stock values on the Y-axis are the variables representing the time on the X-axis. From 2016 to 2018, the graph stipulated a moderately negative relationship between the lowest stock prices and time in the first two years. There were significant outliers of values during the period between the years. However, the graph’s shape changed upwards, indicating the relationship was moderately positive onwards from the end of 2018 to 2020.
Interpreting the Histogram of the company’s adjusted closing stock prices
Figure 1.3. Histogram of adjusted closing stock price of General Motors following the data from Yahoo Finance (2021).
The graph on the histogram chart above shows the adjusted closing stock price of General Motors over five years. It illustrates the relationship between the company’s frequency in its adjusted closing stock price on the Y-axis and the ranges of adjusted closing stock prices on the X-axis over the last past five years of operation. The graph made it evident that the histogram is skewed to the right. More of its data points could fall within the lower annual adjusted closing stock prices range. Moreover, the mean of its adjusted closing prices was greater, 37.23, than the median, which was 35.39. This indicated that the company’s volatility was lower in the market.
Histogram of General Motors’ Stock Volume
Figure 1.4. Histogram of Stock Volume of General Motors following the data from Yahoo Finance (2021).
The above histogram chart showed General Motors’ stock volume data for five years. It illustrated the relationship between the frequency of its stock volume and the ranges of the stock volume over the period. Following the graph’s shape, the histogram was skewed to the left, indicating that the majority of its data points were falling towards the higher ranges, making it negative.
Descriptive Statistics
The mean was used to determine the average for General Motors’ dataset. On the other hand, the median was used to determine the data points corresponding to the middle value in the company’s adjusted closing stock values. Based on the analysis, the company’s adjusted closing stock prices were 37.23, while its median was 35.39. Following the analysis, the mean of the company’s adjusted closing stock price was greater than its median. This indicated the absence of outliers on the stock prices’ lower side. On the other side, the adjusted closing stock price was 9.80 making the company’s stock have a volatility level of 26.32 percent, which indicates a highly volatile stock value. The company’s stock volume was 294797984.7, while the median was 283536450. The mean of the company’s stock volume indicates the high liquidity of its stock for five years. Also, the median was lesser than the mean, which indicated the presence of outliers on the high dataset side, indicating a possible rapid increase in its annual tradable volume of stocks over the period. On the other hand, the standard deviation of the company’s stock volume was 30.98% of the stock volume. This was an alarming indicator of the relatively high volatility of the company’s stock value.
Conclusion
To conclude the analysis, the graphical representations and statistical computation of General Motors presented valuable information to investors and decision-makers. It enabled the investors to determine whether the company was worth being invested in. Also, it enables the company’s decision-makers to identify the areas that need modification to increase its stock value. The analysis stipulates that the company’s stock was currently undervalued. Moreover, the company’s leaders must consider the outliers in its stock prices, which increases the volatility of its value. Compared to the global market, the company’s current price of 38.80 shows that its stocks are undervalued. Other analysts claim that the company’s stock is a hold to buy from the short-term perspective but holds a sell indicator in the long-term perspective (Macroaxis, 2022). Finally, the company should consider investing in partnering with the entity. Many investors did not applaud its stock value, making stock evaluation a wrong approach to attract more investors.
References
Britannica. (2021). General Motors American company. Retrieved from;
https://www.britannica.com/topic/General-Motors-Corporation
Global Brands. (2021). General Motors to Outline Plans for Decade of Growth, Doubling of Annual Revenues by 2030 with Increased Margins. Retrieved from;
Macroaxis. (2022). GM Stock Volatility. Retrieved from;
https://www.macroaxis.com/volatility/GM/General-Motors
Yahoo finance. (2022). General Motors Company (GM). Retrieved from;
https://finance.yahoo.com/quote/GM/history?p=GM
2016 2017 2018 2019 2020 2021 202 2 32.119999 31.15 32.869999 32.090000000000003 32.549999 33.080002 34.979999999999997 37.740001999999997 38.380001 38.099997999999999 38.549999 35.400002000000001 34.650002000000001 35.049999 36.630001 36.740001999999997 40.689999 46.759998000000003 45.349997999999999 43.419998 45.52 43.560001 39.590000000000003 39.669998 42.77 45 40.5 38.32 36.490001999999997 37.049999 38.75 39.610000999999997 39.139999000000003 40.740001999999997 41.5 40.450001 39.200001 38.990001999999997 41 41.900002000000001 39.779998999999997 38.700001 38.95999900000 0003 37.619999 37.380001 35.790000999999997 32.299999 24.99 28.83 31.66 27.33 31.120000999999998 33.330002 38.029998999999997 46.709999000000003 45.450001 56.970001000000003 57.049999 62.240001999999997 63.439999 60.720001000000003 64.300003000000004 59.73 58.599997999999999 54.209999000000003 59.349997999999999 65.180000000000007 63.290000999999997 67.209998999999996 55.549999 46.740001999999997 44.450001
Time
Stock Price in US Dollars
Scatterplot of General Motors Lowest Stock Price
2016 2017 2018 2019 2020 2021 30.17 27.34 27.52 29.82 30.129999000000002 30.879999000000002 30.209999 34.669998 34.840000000000003 34.720001000000003 33.790000999999997 33.369999 31.92 33.049999 34.450001 34.590000000000003 36.619999 40.799999 41.349997999999999 40.700001 41.150002000000001 39.32 34.5 35.229999999999997 35.279998999999997 39.369999 36.259998000 000003 35.209999000000003 33.279998999999997 30.559999000000001 33.849997999999999 31.459999 32.200001 38.009998000000003 36.259998000000003 37.330002 33.150002000000001 33.080002 37.580002 35.580002 36.439999 33.709999000000003 34.590000000000003 34.959999000000003 32.970001000000003 29.33 14.33 17.790001 20.120000999999998 24.25 23.33 24.82 28.24 29.15 34.229999999999997 40.060001 40.040000999999997 49.349997999999999 50.25 54.709999000000003 53.52 58.41 52.630001 47.07 47.799999 52.25 54.419998 53.139999000000003 49.240001999999997 43.91 39.75 37.599997999999999
Histogram
Count
< = 43 < = 48 < = 53 < = 58 < = 63 < = 68 < = 73 < = 78 < = 83 < = 88 > 88 14 21 50 81 78 10 0 0 0 0 0
Closing price
Frequency
Histogram
Count
< = 8400000 < = 8900000 < = 9400000 < = 9900000 < = 10400000 < = 10900000 < = 11400000 < = 11900000 < = 12400000 < = 12900000 > 12900000 1 1 4 3 5 8 8 11 12 8 11
Volume
Frequency
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