Why General Motors And Fiat Chrysler Combining Isn't Farfetched - Seeking Alpha
For the past few months, chatter about a potential combination of the American auto-giant, General Motors (NYSE: GM ), and Fiat Chrysler (NYSE: FCAU ) had slammed to a halt. Since the beginning of the year, Sergio Marchionne, CEO of FCAU, had been entreating GM's management and major shareholders in an attempt to gain concession in a consolidation that he sees as not only positive, but inevitable. The following tables are to create a visual way of matching both entities side-by-side and keying in on company specific strengths and weaknesses. Looking at the leveraging of the two companies will illustrate the important borrowing hurdles and financial obligations the auto companies have, while at the same time providing a quantitative look at liabilities' relations to their respective... First off, and most importantly, both companies have sufficient assets to manage total and current liabilities. The companies both have higher debt than equity levels and have manageable debt as a percentage of total assets. While FCAU has adequate assets to cover liabilities, those assets are not mostly in cash and cash equivalent form. In fact, the company sports the title as the most highly leveraged in terms of debt to working capital. Source: seekingalpha.com
