StudentShare solutions
Triangle menu

Real World Event Case Study: The Financial Collapse of General Motors - Essay Example

Nobody downloaded yet

Extract of sample
Real World Event Case Study: The Financial Collapse of General Motors

But with the fall of financial industry in 2007, things got worst across all the financial industries in America, including the automobile industry. GM declined in the late 20th century as it failed to adapt to the changing business environment and respond to an increasingly competition from abroad. Gm which has funded approximately $103billion towards employee related obligations proved to be disadvantage for the company. Not only legacy cost but also due to its poor business strategy. It relied on its old mode of thinking which resisted the offering, and manufacturing capacity. The business suffered decline where its market share fell from 45% to 22%. In addition the deteriorating strength of the economy and the loss of purchasing power of its consumers resulted in bankruptcy for GM (Estrada, 2011). In 2009, GM announced that the cash reserves amounted to $14billion after losing $30.9billion in 2008. Thus GM was filed bankrupt and its assets were sold off to the new government owned organization (The New York Times, 2010). It can be said that managerial finance was not applied by GM because if the financial manager would have made proper decisions with respect to cash flows and how much and the type of equity and debt to be used in order to finance the firm. Lack of proper managerial finance leaded GM to a debt of about $172.8billion as compare to it’s assess which was $82.3 at the time of bankruptcy petition (The New York Times, 2010). Question 2 How has this event impacted the economy as a whole? The economic impact with respect to the collapse of the auto industry has resulted to be dramatic. As per a survey conducted by Planning Perspectives Inc, reported that about 68% of the participants revealed that companies would downsize if GM declared bankruptcy, 12% of the respondent said that the business would likely to shut down. It was aid that if GM goes into bankruptcy business across the globe would be affected severely. As per the economic downturn, the American, during the financial crises bought few new cars. The collapse of any of the key players in the auto motive industry had predicted a troubled economy. Almost about one third of the suppliers of the automobile industry were deemed at the risk of bankruptcy (Gray, 2008). The auto industry is an important employer and there are many related industries attached to it. The effect would not result in the collapse of the single company, not just America but all of Europe and Japan also. By the end of 2004, GM has lost nearly $4.2billion and almost $73billion by the end of the year and thus the US government with respect to GM had adopted policies and took actions in order to prevent worst economic scenario. Collapse of GM had cost the US government as much as about $200 million with respect to unemployment cost of reviving the economy and other factors (Ujikane and Yamamura, 2008). Question 3 How does this event tie into the chapters that have been assigned so far? Please give at least three examples. The financial collapse of the giant company, general Motors can be well tied up with the concept of managerial finance. Managerial finance is concerned about the duties of manger in the organization or business. The breakdown of GM was also mainly due to lack of managerial output. GM did not confront the financial problems that the company encountered; the executives did ignore the signals of future financial crises which ultimately led to bankruptcy. It was ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Real World Event Case Study: The Financial Collapse of General Motors Essay”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/67255-real-world-event-case-study-the-financial-collapse
(Real World Event Case Study: The Financial Collapse of General Motors Essay)
https://studentshare.net/finance-accounting/67255-real-world-event-case-study-the-financial-collapse.
“Real World Event Case Study: The Financial Collapse of General Motors Essay”, n.d. https://studentshare.net/finance-accounting/67255-real-world-event-case-study-the-financial-collapse.
  • Cited: 0 times

Summary

Real World Event Case Study: The Financial Collapse of General Motors Table of Contents Question 1 3 Question 2 4 Question 3 5 Question 5 5 Reference 8 Question 1 Please describe your event and how this ties into applied managerial finance? The event that is to be discussed is about the financial collapse of General Motors…
Real World Event Case Study: The Financial Collapse of General Motors
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Real World Event Case Study: The Financial Collapse of General Motors"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Tata Motors case study
This report will exclusively attempt to address whether Tata Nano, a vehicle of Tata Motors had been successful in attracting potential customers and the strategies which were followed to achieve the intended desires. The marketing research is conducted by investigating the problem through exploratory research methods.
12 pages (3000 words) Essay
Reframing Organizations: General Motors Automotive Divison Lordstown Plant Case
As a Consultant to the Lordstown plant, there are a lot of things that I would like to recommend for the management to improve not only the operation and efficiency of the plant, but also on how to effectively exercise leadership so that the present issues that are hounding the Lordstown plant will be minimized if not totally eliminated.
6 pages (1500 words) Essay
Corporate Collapse Case Study Part 2
The most common forms of fraudulent activities include 1) reporting fictitious revenues 2) understating liabilities and expenses 3) improper valuation of assets and liabilities (Klapproth, 2011). On the other hand, the procedure of creative accounting is used to create loopholes in the company’s regulatory system.
8 pages (2000 words) Essay
General motors
Disciplined action, power of ideas and technology driven focus has helped the automaker into one of the greatest name in automobile industry (Newbold, 2002). The headquarters of the company is located in Detroit, Michigan. The company is involved in designing, manufacturing, marketing and distribute vehicle and vehicle parts and selling of financial services.
8 pages (2000 words) Essay
Real chocolate case study
In June 2005 this company was named one of America's 100 fastest-growing small public companies, which indeed tells a lot about its strategic position. The Real Chocolate Company, as the name tells, is a gourmet chocolate selling business. There is a variety of products sold, some packaged while others are made on the site.
11 pages (2750 words) Essay
General Motors
automakers, are having their problems as well. With gasoline prices at an all-time high, auto manufacturers are hard-pressed to curb their losses. Over the past ten years GM has lost almost half its value, and the past year has been especially dismal for the company.
3 pages (750 words) Essay
General Motors (GM) Company - Case Analysis Report
This research essay analyses the company’s background, legal issues and ethical issues faced by General Motors and recommendation to come out of the current financial crisis in detail. I need to request a revision to my paper.  I cannot have any chart or table, because
10 pages (2500 words) Essay
Case Analysis - General Motors and AvtoVaz of Russia (Int'l Stgy)
In 2001, market analysts estimated that “almost the entire market in Russia was for cars priced below $10,000”. However, GM could not market their
5 pages (1250 words) Essay
General motors
The headquarters of the company is located in Detroit, Michigan. The company is involved in designing, manufacturing, marketing and distribute vehicle and vehicle parts and selling of financial
8 pages (2000 words) Essay
General motors
The company has 21,000 dealers working across the world and manufactures and sells cars of different models such as electric and min-cars, heavy-duty trucks, and monocabs and convertibles. General Motors is recognized for innovation and
10 pages (2500 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Real World Event Case Study: The Financial Collapse of General Motors for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us