The debt-to-equity ratio suggests how heavily General Motors and Tesla rely on funds provided by creditors. The two companies have the obligation to pay back the amount of financing provided by creditors. If they have high debt-to-equity ratios, which means the heavily reliance on creditors, the two companies will not be able to run successfully under the obligation during a business downturn. The debt-to-equity ratio for General Motor has increased over the past three years, so the risk that GM may not be able to fulfill its obligation is increasing. It’s a bad sign. The reason for the increasing ratio is that total liabilities increase faster than shareholders’ equity does. Meanwhile, the debt-to-equity ratio for Tesla has generally decreased
