Financial Analysis of GE (General Electric) Example For Students

Financial Analysis of GE (General Electric) Fiscal Analysis of GE Introduction The three major subdivisions of the analysis are industry analysis, and house analysis. From turbines and TVs, to aircraft leasing and power workss, General Electric is plugged in to concerns that shape the modern universe. The company produces take a deep breath aircraft engines, engines and other transit equipment, contraptions, illuming, electric control equipment, generators and turbines, and medical imagination equipment. GE besides owns mega-financial company GE Capital, which offers commercial finance, commercial aircraft leasing, existent estate, and energy fiscal services. GE s other sections include Aviation, Home A ; Business Solutions, and Transportation. GE sold its contraptions concern to Electrolux in 2014. Economic Climate Economic clime is reviewed in relation to past, nowadays, and likely future conditions. GE is the universe s largest diversified company and operates globally. Therefore, economic clime must be considered in both planetary and domestic contexts. Industry Analysis GE participates in several industries ; hence, each of the industries in which the company participates wherein the activity of the company in that industry represents a significant proportion of entire company end product must be considered. GE is best known to most consumers for the company s line of family contraptions. Among industrial concerns, GE is best known for its aircraft engines and its industrial systems. In existent fact, nevertheless, the strongest part to the company s grosss and net incomes are those of the General Electric Capital Corporation, which contributes 41.5 per centum of entire corporate grosss ( GEC, 2000 ) . GE s subordinates, their parts to corporate grosss, and the primary industries in which they compete are presented in Exhibit 3, which may be found in the Appendix. GE is the largest and most profitable of the pudding stone companies runing in the planetary economic system. The steadfast ranks fifth in the Fortune 500. With regard to grosss, the company generates 68 per centum from the United States, 20 per centum from Europe, and 12 per centum from the remainder of the universe. With regard to net incomes, 76 per centum is generated from operations in the United States, 16 per centum from European operations, and 8 per centum from the remainder of the universe ( Hoover s Inc. , 2015 ) . The investing industry within which GE Capital operates is projected for continued growing, as is the assorted electrical merchandises industry, within which GE Industrial Products A ; Systems competes. Growth in the commercial aircraft production industry, upon which the aerospace ( major diversified ) industry depends, is projected through 2014. GE Aircraft Engines is a major rival in the aerospace ( major diversified ) industry. Growth is projected in each of the industries in which the staying GE subordinates compete. Further, the GE subordinates are either market leaders or major rivals in each of these industries ( Hoover s Inc. , 2015 ; GEC, 2000 ) . Firm Analysis The General Electric Company was established in 1892 as the result of a amalgamation between the Thomas-Houston Company and Edison General Electric Company. Thomas Edison was a member of the company s first board of managers. General Electric has ever been successful and has continually looked for variegation chances. GE was one of the original spouses in the Radio Corporation of America ( RCA ) , the developer of the National Broadcasting Company. GE divested its RCA equity in 1930 as a portion of an antimonopoly colony. GE reacquired NBC lock, stock, and barrel in the mid-1980s through its amalgamation ( acquisition ) of RCA. Throughout the 1990s, GE conducted an active acquisition and variegation scheme ( GEC, 2000 ) . In the early yearss of the 21st century, GE actively pursued the transmutation of its consumer-oriented concerns toward an e-commerce orientation. The company besides is seeking to spread out farther outside of North America ( GEC, 2000 ) . Cheating and Plagiarism May Lead to Expulsion Jour EssayOverall Summary of the Company s Financial Condition GE is a financially strong company. The failing in activity affecting plus bend, nevertheless, is a menace to the continued fiscal strength of the company. Further, the company s debt ratios are likely excessively high to prolong over the long-run and stand for a menace to future liquidness. Appraisal of the Market Price of the Company s Common Stock General Electric common stock closed Friday, 17 March 2014 at $ 139.875. That monetary value was up from $ 131.69 a hebdomad before, but remained good below the October-December 2012 norm market monetary value of $ 159.50. The company s P/E ratio is superior to that for the pudding stones industry. The company s common stock appears to be at about the right market monetary value degree in March 2014. Appendix: Exhibits Exhibit 1 Global Economic Growth: Actual and Projected Beginning: Hoovers Inc, 2014. Exhibit 2 Exhibit 3 GE A ; Subordinates: Revenue Contributions A ; Industries ENTITY REVENUE CONTRIBUTION PRIMARY INDUSTRY GE 100.0 % Pudding stones GE Capital 41.5 % Investing Firms GE Industrial Products A ; Systems 11.2 % Assorted Electrical Merchandises GE Aircraft Engines 10.3 % Aerospace Major Diversified GE Power Systems 8.5 % Turbines, Transformers A ; Other Electrical coevals Equipment GE Plastics 6.6 % Plastics A ; Fibers GE Appliances 5.6 % Appliances GE Technical Products A ; Services 5.3 % Medical Appliances A ; Equipment National Broadcasting Company 5.2 % Television Broadcasting Montgomery Ward Holding Co. 3.6 % Department Stores All Other ( Total of 19 ) 2.2 % Beginning: Hoover s Inc. , 2015. Exhibit 4 Common-Size Income Statement Analysis: GE 2012-2014 Item 2012 2013 2014 Grosss Gross saless of Goods 44.8 43.5 42.8 Gross saless of Servicess 14.0 14.8 14.6 Other Income 2.5.6.7 GECS Services Revenues 38.7 41.1 41.9 Entire Revenues 100.0 100.0 100.0 Costss A ; Expenses Cost of Goods Sold 34.0 31.6 31.0 Cost of Services Sold 10.1 10.4 10.2 Interest amp ; Charges 9.3 9.7 8.9 Insurance Losses 9.1 9.6 8.9 Provision for Losses 1.5 1.6 1.5 Other Costs A ; Expenses 23.5 23.4 24.2 Minority Interest.2.3.3 Entire Costs/Expenses ( 87.7 ) ( 86.6 ) ( 86.0 ) Net incomes Before Taxes 12.3 13.4 14.0 Provision for Taxes ( 3.3 ) ( 4.2 ) ( 4.4 ) Net Net incomes 9.0 9.2 9.6 Exhibit 5 Common-Size Balance Sheet Analysis: GE 2012-2014 Item 2012 2013 2014 Assetss Cash A ; Equivalents 1.1 1.2 2.1 Investing Securities 22.1 22.1 20.2 Current Receivables 2.5 2.3 2.1 Inventories 1.7 1.7 1.7 GECS Receivables 41.2 41.2 41.3 Fixed Assets 9.9 10.0 10.1 Other 21.5 21.5 22.5 Entire Assetss 100.0 100.0 100.0 Liabilities A ; Equity Short-run Liabilitiess 39.8 39.8 39.8 Long-run Liabilitiess 47.8 48.1 48.4 Entire Liabilities 87.6 87.9 88.2 Common Stock.2.2.1 Other Capital 3.4 3.6 3.8 Retained Net incomes 13.8 13.7 13.6 Treasury Stock ( 5.0 ) ( 5.3 ) ( 5.6 ) Entire Liability A ; Equity 100.0 100.0 100.0 Bibliography GENERAL ELECTRIC COMPANY Company Information. ( n.d. ) . Retrieved March 28, 2015, from hypertext transfer protocol: //www.hoovers.com/company-information/cs/company- profile.GENERAL_ELECTRIC_COMPANY.8e594783fd3e6c6e.html